PE Money Is Coming for STR. The New StayTerra CEO Explains the Strategy.

0:24Good morning.

0:26Michael Goldin: Happy Monday. We're back. and without Jamie today.

0:31Brandreth Canaley: I know.

0:32Michael Goldin: Had a last minute flight pop up. So.

0:35Brandreth Canaley: I know. Jamie's missed. Yeah. Now we just get to throw out wild numbers and have no one fact check us on air.

0:42Michael Goldin: It's how Jamie got on the show to begin with. Yeah.

0:46Brandreth Canaley: Just being like your numbers are all wrong.

0:48Michael Goldin: Yeah. We got Jamie live commented that some numbers I threw out were directionally incorrect. correct um so we invited him on the show to correct him but brandy how's the weekend you're

1:02Brandreth Canaley: you're back you're not in the cabin anymore i'm not i'm back in boston um it's been so nice being back here the weather has been so so but it was like i walked into my apartment and i was like wow i haven't been here in like almost six weeks five weeks and it felt really nice to be home

1:21Michael Goldin: that's insane like yeah and you're paying rent that whole time too

1:26Brandreth Canaley: don't i don't need to be reminded of how much i pay in rent

1:32Michael Goldin: well how was your weekend you're back you dusted stuff off nothing crazy

1:36Brandreth Canaley: nothing crazy um which is great my plants are still alive i had someone come and deal with that so um now it's just back getting into routine going back to the gym that i've also been paying for that since I've gone. So, um, yeah, a little bit more like sleeping, you know, just kind of getting back into a routine, which feels nice.

1:57Michael Goldin: Fair enough. Yeah. Uh, for us, it's the calm before the storm. It was the last weekend that both Kristen and I will be in town together without company for the next two, at least two months, two months. Yeah. Every weekend. So it's Oh, that's a real brandy move.

2:21Well, I guess.

2:22Michael Goldin: I guess. I mean, it's all work. This isn't play. We have one play trip, two play trips in there. But the rest, Guest Eval coming up.

2:32Brandreth Canaley: We've got Burma.

2:34Michael Goldin: My wife has some horse shows to go to. And then Friends coming to town because it's football season. and football season is fun in Auburn, Alabama, except we've sucked for the past decade, feels like.

2:51Brandreth Canaley: Yeah, you know, the SEC football world is just so foreign to me. We'll get you down eventually. Yeah, listen, I'll always go to live games. I'm going to a Red Sox game next weekend, which I'm pretty excited about, even though I know zero about baseball. But it's all about the vibe, you know?

3:07Michael Goldin: It's okay. It's okay. Awesome. Well, we've got a good show today. We've got a guest coming on. We do. You're getting to know quite well, which is great. We'll also cover Airbnb and TripAdvisor's connection. And then we'll discuss a little bit of the layoffs that have happened over at Expedia and how they're shifting more and more, doubling down on B2B and AI.

3:34Brandreth Canaley: Yeah, something we've been kind of calling out for a little while. But yeah, so it's not every day that you get to have your boss on the show. But I'm very excited. If you've been on LinkedIn in the last week, you saw that we have a new CEO, Amy Katari. So without further ado, please welcome Amy to the show.

3:56Hi.

3:57Brandreth Canaley: Hello, Amy. Welcome. Hello, Brandy.

4:01Michael Goldin: And for those who have been tuning in the past three weeks in a row, Brandy and I have color coordinated somehow. And I got the memo. And Amy got the memo. We're all wearing light blue today. Last week, it was all black, I think. Yeah. Something's in the water, I guess. But Amy, welcome to the show and welcome to the industry. This is kind of your first soiree in the space. But if you will give a little background on where you're coming from and both physically and background wise. Sure, sure. Well, it's not completely foreign to me. I've always been in and around kind of real estate and property management in my personal life.

4:45I'm actually sitting right now in the house that I rent out for a good portion of the year, leaving revenue on the table because I don't rent it out in August because I like to be here. But everyone always says to me, well, who manages it? And I manage it myself. And it's a 130-year-old house up in West Hampton Beach in Long Island. And it has had its share of challenges. When I recently visited one of our companies in Colorado, we got to share amazing stories on like, and they looked at me, they're like, wow, you actually really get this. I'm like, oh, yeah, no, I had my very first renters had a septic system that blew up back into my house.

5:24So yeah, so I managed all of that. But I came out of the residential home security industry. I ran a company in that industry and sold it to private equity multiple times. So, you know, really have a strong background in working with and through private equity sponsors. You know, we were providing home security, monitored home security, running service trucks, and, you know, had, you know, the end users were the homeowners. So, you know, not dissimilar. And then more recently, I sit on the board of a number of resi service businesses, all private equity backed. But then most notably, most recently was the CEO role of the restoration remediation business.

6:08And interestingly enough, most of our referral sources were property managers. So when there's a flood or there's a fire or something else happens, we were the first one they called. So I've kind of been around the hoop on it a little bit. And when I heard about this, I thought, my God, after all these years I've been in businesses providing a service that was when tragedy hit, you know, burglaries, you know, floods, fires, to be in a business now where my end game is for people to have the most amazing, luxurious vacations ever. This felt right.

6:43Brandreth Canaley: Yeah, it's a nice change of pace. People are like excited about this product and not calling it a panic.

6:50Michael Goldin: And I can tell you've been in it or understand it enough because you didn't say I Airbnb my house. You rented out to short-term renters. Yes. I have always prided myself that I am able to convert to direct.

7:05Brandreth Canaley: Wow. Okay. Yeah. See, I mean, that's huge. I was just explaining to someone this weekend, like, they're like, oh, so you work in like Airbnbs? And I was like, no. And there's always like this deep breath before you try to like not like forcibly reeducate people.

7:21Michael Goldin: They're not a competitor. Apparently they were at Romy when that press release came out. brandy oh my gosh yeah yeah um so amy you're a couple weeks in what what do you notice about this space what excites you about it as well besides let's say aside from delivering great experiences to guests that's that's right yeah no of course that's table stakes right but what do you see in the space industry-wide well i think first at the satara level i think what's exciting to me is what feels like look i haven't gotten to know the entire industry yet but what feels different for what state terror does is what we don't do and we don't go and we don't buy a great local company and slap our brand on it um and that's that's very close to my heart because the home security company i bought we kept all the brands of all the companies we bought and actually in the early days we answered the phone and the names of all the different alarm companies because we recognize the importance of that brand equity and that every brand here keeps their name, they keep their team, they keep their reputation in their market and realizing that brand and local relationships, those are the assets.

8:38And I think State Terra has honed in on that as their playbook. And I think that was probably the most interesting opportunity for me is working with local brands.

8:50Michael Goldin: Yeah. Yeah. We've seen a couple entities prior to this PE cycle, try to roll things up, whether it's Vacasa or Wyndham or ResortQuest. It's just really tough to get enough density to build a national brand in short term metals. That's right. That's right. And I think the real opportunity, right, is that then people say, well, what do you do? Are you just going to create a collection of companies, and that's the furthest thing from the truth, we're going to help layer in all the stuff that's hard for a single operator to do on their own. So a real data infrastructure, a shared CRM, so they can cross collaborate, cross market things, revenue management, direct booking engines, real practical AI and technology.

9:40And if you think about it, if you go back 10 years ago, yeah, probably like 10 years ago, if you think about it, an operator could run a great 200 home business just with hustle and relationships. And today, that's very different. If you think about the cost value that you have that you're dealing with in terms of technology, data, marketing, revenue management, and you're up against competitors who are spending gobs of money in those areas, that gap's getting bigger and bigger. So kind of let us help you take care of that depth of there. Yeah.

10:19Michael Goldin: As a founder, you lean into your strengths and some people are extremely tech savvy and can piece together the whole back end and make it fly. Others are great salespeople and they can just sign up homeowners left and right, but maybe not deliver all of the revenue that a homeowner might want. But it makes a ton of sense. And I think this is why we've seen a lot of PE groups in this cycle jump in and keep local brands and figure out where they can optimize. Have you been in long enough to know kind of where the secret sauce of State Terra lands versus some of the other private equity roll ups?

11:01Yeah. So one of the things I've talked about quite often is when you get to, you know, value creation, there's two things that create value in roll-ups of this sort. One is the integration. And it has to be true integration where it's valuable at the tech, at the marketing, you know, at the accounting, finance, and be able to take the pressure off the brands. And number two is organic growth. So I think one of our biggest, biggest roles in this and the secret sauce is how do we help these brands grow? So being able to show organic growth and being able to show a truly integrated business that all the brands that come under State Terra have kind of the State Terra gold stamp of approval in terms of how they operate.

11:45But yet they are still very independent, independent and autonomous in how they operate in their market. And I think recognizing that you can't cut your way to a successful platform and recognizing that number one above everything else, above technology, marketing, business development, is taking care of your people and maintaining your operators and maintaining your teams. Because if you don't, six months later, when you start to lose owners and you're like, what happened? The model's broken. Well, it's because you lost your secret sauce, which is the people. Yeah.

12:20Michael Goldin: Churn. And the last thing I would say is that M &A acquisitions, you know, we're all backed by private equity and sponsors. Everyone likes to move fast. And M &A has to be earned. And the gating earned to do that has to be integration. Like you really need to pace your deals based on your capacity, which is based on your integration. And doing it smoothly and effectively and making sure everyone's happy.

12:50Brandreth Canaley: Yeah, that's been, you know, the work of the last couple of months is kind of getting the structure and framework ready for integration to make sure that when we do make these acquisitions, that the process is as smooth as possible. And I think one of the interesting things when I first started, I was talking with Dan, who's running a lot of our M &A processes. And there's this, there is kind of a negative connotation in the industry about like these key groups, like the suits from New York or whatever. and but I think there's some really great examples we were talking pre-show about our Cape and Coast and when they were asked like what do you need right now to like that if you could snap your fingers you need something that's like a that would make you successful for the season and they needed some new laundry facilities and new parts for their laundry facility and it's like okay like let's get that done and that's one of I think the benefits of working you know being in a group like ours is these big capital projects, whether it's a CRM or AI or laundry facilities, things that might have to get delayed because of cash flow.

13:51Brandreth Canaley: We can now come in, fill that gap, and let the operators really do what they do best, which is providing that great guest experience. Well, the other one that resonated with me on that same conversation was when I first started talking to the team at GSP, I heard the story about when we bought Prime Vacations, we got hit with two hurricanes right after that. Yeah, B2B hurricanes. Yeah, and wiped out a lot of the inventory and that the entire team at Garnet Station Partners, the private equity firm behind Save Terra, were on a plane. They were down there. Board members were down there. They were walking the properties.

14:29They were talking to owners. And they said, whatever you need. And we survived it. And I actually think we thrived because of it. And that's a real difference here is that particularly the sponsor we have behind us at State Terra, they're hands on and they actually are operators. Yeah, exactly.

14:50Michael Goldin: That's huge. And to be also diversified out of single market exposure. You know, Colorado didn't have a great ski season this year. Florida can get hit by a hurricane. So being able to diversify cash flow helps significantly doing it across an umbrella of companies. Amy, five years from now, what is a success for State Terra? Is it amassing a number of logos, a specific property count goal, organic growth metrics? Is there one kind of guiding KPI for you guys? Yeah, I think that's such a good question. Look, we want to build density in all the markets that we're in. We want to create liquidity and equity value in something larger than what all the brands have before we partner with them.

15:46But really, it's not just about adding 5 ,000 to 7 ,000 homes. Home count is not, I don't think, the only measure of success. I want to see, you know, 90 plus percent retention rates with homeowners. We want to see, you know, an 80 plus NPS score across our businesses. We want to see growing same home revenue year over year. And then I think the ultimate is that we have brands that teams want to work with. And people want to be part of their company. If you hit those things, then scale happens. If you chase scale first, then churn happens. So I think really being able to kind of just lean into those core metrics that speak to quality and customer satisfaction.

16:40If you really go after those, then we'll have the scale that we're looking for.

16:45Brandreth Canaley: Yeah. And then those partners, those companies that we acquire will fall in line with kind of like this vision that we have set out. it'll kind of fall together organically, which I think is really great. And talk about putting like a flag in 50 states. Like we want to really identify markets that we think make sense and really build out those markets. And I think there's a lot of density to have in each of these markets that have been gated by the fact that the operators couldn't take on the economics involved to go get the things necessary to support that kind of expansion. But now we can bring that to the table.

17:20Michael Goldin: yep beautiful well amy we like to end with a quick rapid fire of all of our guests uh didn't prep you for this pre-show but i'll ask a couple questions brandy will as well and then uh we'll thank you for joining us great so favorite vacation destination i'm here your house I am at as my people who know me call this my happy place I've been in this place for my entire life and if I can travel to Europe or anywhere else this is where I like to be okay well that answers the ski or beach question sounds like yeah I know

18:03Brandreth Canaley: that's yeah beach I like ski places actually in like the spring and the fall because I think it's beautiful you know hiking in those areas I had a business in Sun Valley Idaho and I loved going there just because of the hiking and being in the mountains.

18:19Michael Goldin: Okay. Number one place that you want to go that you haven't been to?

18:24Brandreth Canaley: That was my question. Oh, goodness. No, that is rapid fire that I haven't thought of. You know where I haven't been to is I'm Polish and my great grandmother that came through Ellis Island and came here to West Hampton Beach and set the roots. I haven't been to Poland.

18:43Michael Goldin: Poland is awesome. I've spent some time there. I've been all around it, but I haven't gotten there yet. All right.

18:52Brandreth Canaley: I was going to say one more. Favorite cuisine, not necessarily to cook, but to consume. Italian. Yeah.

19:00Michael Goldin: Good choice. All right. Brandy's going to have to cook a team dinner. Have you heard about her capabilities? I have not heard about our capabilities, but maybe when we get to, you know, we have some exciting stuff on the line here at the company. And we'll have some big announcements over the coming, I'd say, 30 to 45 days, Brandy. Yeah. Combination of exciting things. So maybe we'll have to have a celebratory dinner and you're cooking. Oh, my. Oh, my gosh. Sorry, Brandy. Really.

19:32Brandreth Canaley: Yeah. High stakes. You know, one of my New Year's goals was to do, I used to do these dinners every month for the over a span of a couple of years. And now I'm trying to do at least one or two like big blowout dinners every year. So maybe my 2026 one will be a state era celebratory dinner. So I'll start thinking about some ideas. Well, I can give you a little known fact on the cooking front for me is my last name, Qatari, is Indian. My husband is Indian. He can't cook Indian food to save his life. But I started cooking 35 years ago and I cook a lot of Indian food at request often. So my friends and family.

20:16So maybe a collab. All right.

20:18Brandreth Canaley: Yeah, I love Indian food. That sounds awesome. Yeah. Well, thank you so much for coming on the show. This is great. I'm, you know, it feels so like just personally so exciting to be a part of this team and kind of knowing what we have coming towards the end of the year, especially as we go into conference season and we get to kind of be out and about in our circles. And it feels just so great to be so excited to talk about all the things that we have on the horizon. Oh, I'm so excited. And thank you both so much for having me here. Very last minute, but I appreciate it. Of course.

20:50Michael Goldin: Glad to have you. Good to meet you. OK, take care. You too. Bye.

20:55Brandreth Canaley: All righty. Well, before we dive into our next topic, I want to give a shout out to our sponsors at Built. They're helping restaurants and hotel F &B teams better understand their guests and create more personalized experiences that drive repeat visits. So if you care about loyalty and guest experience, they're definitely worth checking out. Head to joinbuilt.com slash gmh or find that link in our show notes. All right, Brandy.

21:19Michael Goldin: So it seems like every week Airbnb launches a new category that makes them more and more an OTA. So there's absolutely no denying it now. The car trawler integration, turning that on the hotel side, they still don't have flights, but they now have access to TripAdvisor and all of the experiences through them. So thoughts, comments, concerns?

21:50Brandreth Canaley: Yeah. I mean, this doesn't really surprise me a lot. I mean, versus like trying to Matt, like they've been working in experiences for so long. And TripAdvisor, even though their brand has obviously suffered and like the company has suffered in the last couple of years, they do have this incredible network. And so if you're going to try to really boost the experiences, like by a meaningful way, this kind of partnership makes a lot of sense. And I think that we don't, Airbnb doesn't need to try to pretend anymore that everything is like grassroots organic. Like they're a publicly traded company, you know?

22:27Brandreth Canaley: And I think I'm trying to get my new merch, that sweet, sweet Tam. I think you need to, you have to have some power players, you know?

22:37Michael Goldin: Yeah, I would love to be a fly on the wall in their board meetings where you've got the legacy people saying, this is so far from our brand. This is nothing true to our core, where the experiences were led by individuals doing one-of-a-kind type of experiences.

22:56Brandreth Canaley: And those are still happening, you know?

22:58Michael Goldin: Well, and same on the short-term rental side. It's, you know, a single mom renting out a spare bedroom to cover rent, right? That's kind of core to their thesis. But now you've got TripAdvisor and hotels and all that, and it changes. I'm sure the branding folks at Airbnb have fought the good fight, but obviously in this new era of AI distribution and what I'm certain Airbnb has in the works on that front, it's all about access to as much inventory as absolutely possible. and they seem to be going full-blown OTAs. So when's the airline release coming out?

23:42Brandreth Canaley: I know. It's just the last bit. And I mean, having talked about this for so long, you learn that that's actually one of the least profitable parts of an OTA. However, it is an essential part of the trip for most people. I mean, unless it's a drive-to, you're flying. That's the first thing I'd like.

24:01Michael Goldin: Yeah.

24:02Brandreth Canaley: Yeah. Yeah. And I was also thinking, I mean, especially for Europe and places that have much better train systems than we do, but like having access to like book with Amtrak or Brightline or, you know, whatever, that's like just all these, the fully, as we have the fully integrated trip, like it's, they're going to have to get that transportation part in there at some point. And it's not cars because like that's, you know.

24:27Michael Goldin: Agreed. Yeah. But to your point, it's, it's the margins. There's lots of margins on experiences and on hospitality. They've got what, 15.5%. It's a hefty chunk. Cool. Any more thoughts on this? I'm sure Jamie will have some comments.

24:47Brandreth Canaley: I think it makes a lot of sense. Sometimes there's Airbnb releases where I feel like, wow, that's really great or wow, I really hate that. And this, I feel like it makes sense. and it's still if you want that local feel like the thing you know if they have their vatican tours like you're not getting some local italian man taking you through the vatican that's like a ticket you have to purchase through like an official site you know there's that kind of stuff where like if you want to do a local pasta making class in rome while you're there or a local food tour like you'll still be able to find that you know so it's i don't think it's it totally destroys kind of I've done the Airbnb experiences and that I really likes it have been those little tours and it's great it's fine you know you can still find them how long lived is a relationship like this so they built their own supply well that could be an option but they built their own supply

25:44Michael Goldin: in short term metals they built some of their own experiences they're building their own hotel supply experiences they could go out and build more you know the vatican or any other major tourist attraction they can go sign up directly so over time i would imagine this trip advisor relationship to continuously lose value but they're just getting a list of people to partner with

26:12Brandreth Canaley: like that's you know it's just like that would be my who sells the most yeah exactly what are people actually buying that's you know that's the focus so yeah i mean who know i i also i think one of the only things that i mean it doesn't make me like really nervous but like that i think is just it seems like airbnb is really doing a lot of big initiatives all at once without some of these really coming fully to fruition and so are they is there the focus on like what the core strategy should be um that will be my only concern amy talked about integration into the company and

26:52Michael Goldin: integrating this many this much new supply and this many new verticals for airbnb um it'll be interesting to to see how it plays out obviously they have known these are coming for years and i'm sure they've uh got a plan for it but it does seem from uh the outside looking in like it's taking on a lot at one time. Yeah. Well, in the opposite direction, Expedia was cutting some

27:20Brandreth Canaley: things, namely eight expensive executives as they're reorganizing around AI and their B2B platform. What are your thoughts on this? Is this just a HR headline, nothing to be concerned about? Is this leading into something bigger?

27:37Michael Goldin: Well, AI is supposed to take workers' jobs, not executives jobs. But in this case, I think it's probably a headline of just a little bit of

27:46Brandreth Canaley: corporate restructuring.

27:48Michael Goldin: We know their B2B line keeps growing and growing, and they're probably looking to reinvest more into that segment than potentially any of the legacy ones. But they're also able to put out, and everyone is able to put out in hours and days, what used to take weeks and months from a tech and a code standpoint. So fewer people are needed when, when you have that, that sort of output and throughput. So I don't know, I don't think there's a whole lot to this story besides just a corporate restructuring. Yeah.

28:25Brandreth Canaley: It's not, it's not like Expedia is going out of business next week, you know? Yeah.

28:31Michael Goldin: They didn't shut down the B2B business or nothing too crazy. But if anyone has news and wants to, uh, to tell us more about it, then we'd love to dive in.

28:43Brandreth Canaley: Yeah, absolutely. And before we wrap, I, you know, we were talking with Amy about our brands that are doing such a great job. And I just wanted to give a shout out, a little plug to the prime team. They did this incredible show, um, on staycation, which it's done officially on like the Roku channel, but you can also look at it on YouTube. And it's basically like vacation rental cribs. And I was watching the episodes and just seeing these like just incredible houses. And especially because I'm up in Boston, I'm like this little island by myself. It's so great to see like what people are doing on a daily basis and like just these insane houses and like the product that people give these guests.

29:25Brandreth Canaley: And just knowing that this industry, like we talk a lot about some of the harder parts of the industry, but then you get to see kind of the fruits of that. So just shout out to the team for really delivering some outstanding experiences for those people. And I'll have like the links. I'll put them on my LinkedIn if anyone wants to watch some vacation rental cribs, basically.

29:45Michael Goldin: Do it. Do it. Awesome. Big week. Anything crazy?

29:50Brandreth Canaley: No, I have like a week. I'm just really enjoying being home. Obviously a lot of like work going on. But the only really fun thing I have planned is, so I don't, I didn't know this until I moved back to Boston, but Donna Summer is from Boston. And on Friday, there is a day where the city like hosts a like disco, like all ages disco party at city hall. And I'm going with my friend and his mom, which I'm really excited about.

30:16Michael Goldin: All right. Bring back the seventies.

30:18Brandreth Canaley: I love it. You know, I am big disco girl, so I love that.

30:22Michael Goldin: I did. I did not. I knew you were a a big, uh, EDM girl, but I did not know disco as part of that.

30:29Brandreth Canaley: Big disco. Oh yeah. How about you? What's on the docket this week?

30:33Michael Goldin: Um, yeah, same old, same old over here. No, no travels, but we are getting closer and closer to the conference season. I know.

30:44Brandreth Canaley: I, I, I was looking at the calendar and I was like, Oh wow. I'm excited to be home for a little bit. And then I was like, or the middle of September, I'm just not here at all. I mean, guest of all is going to be so much fun. And then we have a skiff global forum, which I am. You're not joining us for that, but I, I'm beat. It basically like come back from Madrid, turn around, take the train down to New York.

31:07Michael Goldin: Nice. Well, it'll be a, both will be great events. We're three weeks out from a guest of all and four weeks from skiff. So there will be, I'm sure lots of fun news and topics to discover. But anyway, yeah, well, that's the new boss.

31:27Brandreth Canaley: Yeah, she's pretty great. I'm really excited. It's it's it it feels like invigorating like this point in the year. There's just like a lot of really fun stuff happening. So I can't wait to announce some of the really fun stuff we have. I can't wait to hear what they are.

31:41Michael Goldin: We better be breaking it on the show, Brandy. I know.

31:45Brandreth Canaley: I have to be like, hey, listen, I need the breaking news.

31:49Michael Goldin: We go first, everybody.

31:51Brandreth Canaley: We go first. All right. Well, thanks for everyone turning in live, everyone listening later on, and we will see you all next week.

32:24Thank you.