Winning direct bookings from China; busting the myths and giving practical takeaways with expert guests Sam Rason and Gabriel Nicklin

China is one of the most misunderstood markets for student housing, BTR,  universities and the wider rental living sectors - we wanted to bust some of the myths surrounding this market and, in true Housed style, dig deeper and get some practical takeaways to share with the sector.

We learnt so much from this conversation with Sam Rason, CEO of VIVA - Mini Programs and Gabriel Nicklin, Managing Partner of TONG Global and are pretty sure our listeners will feel the same.

This episode covers:
- Why China is different?
- WeChat, platforms and direct engagement
- Marketplaces and the 'convenience trap'
- Diversifying your marketing mix
- How to practically build a direct China strategy
- What the future looks like for this sector

A big thanks to Sam and Gabriel for joining us, we felt that we only just scratched the surface of this topic - if you do have any further questions please get in touch with Sam or Gabriel directly.

And if there any other hot topics you would like us to cover on Housed - please do get in touch.

Stay up to date on Housed podcast via its LinkedIn page.

Dan Smith is Founder of RESI Consultancy and Co-Founder of Verbaflo.AI.

Sarah Canning and Deenie Lee are Directors and Co-Founders of The Property Marketing Strategists - Elevating Marketing in Property.

Thank you to our season four sponsors:
Mystudenthalls.com -  Reach thousands of students searching every month with 0% commission student accommodation listings.

Utopi - The smart building platform helping real estate owners protect the value of their assets.

Washstation - Leading provider of laundry solutions for Communal and Campus living throughout the UK and Ireland.

Howden  - With a lifetime of expertise, Howden provides tailored insurance, property risk management, and wellbeing solutions for accommodation providers across the UK.

Who this episode is for:

• PBSA and student accommodation professionals
• BTR, co-living and rental operators
• Property developers and investors
• University and higher education leaders
• Anyone working in or around housing policy and shared living

The views and opinions expressed in this podcast are those of the hosts and guests alone and do not necessarily reflect the views of their employers, organisations, clients, or partners. This podcast is for general discussion and informational purposes only. Nothing said should be taken as professional, legal, financial, or investment advice. While we aim to be accurate, we make no guarantees and accept no liability for decisions made based on the content of this podcast. This was a jointly sponsored podcast. 

Transcript

Setting The Stage: China Focus

SPEAKER_04 0:00

Hello everyone and welcome back to a very special episode of How's the Shared Living podcast. Over the next few months, we'll be bringing you the latest news, views, and insummits from across the rented and shared living sectors. So if you work on PBSMA, BTMA, Co-Living, University Accommodation, HMA is all the rented living sector that you are in the right place. Today's episode is a little bit different, a little bit special. This is all about the Chinese market. We need to increase International Sectors and Lee with the China market. China remains one of the most important and complex international markets. Student housing ETM universities and the market sectors, but it's also one of the most misunderstood. So we're going to try and some of those interests today, and I'm here from some of these lecture experts. More on that in a minute. But in the meantime, I'm Sam McCumling from the Property Marketing Strategists. I'm Dan Smith from Resi Consultancy and Verberflow AI.

SPEAKER_03 0:57

And I'm Danny Lee from the property marketing strategists.

Guests And Roles Introduced

SPEAKER_04 1:00

So our very special guests today are Sam Raisin, CEO of Viva City. They specialise in WeChat mini programmes and data-driven engagement, helping operators and institutions connect directly with Chinese audiences. And we also have Gabriel Nicklin from Tom Global, a marketing agency specialising in China supporting real estate operators, universities, and brands to cut through the noise and build meaningful direct engagement in the Chinese market. But you can probably hear more from them directly. So, Sam, do you want to just tell us a little bit about Viva and what you do with the China market yourself?

WeChat Mini Programs Explained

SPEAKER_01 1:35

Yeah, well, thanks for having us. This is very exciting. So, Viva, we've been in the space, well, we started life in 2015. It's been a long 10, 11 years, but around students at least since 2020, our business was established to help companies better connect with their Chinese audience. Over the last five, six years, we've ended up specializing in WeChat mini program development. I know some of you are very familiar with mini programmes, some of you might not be, but essentially inside China, consumers don't interact with brands necessarily through websites like we do in the UK. They like to engage brands through platforms that they use every day. And WeChat is one of the most prominent platforms in China. So the Mini program essentially gives companies a brand interface in WeChat. So from a student housing perspective, we're able to build an app that functions a bit like a lightweight website and it allows your prospective Chinese audience or your existing Chinese tenants to engage with your brand, read information, make inquiries, make bookings, talk to sales teams, a very comprehensive tool. We work with probably around 60 operators, predominantly in the UK, but also in Australia, the US, and some parts of Europe now. So we do have some interesting stories to tell, and which hopefully we can get into today.

SPEAKER_04 2:48

Fantastic. Thanks very much, Sam. And Gabe, do you want to fill us in on what Tong does? And then I think what I'd really like to cover is kind of how you guys work together, because we know because we've worked with you guys for many years in various different ways that you're not actually competitors. But I think some of the sector will kind of think, oh my god, they're on a podcast together. How does this work? So, Gabe, over to you.

The Funnel: From Awareness To Conversion

SPEAKER_00 3:11

Yeah, absolutely. Thanks so much, Sarah. I think a lot of people might hear, you know, two UK-China businesses, they must be working in competition, but it's definitely not the case. As you say, my name's Gabriel or Gabe. I've been with Tong for about six or seven years now. We as an agency been going for almost 12 years now, similar to Sam. The founding of the company was really based around the idea that as digital marketing solutions became more and more complex in the UK and the US, based around predominantly American digital marketing platforms such as Meta and Alphabet and things like that. The same wasn't really happening for Chinese digital marketing platforms, which are so unique to the Chinese market behind the Chinese firewall. So we built a niche quite early on in the rented living sector, something that we've only continued to develop over the past decade. I've been there, as I say, for about six years, mostly in the client services area, but now as managing partner of the business. And in terms of how we work together with Viva City, the main thing that we do is a sort of full-service digital marketing solution in terms of building brands for clients, working with existing students as well as acquiring new students and inquiries through key social media platforms, because that is how Chinese students engage with brands and do their research in order to make big decisions like moving to the UK to study and deciding where to study. So, in that way, we're more of the customer acquisition funnel, and then we put those Chinese students onto WeChat Mini programs that Sam may produce so that they can inquire and convert and engage more richly with the brand. Is that kind of a fair summary, Sam?

SPEAKER_01 4:42

Very good. Yeah, I mean, the easiest way I try to frame it is as a funnel, you've got top of funnel activities, which is what Tong does, driving that traffic to the middle layer, which is the mini program. You know, the mini program itself can be discovered on WeChat and accessible from places. So there's a little bit of top-of-the-funnel stuff. But its main focus is about taking that traffic and creating an outcome. You know, hopefully the outcome is an inquiry or a booking or an engagement with the customer service team or sales team to support the student. And then you've got the bottom of the funnel, which is the conversion layer, which is a very interesting talking point.

SPEAKER_00 5:19

And part of our job together is to try and explain where are the nuances and where are the differences between the Chinese digital environment and the so-called Western digital environment. So there aren't always light-for-like comparisons. It's not easy for us to say a mini program is the same as an app, or you know, a little red book or Red Note is the same as Instagram. These aren't easy comparisons. So what we try and do is to teach our clients and other people in the sector about how students and parents use the digital ecosystem in China to make decisions and how we can influence them towards our brands.

Why China Matters For PBSA

SPEAKER_04 5:49

But that's exactly why we need experts like you, because we can't access them, we can't see them, and most of you know the Western marketing teams don't understand them. So we're really fortunate to have you both with us today to impart your knowledge. I guess a really good starting point would be why are we talking about the Chinese market on a real estate podcast? Why why is the Chinese market so significant and why should our audience care?

SPEAKER_00 6:13

Yeah, I mean, simply put, just to kick off, it's because of their importance to the sector. We we know that there are approximately 150,000 uh uh Chinese students studying at the UK at the moment. They tend to prefer higher quality accommodation, usually in the PBSA or the BTR or the co-living sector. And we know that because the average rent, as shown through STURENS paid by Chinese students, is usually about£224 a week, as compared to£158 by UK and a lot of international, uh other internationals such as Indian students. So there's a real price premium as well as the quantity of Chinese students that come to the UK for study. And that's why they're so important to the UK and across Europe as well.

SPEAKER_04 6:53

And I guess there's an element of the managed product that that seems to be appealing to Chinese students. And I guess that's just because otherwise renting on the wider market would be incredibly challenging for somebody, whereas having that kind of managed proposition is you know is a one-stop shop, really. You know, is that the kind of product that you would say that that Chinese residents are looking for?

SPEAKER_01 7:17

Yeah, so I mean, when we look at what Chinese students want, you know, specifically when they come overseas, there's different elements that play into that managed service side. So safety, security, you know, that's always very high on the list. Proximity to universities is very high on the list. So I think there's just a lot of good things that that PBSA have been able to offer the Chinese market that's appealed to them. The the actual facilities, what they're looking for, things like wanting to have an ensuite all plays into that safety of being in your own space and having your own comforts. Perhaps, Gabrielle, you might want to expand on that from what you've seen as well.

Safety, Service, And What Chinese Students Want

SPEAKER_00 7:54

Yeah, definitely. I think the word security is probably the most important one that you mentioned there, not just in the traditional sense of being physically secure on site, uh, because there are a lot of reports in China in the domestic media about the safety and security of living abroad in Western countries such as the UK and the US and how unsafe some of our big cities are for both petty and violent crime, some of which may be exaggerated, some of which may not be. But certainly compared to life uh in China in major cities, there is a big difference. So having things like 24-hour security in PBSA buildings is really, really important. But it's not just security in the physical sense, I think it's also in the operation and the financial sense, you know, having all the bills included together, knowing what the price is going to be up front, sometimes having the ability to pay everything up front as well, uh, or at least to have a clear idea of what those costs are going to be and the ease in which you with which you transact with a professional business, I think can uh afford a lot of security and a lot of reassurance to families in China who are sending their children abroad for the often for the first time to study for a whole year or longer.

SPEAKER_04 8:54

And I guess there's been lots of reports recently about you know that Chinese market diminishing, you know, people aren't interested in studying in the UK anymore. I mean, from your point of view, how much is that changing? How much is that scaremongering? You know, should should the UK sector be worried about less Chinese students coming to live in the UK?

SPEAKER_01 9:12

That's a very good question. I think always everyone needs to be open-minded. I mean, these trends shift so quickly. We live in this global political environment, right, where we don't really know what certain leaders in the world are going to say next, which has a heavily, a heavy influence, should I say, on like traffic. So, you know, one year perhaps the UK might go for a negative trend, but then something happens in another market and that quickly change. When I was in China last week, there was lots of discussions around parents wanting to send their very young children to the UK for boarding school and and to get into the UK uh education system earlier. So it really depends who you speak to. And then you just got to see what's actually happening on the ground as well.

SPEAKER_02 9:54

I think we've seen the numbers looking reasonably good for undergraduates. I think the concern overall, especially from operators that I speak to, is the Chinese postgrads. And that I think is more of more reflective, not just of China, but of a wider postgraduate trend. And that makes it very difficult for operators who have previously seen Chinese postgrads in particular as a bit of a cash cow. There are some operators that have built their entire operating model on that. So I think, you know, yes, you're you're right to talk about those those changing trends. But yeah, what what are the numbers looking like? What have they looked like over the over the past sort of couple of years or so?

Trends: UG Growth, PG Softness

SPEAKER_00 10:32

Yeah, definitely. I mean, just on that point, Dan, in the past few years, maybe from sort of 2017 to 22, 23, we had an absolute bull run in, you know, 10 percentage point growth each year in the number of Chinese postgraduates coming to the UK. So while we're not seeing as much or as fast a growth from that peak in 2022-23, which by the way was itself an exceptional year because of late COVID pandemics that happened on the Chinese mainland. We have seen a little bit of a dip in postgraduate acceptances depending on the exact data you use since then. Maybe it's three or four percent down year on year in the last academic cycle. I don't think that's anything to be hugely concerned with over the next five years, especially in combined with the data that you mentioned. I mean, UKAS is seeing uh many more and more Chinese students applying for undergraduate, perhaps a 15% increase depending on when in the cycle you look for for the previous cycle, which is is obviously brilliant, but because it provides housing providers with three years plus customers to look at rather than just that one year, which was so attractive for Chinese students coming to the UK.

SPEAKER_01 11:30

Yeah, I was just gonna add to that. I think where we need to look a bit closer, though, is like more the local market. So the city markets where the different universities that are operating, when you look closer at the data, you see quite different trends. Some universities doing exceptionally well, some coming off for different reasons. So whilst the kind of general direction, I don't think it's quite as bad as perhaps what people were thinking. Yeah, I was gonna say, so I think in reality in the UK, we're just gonna see different markets do very well and some not so well, linked to Russell groups, linked to QS performance, how are they performing internationally? And it's worth mentioning. And I was I saw it firsthand in China, you know, some of the universities out there are doing a very good job, better attracting uh domestic students. So we've just got to appreciate we're in a globally competitive environment now. And if we want to capture students to the UK, we have to be aware that they're also applying for universities all around the world, and it's not just they're applying for a few different ones in the UK anymore.

SPEAKER_00 12:27

That's absolutely true, Sam, that we are seeing a steady increase in the number of mainland Chinese students who are going to proximate countries, as is in addition to mainland Chinese universities, which are climbing up the ranking. So we're seeing more and more students study in South Korea, say, for example, study in Malaysia, Thailand, and other places like that. So, what we have to do as operators and as educational institutions in the UK is to remember why students want to come here. And certainly geopolitically in the past year, students want to come here because it's not the US, because it's not Canada, because it's not Australia. The Chinese government released data last year to show that the UK has overtaken the US finally for overseas studies from China as the largest destination for study. So that's a promising sign for us. And I think that's only going to continue uh to benefit us with the chaos being caused by Donald Trump and also some of the managed enrolment limits in in other Anglophone markets as well.

SPEAKER_03 13:20

That's great, and that that's really, really interesting. Hearing you guys speak is, you know, there's so much we don't know about China and operators don't know about China, and what are the things that they should be looking at and thinking of and monitoring kind of over the next few years around there's all lots of positive things that you're speaking about, and what should they be aware of?

SPEAKER_00 13:38

Yeah, what what one of the key things I'd like to pick up on is individual city dynamics, which Sam has already touched on uh already. In the next few years, I think we're gonna see an even bigger increase for the Chinese government to push Chinese students at both undergraduate level and postgraduate level to study course topics which are aligned with uh national development goals in key research areas uh such as AI, other forms of technology. So, from our perspective, knowing those courses that are gonna be valuable for Chinese students coming to the UK is gonna be absolutely crucial. And working with institutions to predict where those students are gonna come is going to be essential for predicting your revenue in the next few years.

City-Level Variations And Global Competition

SPEAKER_01 14:15

I think from my side, there's perhaps been like an educational layer missing. I know uh Gabe and I have spent a lot of time trying to educate the market on how Chinese students behave, you know, what their parents are looking for. But I think if there was an ask today, it was the operators just spend a bit more time looking at the digital ecosystem. It was so interesting when I got on this flight to China last week at the airport at Heathbrow to get my immigration card, I had to scan a QR code with WeChat, which opened up a mini programme. And that's just touching the service. I just think if operators can better understand that end-to-end user journey, it will allow us trying to help operators drive more direct sales, operate more efficiently as well. And there's a lot of similarities. It does feel alien on first impression, but when you understand platforms like WeChat and Red Note and Doyin, there's a lot of similarities to Western platforms. And once you get the gist and you get the understanding, then that whole end-to-end user journey becomes easier to digest and understand. And maybe that's our job, right? Maybe we need to do a better job at educating the market and bringing a bit more of this conversation to the table.

SPEAKER_04 15:22

I mean, that's exactly what we're we're here today to do, I guess. And I think what you've really sort of touched on there is maybe one of these myths. You know, you guys are very much talking about direct marketing at that top of the funnel stuff. I can imagine that there's a lot of our audience that are thinking, yeah, but Chinese students find accommodation via marketplaces or an international education agent. Are you guys saying that's that's not the case?

Direct Research Vs Agent And Marketplace Myths

SPEAKER_01 15:45

It's a good question. So a lot of Chinese students do find universities through an educational agent, and some educational agents have good relationships with marketplaces. That's known. In terms of is that only where they're looking, that's not the case. So I was looking at the data before this call. There are so many Chinese students that do look beyond just marketplaces, particularly at the research layer. They're on Chinese social media trying to understand about their living options in a city. They're then trying to understand what brands and what buildings are possible places that they could live. They then go looking on WeChat where they find mini programs. They go to or they try to go to brands' websites. There's lots of different ways that they find. Where they actually convert is a different story. And there are reasons why students might convert more through a marketplace than through direct at this moment in time, which I think we'll probably touch on at some point today. But to be direct, Chinese students are looking through multiple different channels to find their living arrangement, and then they're converting through the one that perhaps offers the best price to give a bit of an indicator or the best service.

SPEAKER_04 16:53

And I guess that also speaks to Gabe, obviously, Tong, you don't just deal with brands in the real estate world. You, you know, you deal with lots of brands, you know, from fashion and food and, you know, all sorts of different things. So I guess that just replicates that behaviour, you know, that young people, anybody likes to do research before they buy something. You know, and I think quite often the sector just thinks that a potential buyer will go to a marketplace, put all their trust in that marketplace, do whatever the marketplace tells them, and magically convert. And that doesn't sound like that's the case, you know, at all with their kind of buying behavior.

SPEAKER_00 17:27

I wonder where they might get that idea. Chinese students and their parents spend a huge amount of time researching across a whole lot of different areas, not just for uh study, as you say. As you say, we represent a number of different brands, you know, from skincare to luxury fashion to Heathrow Airport, as Sam mentioned before. So making a decision to make a purchase is part of a multi-layered strategy of digital engagement with the brand itself and also with third parties, such as aggregators. And because the marketplace aggregate pricing and availability and all these sorts of things, it's a very useful place for them to do that research. And if they are heavily incentivized to make the purchase within that, then they are likely to do so. However, it's evident growth of some of my businesses over the past few years, but that's certainly not the case for the whole for the whole market.

The Marketplace Monopoly Problem

SPEAKER_02 18:11

Those incentives do worry me. Uh, I mean, I I I have my soapbox here. So the elephant in the room is the the major dominant marketplace in China where we see some student accommodation operators, certainly not all, but certainly some of the premium student accommodation operators wrapping up exclusive deals where they'll only list with that specific marketplace. And it's led to I I think something of a monopoly. Now, my I have my gripes with marketplaces in general. I've worked with them, I have seen the good, the bad, and the very ugly. And we do still see that practice of taking the commission that was supposed to be, you know, for selling the room ultimately, that is then being used as an incentive to just get people to just poach away from booking direct. And I have a real problem with that. And you know, I've I've always said that should be written into a contract, that no marketplace does that and tries to undersell and outbid and poach from uh from an operator. And yet we still see that being done. And I think there is this narrative of, well, yeah, you have to list with a particular marketplace or you just won't get the bookings. And I think what it's been good to see is that firstly, other marketplaces are available, not just the the big incumbents that that we all know and uh in new homes. And and I think I want to make sure that it is very clear that yes, you homes can can offer bookings, but the alternatives are there from a marketplace perspective, but primarily from a direct booking perspective. Because if you went to a hotel 20 years ago and said, by the way, in 20 years' time, you're going to give away 20% of your booking revenue for every single room to a website effectively that is selling your rooms. On your behalf. I don't think that any of them would have would have snapped your hand off. I think they'd have said, you know, get lost. There's absolutely no way we're going to tolerate that. Now it feels like PBSA is in a bit of a pivotal moment with marketplaces at the moment. And I think there are some going down the journey of ah, we're just going to go all in, because either we don't have the teams or we're going to let, you know, particular marketplaces just go and do our bidding for us. They can represent our brand, whatever. Well, there's a student in a bed, we don't really care. But I want to I want you guys to be able to showcase and talk about how you can also help to curate that brand directly because I do worry about a monopoly. I do worry that the horse has bolted in the sense that you know there is one very particularly powerful marketplace out there that is starting to dictate terms, both in terms of exclusivity requirements, but also in terms of commission levels now. This is one of the first years that I've really seen clients of mine having commission levels pushed and driven because of that loyalty and the amount of bookings that have been shown. And I think that we will end up in a few years' time where this is the only source for of Chinese students that some of these operators have, and they are completely beholden to the marketplace. And I think that that is a dangerous place to be. I understand the business model that is being put forward by UHOMES and by any other marketplace that demands exclusivity. Does that mean I like it? No, it it doesn't. But how can you fight against that in the sense of how can you persuade operators not to just lump in with marketplaces and to go that sort of direct route and carefully curate their brand? And is that something you feel you really need to do?

Price, Service, And Direct Booking Barriers

SPEAKER_04 21:45

I think just to kind of, I guess, pick up on one of Dan's many points there, which is you know all really important, but I guess the one thing that's been like baffling and puzzling me is that point about direct bookings and that comparison to the hospitality market, really. Gabe, Sam, can you see a time where the sector acts like the hospitality sector and offers a breath price guarantee for booking directly? And who would this benefit most? And is it possible and who would police it? But that's the only real way of kind of building in that direct brand equity, really.

SPEAKER_01 22:19

Yeah, I mean, some fantastic conversation, Dan and Sarah, some really good points. I mean, fundamentally, if we're just looking at from the student perspective, that are wanting to study overseas, that themselves and their parents have got a budget. If given the opportunity, if they could go to one place and get that same room for 5% cheaper, where are they going to go? And and this is the position we find ourselves in, talking with operators about their direct marketing strategy and being worried that if they put an exclusive deal on the mini program, it might disrupt or annoy the marketplace and that relationship might get affected. This is the environment we live in right now, right? So, I mean, all we can say is based on the data, the Chinese students are looking directly, they're spending time to engage with the brand. Many students inquire. I think there's a conversation on how can operators can deploy more resources or or give more time to convert Chinese students. And I think certain business models aren't quite set up effectively. If that inquiry is triaged out and it takes a few days to reply, we can't expect that Chinese student to stay around. But I think the two fundamentals behind it is price and service. I think the service is solvable, but the questions that I like to put back to the room as well is about the price. You know, I do believe that operators need to offer a competitive price if they want to actively persuade more Chinese students to live with them. And we can do the best job in the world at the marketing level. We can create the beautiful brand, but the student may end up converting with the marketplace if that room is five, six, seven percent cheaper. And a lot of that return to the student is through cashback. And as Dan has pointed out, that cashback is getting created through the commissions that have been developing as well. So it's something that needs to be addressed really soon, and it's something I'm quite passionate about. And I think people need to have quite honest conversations. If they want direct sales to be effective, the platforms and the environment is there, but the thought and the processes therefore need to be deployed in that way.

Payments, Language, And Team Readiness

SPEAKER_04 24:19

I mean, I know, Sam, that we've talked about it over the years, and I guess that's one of your concerns is the ability to actually transact a booking and deal with it. So, like you said, you know, Tong will do a fantastic job at generating awareness, they'll come down to the WeChat mini program. What happens then? Because if you can't pay in a in an effective way that Chinese people want to pay with, then you're not going to go any further. If you can't access a website or booking platform and it be in your language, or you can't speak to a booking consultant in your language, then how on earth would you complete that transaction? I guess, you know, quite frankly, has the sector got lazy? Is is that in a too hard to deal with box, which is why they've ended up in this marketplace situation? Is it worth pursuing? Is it solvable?

SPEAKER_01 25:07

Well, it's 100% worth pursuing. I mean, talking about some operators, the money that they're spending with agents is the the mark, the direct marketing sort of investment is a fraction, right? So there's huge opportunity and cost savings, and looking at that cost per acquisition. The reality is the technology is there. We can take payments through a mini program. Is has the operator got the right payment backend to support that? Maybe not. Could they accept the payment and reconcile it differently? Yes, they can. So, and even booking integrations, we made a lot of progress in directly integrating with systems, but the whole end-to-end process is a bit dysfunctional. And at some point, the Chinese student probably will want to confirm their choice. They want some reassurance, they want to speak with the brand, and the brand need to make their team available to comfort the student and steer them in the right direction. So, so none of this is a problem that can't be solved. It just requires a little bit more thought, a little bit more commitment. And we see how invested brands are in the marketplace. I do believe they could potentially give up some more time and spend more time looking at this direct strategy. And Gabe, maybe you could expand on that as well from your lens.

Own The Funnel: Investment Not Cost

SPEAKER_00 26:16

Yeah, definitely. I agree with a lot of what has been said already. I think that it's uh there's no question that your agent relationships as an operator are very, very important and they should remain so for certainly for most operators. But the real danger is giving away the sales funnel, which I which you already may have a little bit already, or you perhaps you haven't attempted already, to somebody else. And it's in often in their interest to obfuscate that that sales funnel, whereas in reality it's not alchemy. It's something that you can replicate yourself to a smaller extent, built around your specific brand, and you can tailor it specifically to your business as well. That's really the message I want to get out there. Because as you say, Dan, the the the danger is in the next few years that we see commission level rising, get operators who lose the ability to understand where their Chinese students are coming from. They're such an important part of so many people's revenue, and not understanding the sales funnel, you would never let that happen in the UK with your marketing team and with your sales team. So having a site team member or someone specifically there to nurture leads as they come in from marketing is absolutely essential to deliver that quality service because that's what Chinese students and parents really, really expect is a good level of service to build that trust in the brand quickly. So if you can do that in combination with a good quality uh digital marketing program and the right kind of tech such as a mini program, then there's no reason why you shouldn't be able to diversify away from specifically one agent in general.

SPEAKER_03 27:38

Is there partly a terminology issue here that everything that you are by saying makes total sense to me as a marketeer? You want to take control of your destiny, you want to make sure that you're marketing direct to your customers and ultimately you want them to book direct with you. That's the holy grail. But is it far too often that the process of going through that is seen as in cost, not an investment? That it it does take time, it takes an investment, but that investment will pay off. And how do you view that? Is that part of the challenge that you're finding?

SPEAKER_00 28:10

Yeah, I think the operators who have done the best job are exactly as you say, Deanny, are the ones who see it as an investment, not a cost. Um, it's an investment in the medium-term commercial success of your business and also the security of the revenue uh a few years down the line, rather than this is an upfront cost that I have to deal with now when I'm squeezed towards the end of this cycle.

Brand Equity, Experience, And Rebookers

SPEAKER_02 28:30

I think that's one of the key things to focus on. The fact that you're building brand equity. This isn't just purely an ROI play. And I think that's where marketplaces obviously they're just filling rooms, filling rooms constantly. Whereas you're able to help to curate that brand. Now, you know, Sam obviously leads are coming through the the WeChat mini programs that that you're creating, which is great. I think where we've where what we're seeing in the UK in particular at the moment, but also also elsewhere, is that there are some operators that to bring it back round again, I think they are lazy. I think some operators have just allowed uh it takes me back to to a conversation a long time ago with with quite a well-known person within the sector uh who has worked at marketplaces and operators. I won't actually reveal who they are, but every everyone will know. And they said, Oh, we're just going to allocate, you know, in the operator, we're going to allocate 3.5% of our revenue budget and just give it to marketplaces. Then we can scale back our marketing and and kind of go from there. And I think that was, you know, again, that that brings me background to my literally my first event in student housing was class conference. I think it was Lisbon back in the day in 2015. And it was Luke Nolan from student.com, the guys from Uniplaces, and I think Geordie from Housing Anywhere, or someone, someone else on stage. And I was from the hospitality and travel industry, knowing what I'd seen and as how booking.com had approached hotels and just started saying, oh yeah, we'll start at 5%. And then that's just been pushed and pushed and pushed to the point where, you know, booking.com or Airbnb, et cetera, 18 to 20%. That's what you're paying out. They did a QA session at the end, and I said, Listen, how can we control what you're trying to do? You have big capital behind you. I think student.com had just raised something like$70 million at the time. You've got big capital behind you. You're going to be get really increasingly aggressive. How can how can this be controlled? And their answer was, you still have to curate your own brand. Like this was the very nascent days of the student housing marketplace. And there was a free, uh, you know, there was a real understanding there from those CEOs that marketplaces should be a bit of an extension of your your leasing, uh, marketing and leasing arms, but should not be the entire sales funnel or you know, revenue marketing budget. And I do see that that is where some operators are going. But I think they are there are some of those operators that started off as owner operators and now find themselves doing a bit more third party. And I think there is a bit more understanding from investors that marketplaces cost a lot of money, without a shadow of a doubt. And unfortunately, you typically need marketplaces when the prices are highest, when the commission is highest. So August, you might be looking at 20% if you've got a, you know, if you've got rooms in Nottingham or Sheffield or even the likes of Bristol. Anywhere where you're underoccupied, marketplaces will be able to kind of hold you over a barrel. And that's not me doing a disservice to marketplaces. They do a, you know, they do a they do certainly offer an opportunity to fill beds at certain times in certain locations, but you really do have to pay quite a lot for it. And it's a short-term investment. Like you sign year after year after year and it resets every single year. Of course, there's a little bit of a relationship built up there with marketplaces. But if you're not offering the commission that someone else's, you will be deprioritized immediately. If you're not on that must-day list or whatever it might be and paying for the privilege, then you will be deprioritized. It's that simple. And that's where, again, this is more of a statement than a question, but Sarah, I know you've got your keen to talk. But that is where, again, building your brand locally in source makes a massive difference. And I think that is the opportunity that you've got to sort of say, listen, this shouldn't be seen as just an alternative to marketplaces. This should be one of the core parts of the marketing strategy. And Sarah Deany, you must deal with this constantly with people saying, How do I fill beds? Okay, go to marketplaces. Well, that's a short-term band-aid. You know, you can work long term and start to curate your brand.

SPEAKER_04 32:31

That's, I mean, that's where I was going with the next question, really. Is why should an operator want their own, want to direct market in China? What's the benefit? How would a resident, I guess, behave differently if you had acquired them directly versus if you had acquired them via a marketplace? You know, what what is the long-term benefit?

BTR’s Pull: Flexibility And Amenities

SPEAKER_01 32:52

I just I just wanted to touch on the brand point, but there's no coincidence. When you go into marketplaces, a lot of time the brand of the operator is removed. You see it in the listings, and that's strategic is because the marketplace doesn't necessarily want the student to go looking for the brand. So the brand's very important, and I think that that must be sort of addressed and understood. So brand building needs to needs to stay. Yeah, so the point of why a why a company or why an operator might want to have a brand and directly market it. At the end of the day, when as soon as that student lands and is living, they're living with you, right? And if you have a diluted presence, maybe the Chinese student doesn't even know. I mean, there's been lots of cases where Chinese students have arrived at a building, assuming the building will say you homes and it says an operator, they have no clue. So there's no engagement really between the brand and the student unless that's built. And, you know, we've had a really successful period recently helping operators with rebookers. And it's real evidence that Chinese students do want to engage with the brand directly. They do want to understand, they do want to feel part of something. And just to borrow sort of thoughts, I know there's been a lot of discussion about the model with uh there's been a lot of discussion about the model with hospitality and booking.com and stuff. But I do believe operators need to think a little bit through the lens of hospitality. Could they give their Chinese student a better experience themselves across as a brand, but also on the ground? And that's all going to benefit. And I think the end goal here really is ensuring that Chinese student acquisition is diverse. It's not funneled through one player who could potentially choke the supply and use that to their advantage at any point in the cycle. And I believe we've seen that already in the past because of the commission rates that grow at certain times in the year.

SPEAKER_00 34:32

Sam, I think that's such a good point. I think especially your point about experience is really, really important. You know, Chinese customers across sectors are looking for experiential consumption. And it goes, and it's it goes without saying, I think, to everyone listening to this that you are selling an experience when you're coming to the UK to study and to stay at a premium accommodation building. And brand is therefore essential for you, for your identity, you know, for customer loyalty, for attention, if you said Sam, as well as to attract new customers. And then also crucially to differentiate yourself from competitors. We've got absolutely great housing stock for students here in the UK, but to be completely blunt, for a lot of Chinese students who are looking where to study in the UK, it's quite hard for them to see big differences. And a big way for you to differentiate yourself is through that brand and to sell that sense of experience that may come from uh, you know, how you utilize your on-site events, what kind of brand you have, what kind of um uh online engagement activities you have to really bring the whole experience to life. Uh, that is something that people do absolutely across sectors in order to win preference and to win customers in China and in the PBSA, in the BTR, and in the housing sector is absolutely crucial.

Contract Lengths, Laundry, And Pets

SPEAKER_03 35:37

I was gonna say, I think that's part been part of our frustration being in the PBSA sector for so long. For Sarah and I is brand has always been ignored and it's been really starved, brand market has been starved. That is changing in the sector, and I think brands are beginning to believe in the power of brand and make that investment. I guess really, Sam, I just wanted to go back to what you said right at the start of this, and it's actually you're the second person that said this to me in the space of a week that actually more and more Chinese students are being sent over here from a boarding school age, a much earlier age. And for me, that plays into the brand question that actually if they've got a brand and they're in the UK and then they go back to China when they're making a decision on university and speak to their parents, you need to be able to access that brand that they're talking about and that awareness much much much earlier. Kind of what's your views on that?

SPEAKER_01 36:23

I think when we look at the fundamentals of Chinese marketing, one of the things I learned very quickly from 2015 was just the power of word of mouth, right? And and what does that really mean? Well, we want Chinese students, consumers, parents to talk positively about their experience, the brand that they're living with. So if if that's not present, if there's no brand, there's no experience, you're not going to win that. So, you know, it's so, so important. You know, I know we're banging the same drum now, but yeah, like I don't know what else I can say on that matter.

SPEAKER_04 36:54

I think one thing that I'd like to touch on before we kind of wrap up for today is another elephant in the room. Is, you know, we've talked a lot over the past year really about the popularity of build to rent with with young people, particularly with students. And I think we've we've seen it, we've heard it, we know it's going on. So why might Chinese students be choosing to live in a build-to-rent building over a PBSA building? Is there something about the product that PBSA is is missing?

SPEAKER_00 37:21

I think part of it is flexibility of contract length. I think part of it is amenities. Uh, I see uh increasingly students asking if they can bring their pets, for example. They might want to adopt a pet when they come here, they might already be here and have a pet. I think some of those are uh are quite attractive to BTR, yes. So so that's definitely something we're monitoring very closely in the last couple of years. How about you, Sam? What do you think?

SPEAKER_02 37:41

But just quickly, what about laundry as well? Because I doing the many reports that I've had to do in Leeds uh in particular, where there's a strong BTR market and a strong PBSA market. A lot of the PBSA general managers in particular were getting direct feedback from students saying that they liked the fact that BTR had washing machines in each apartment or potentially even in each studio, in some cases in Leeds uh in BTR, compared to the usual communal places. That won't be uh you know, that that won't be news to anyone, I don't think. But um uh have you had much feedback on that as well?

What Happens If Nothing Changes

SPEAKER_01 38:15

100%. I mean, in some of the listings about these buildings on the mini apps, we literally say laundry or or washing machine in room. So that there's some very important amenities that the Chinese students are after. I mean, what I can share is it was probably 2023 that I was on a different podcast webinar. I was talking about the trend of Chinese students looking at build-to-rent options. Typically, they're students that have been in the UK for more than a year. That's one area that's quite interesting. From a marketplace perspective, build-to-rent isn't as established. So students quite often come through PBSA, university accommodation, they then walk around the city, they see these beautiful buildings, they go inside, they see all these great amenities, facilities, and they say see a price that if they're living with their partner, it's all quite competitive. So it's no surprise to me that it's attractive, and and the data supports that. And there's been a few times over the year where operators have reached out from PBSA and said what's going on in the city, and I can see in the data that a lot of that traffic is going to build to rent. So I I think it's here to stay, and I think we just have to accept that the build-to-rent sector's gonna carve away at the Chinese market or it's certainly gonna appeal to them, Gabe.

SPEAKER_04 39:30

I was just gonna go back to Gabe's previous point. And is this one of the myths that you were talking about flexibility with contract? And I think one of the massive assumptions is Chinese students want 51 week contracts. And you know, are you saying that's that's not the case? Why why would they want a shorter contract?

SPEAKER_00 39:46

For for for quite a few different reasons. I've worked on some BTR project projects in the last few years, and and there was a you know a diverse range of of um of contract lengths that people were asking for, either because they're coming for pre sessional English courses, say, for example, over the summer. Or they're coming for uh from a sem a semester project during the cycle. Uh so there's there's a lot of different reasons that certainly I've encountered why people are going for a for a flexible length, um, even if the majority do go for those whole years, as you said, Sarah.

SPEAKER_01 40:12

And a lot of Chinese students during the summers are looking for jobs, you know, in different potential markets. They travel Europe. So there's lots of you know real reasons why they would be looking for that flexibility.

SPEAKER_00 40:24

That's a fantastic point, Sam, because of the uh the graduate route, which the government has just committed to keeping. Uh, so for 18 months after they graduate, say they've been to PBSA or BTR, they'll then be looking for somewhere to live while they look for a job or they start their job in the UK and then ideally go on to sponsorship uh from there. So that's an opportunity for BTR as well.

A Healthy, Diversified China Strategy

SPEAKER_04 40:42

And I guess it goes into what we're saying at the beginning that you know postgraduates may have traditionally wanted that 51-week contract. But actually, if we're looking at more undergraduates, you know, we know all undergraduates want the shortest possible contract generally that fits in with their course, you know, but and then in the summer, you know, if Chinese students, I guess, are staying here, they you know they have other things to do in the summer. Or if they know that they're gonna be graduating, maybe they don't want to move again. You know, if they're gonna be here for a year or here for three years and then work, then why wouldn't they go to BTR where they can stay as long as they want without, you know, without the hassle of of moving again? Which again, I guess, feeds back to what we're talking about brand. You know, if they found that brand, if they're loyal to that brand, if they have an amazing experience, then they don't want to move. So it is incredibly important. We we do need to wrap up soon, but I think we need to look ahead now. I think we've, you know, done a really, you know, thank you so much, Sam and Gabe, for kind of giving us a really great picture of of the market right now. But you know, where where are we going with this? If if nothing changes and everybody ignores your advice, what's going to happen in the next five years if people don't make a change? What's your predictions? I'll go to you first, Gabe.

SPEAKER_00 41:54

I think there's a danger that we as an industry uh cede this market uh to one uh or or or to several key players uh who are then able to agglomerate all of the data and uh as well as the market itself, uh, which is only a danger for individual operators but also for the health of the industry overall.

SPEAKER_01 42:11

Now, completely on the same page, I think we're heading to a situation where UHOMES essentially could own the market and whether that's good or bad. I mean, some people got different opinions on that from our perspective, I think it's a terrible mistake. And you know, Dan pointed out, not dissimilar to the hospitality sector, a few years down the line. I think a lot of people are going to be asking a lot of questions. And if this isn't addressed now, if people aren't thinking about diversifying China, that is the way it's gonna go. And it's a scary thought.

SPEAKER_04 42:42

And so I guess bearing that in mind, what would a healthy, diversified China strategy look like in 12 months' time? What would you like to see if people heed your advice?

SPEAKER_01 42:53

Good question again. I think first of all, like people are looking at it as marketplace or direct. I think we need to take a step back and just look at what is our Chinese recruitment strategy as a whole. We're gonna need to invest in the brand so that Chinese students and parents understand who it is they're gonna be living with. We need to keep our source of acquisition diversified. We need to be able to convert Chinese students effectively in-house, not just rely on outsiders uh to support that journey. And I think if if we can take that holistic approach, it'll be a very successful period ahead. And I don't think any of that is unachievable. I think all of the frameworks there, I think the tools, the platforms, the partners are there to do so. It's just about execution now. And that that's my message, really. Let's just get this funnel working effectively and looking at this holistically rather than one or the other.

Final Takeaways And How To Engage

SPEAKER_00 43:46

Yeah, definitely. It's a it's it's about uh nourishing and curating as you know a range of relationships uh with key agent partners who are absolutely crucial and do do a really good job as as we've talked about earlier, but also taking a step back and saying, well, what are the hygiene factors that I can address for me personally as a brand to encourage people to discover me, not just so they book directly, I mean it also helps with your with your agent sales as well, um, so that your brand is well represented in China and those who want to come to you to book, ideally to get the best deal, are able to do so.

SPEAKER_04 44:16

Fantastic. And I guess if anybody only listens to like two minutes of this whole amazing podcast, what would one message to to operators, developers, investors be?

SPEAKER_00 44:28

It's worth your time and effort to take ownership over your how your company is perceived in China. And over two or three years, you will be able to reap those dividends. Well put, Gabriel.

SPEAKER_01 44:38

I think for me, like you have to have a direct sales strategy. If you want to maintain your brand equity, you have to have a direct strategy, and if you give that up now, it will be very difficult to unpick that in the future. And I think I think that's a fair point just to leave that on.

SPEAKER_04 44:56

Perfect. Well, well put. Perfect. Thank you both so much. That was that was fascinating. I learned so much, and I'm sure the audience will have as well. And I think I guess there's the the clear themes that have come out of that that conversation is really about control. It's about operators, developers, investors thinking about how they control their narrative and making sure they're in control with their destiny and their brand effectively. I guess it's this it's a big strategic play, isn't it? It's it comes from the top, it comes from you know, what does your investment look like? How long are you holding the properties for? What's your goal? You know, are you talking about occupancy? Are you talking about revenue? What budgets have you got in place? You know, we know as marketers that making sure the right budget in the right place, the longevity, for the you know, brand building is not always there. So I think you know our message probably to the audience is to be looking at how they operate on the whole from a strategic point of view and how marketing directly to the Chinese audience would would fit in with that as well. So you've given us so much to think about. I know that I'll I'll be thinking about this conversation for a long time. And we've probably only touched the surface to be honest. So if you do want to know more, and we still strongly urge that you do, please get in contact with Sam and Gabriel. And thank you all for listening, everyone, as well. If you've got any other hot topics or ideas of what you want us to cover for the rest of the season, then please get in touch at hello at housepodcast.com and see you next week for more news news and insights from the world of shared living.