Flexible Living Isn't Just Short Stay Anymore - Why It Should Be a Strategic Decision, not a Plan B - a Lavanda Special

For this week's episode, Deenie Lee and Dan Smith sat down with Fred-Lerche Lerchenborg, CEO of Lavanda to discuss one of the biggest shifts happening in student accommodation right now – term-time short and mid-length stays. 

Term-time short stays are moving from a summer bolt-on to a core PBSA strategy, and the data shows the biggest demand isn’t “commuter students” but longer 30-day to 4-month stays. We break down what’s driving it, why it’s city-specific, and what operators and investors can do now to pilot flex without creating operational chaos.

We unpack some really interesting data and trends from across the market, including:
- The growing rise of 30+ day stays during term-time, reshaping traditional short-let demand patterns
- How a surprisingly small proportion of bookings are actually driving the majority of commercial performance
- Why performance varies so significantly by city — and what that means for scaling (and why a “one-size-fits-all” national strategy doesn’t hold up!)

PLUS we answer some of the big strategic questions for the sector, including:
Are flexible stays being treated as strategy… or just a fallback?
Are buildings actually designed for 30–60 night stays?
And is technology holding the sector back?

If today's episode got you thinking, and we really hope it did, please do share it with someone else in the sector who needs to hear it.

https://www.getlavanda.com/insights/30-day-student-stays-long-stay-flexible-student-accommodation-is-growing-faster-than-anyone-expected/

https://www.getlavanda.com/insights/the-10-that-matters-most-which-are-your-most-profitable-term-time-bookings/

https://www.getlavanda.com/insights/same-programme-different-economics-how-term-time-short-stay-demand-varies-by-city/

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

Why Flex Matters Right Now

SPEAKER_03 0:00

Hello everyone and welcome to Hamlet Share Living Podcast. This is a special finest episode of DC. And this week we're doing something a little different. There's no news, no views, no brand, just one topic and one guest. Because honestly, the this topic and conversation is a full attention. So without further ado, let's make it a little bit of a little bit of context before. If you've been following the EVS data state at all, you'll know that the conversation around flexible short state bookings during term time has been getting a lot louder over the course of the last few years, but especially as times are a little tougher at the moment. Operators are under real occupancy pressure, and investors are asking harder questions. So the old model of fill it in September on a 51-week contract, it doesn't have the certainty that it once did. So the question of what comes next and how you actually make flexibility work in practice, you know, and not just in theory, is one of the most important conversations the sector is having right now, which is one of the reasons we've been talking about it quite so much.

SPEAKER_01 1:22

And very fortunately, our guest today has probably spent a lot more time thinking about it than almost anyone else. And we are really delighted to welcome Fred Lurcher Lurchborg from Levander to the podcast. Levanda's been working with PBSA operators across the UK on making turntime short stays a real functional part of their model and not just a summer boltone or a plan B as we often talk about it, but really a genuinely strategic part of how they run their buildings. So, Fred, welcome. It's really great to have you with us.

Levanda’s Origin And Vision

SPEAKER_02 1:55

Hi there, and uh thank you for having me on. And I'm super excited to be uh on the podcast. I am a frequent listener and keen to talk about this topic and all the questions around it. Amazing.

SPEAKER_03 2:06

Um Fred, can you give us a bit of background as to as to you and Levanda and really where you're up to now?

SPEAKER_02 2:13

Yeah, happily. So, Levanda, we're based in the UK, although we serve Europe-wide and global markets. And we started out on short-term rentals. Uh, this is pre-pandemic, it's about eight, nine years ago, and we realized that there was a space for filling gaps, typically summer at that point in time. Um, however, the typical systems, operations, and business plans, to be fair, did not factor that in. So this is kind of the professional side of Airbnb and booking. At that time, it was very focused on the summer, and we built a business uh around that, supporting uh built a rent, but increasingly student operators to help fill hospitality stays in there in the easiest possible way. On that journey, we discovered that actually the systems were the thing that were most exciting about the tech, and we built out a full short-term rental property management system and then continued to build out a full long-term booking engine to combine the two in our vision. And our vision ultimately is that short-term rentals and long-term rentals are combined together in a system where people can set the dial all the way in one side of that equation or the other, as appropriate to their strategy, market, and as we're seeing right now, economic backdrop. And so at this point, yeah, we we work with most partners across the UK, increasingly across Europe. And uh yeah, super excited to talk about what we've been looking at today.

What Term-Time Demand Really Looks Like

SPEAKER_03 3:25

I have to say, I've been really looking forward to to getting you on the podcast, just because the journey that you've been through is is is fascinating. And I think also when you look at the amount of data and the understanding that you have within you know BTR and PBSA industry in particular, I think there are very few out there that would be able to talk with quite such authority about you know exactly what's going on and and and where things are headed. So I think let's let's start with that data because I think it does surprise people when they when they hear it and see it. And you know, the industry narrative around those short stays, it kind of started with uh for me personally, uh with the Edinburgh fringe and looking at um trying to fill certain beds in Scotland over the summer that you know were sold previously on a 43-week contract. And then that that then sort of you know approach really expanded across the rest of the UK. And more recently, we're seeing more commuter students. So I think that's sort of it's starting to creep into term time. So it it it's if you can walk us through what sort of term time short stays actually look like in practice and who's booking for how long and and what's really driving it.

SPEAKER_02 4:39

Yeah, no, that that's the piece that we are really interested in. I mean, two, three years ago, to be fair, term time short stays was not really a thing. As you say, it was generally the the fringe type festivals in summer, um, and that was kind of a very historic legacy of those unique things. What's been really interesting is particularly last year, but now it's exploded in this uh academic year we've seen so far, are stays of less than 41 weeks between September and June. So core academic year. And what we've seen is obviously there's this public narrative of the commuter student, but we've been going through um tens of thousands of bookings that we we see in the market. And these are across every single location, literally every single student town or major city or minor city uh across the UK. So it is it is a really interesting um set of data uh that we have built up. And actually what we've seen is that the commuter student is possibly a little bit misleading. It is actually very few stays that are people repeat booking every sort of Tuesday to Thursday and staying in that kind of traditional way we think of a commuter, you know, almost like a working commuter from another location. What we've actually seen is uh a huge amount of bookings that are over 30 days, but between about 30 days and three, four months. So think of it as like two, two, three months, and they make up, they're 10% of the bookings, but they make up over half of the booked nights. So over 50% of the volume is a is a is a topic essentially nobody's really talking about, which is people who are staying for one, two months, they're booking ahead of time, so it's quite a deliberate um booking. They're they're they're booking up to three, four weeks ahead of time. Uh it's not Lazmer, and they are all students, and they are um generally speaking, we can dive into why and how, but it's a huge volume of stays, and we're seeing that across the UK, which is really, really interesting.

Cost Of Living Drives New Patterns

SPEAKER_01 6:28

That I find fascinating. And I guess how aware is operators in the sector that this this is happening? And is this a product that is being provided for them, or is it just happening by chance?

Investor Fear And Plan B Trap

SPEAKER_02 6:41

Yeah, I think this is one of those scenarios where the market in terms of demand is moving ahead of operators and probably even ahead of channels, marketplaces, even tech companies. And I think it is because when we are speaking to these students, when we are trying to figure out what's going on here, a lot of it is relatively modern, but they are secular trends, meaning particularly cost of living. Cost of living is a huge factor. A lot of these students are simply unable to afford the full year, and they are figuring out smart ways to either stay at family, stay local, but then come in for blocks of time. So, for example, we've seen a huge amount of people who took September to October, kind of were there for that first couple of months, made some friends, figured that out, but then actually were like, look, I kind of run out of money and now they now they go almost remote or or go into these kind of long-distance travel things once they their cadence of two hours a week of lectures and home learning can kind of uh figure that out. Plus, the other way around, people are being very thoughtful about well, look, maybe I just skip the whole autumn term and then I kind of come in in sort of early feb, and that's just the trade-off I have to make. I think what's happened in the market is some operators have been quite savvy and thoughtful about the voids and been proactive in that last cycle we saw and said, look, we're just not going to get there, kind of accept that early on and then be a bit more proactive in putting in short stay availability into the turn time in September, October. Those that have done that, you know, whether it's accident or sort of you make your own luck type of scenario, they've then been at the forefront of seeing this evidential bookings come through and then have ramped into that opportunity. And and this, you know, the ones who are probably most on this are now making every single bed available, being really thoughtful about unit configurations. Can we move the people into clusters? Can we free up beds? And as a and as a reminder, all of these are students. These are stays of students in academic year. They are not, generally speaking, not tourism. People are people are quite careful with that. They don't necessarily open to that element. So this is much more of a change in the market demand. But I do still think a lot of, I mean, there's still a lot of investors and operators who I speak to who are quite new to this topic or maybe have a very partial view of it. Maybe they think it's hotels just purely coming into turntime. Is it co-level? You know, there's a lot of questions that would signal that it's it's it's a confusing topic, to be fair, because it's evolving.

SPEAKER_01 8:56

Are you finding from those conversations with kind of investors and operators that there's still a fear about this shift and this change that actually the market expects 51 week, 48-week contracts, and actually this is not something we do strategically, it's just something we do if we absolutely have to.

SPEAKER_02 9:14

Yeah, and I think it's a very, I'm very sympathetic to this. I mean, even in my personal background, I I come from asset management and investment background and in another life. And so I understand how hard this is to start to change your investment structure, your investment thinking. What does it mean to cap rates? There's a there's a quite terrifying number of questions that start to be posed once you start to question the 100%, 50, 51, 52 week kind of model. However, I think there's a growing amount of evidence and feeling and view and strategy that that the market is changing and in certain places and other locations. And you know, the way that I see it is it it is a bit of a sort of a falling knife situation. And the smartest, I think, are getting ahead of that. Now, I would say I think it's easier if you're in an integrated scenario, because obviously then the investor and the operator are a little bit more aligned and you can have maybe those those tougher conversations without a blame culture or or issues on that side. However, even in a third-party independent investor thing, I think it then just depends about who's who's being most thoughtful about this, who's being a bit more honest, who's not hoping that this cycle of rebookings and bookings will just sort of magically get back up to 100%. But I would say that it's very hard to take the opportunity of short stays and turn time if it is a plan B. Because by definition, if you think about it, you're in September, you're sort of wondering whether you're going to how's how's clearing playing out? October, you're kind of making a business plan, you get busy. If if this is always a plan B, then it really gets relegated towards the end of the academic year. And by definition, the academic year has kind of passed. So it really will be the winners are the ones who proactively look ahead, put plans in in place to make sure that their operator, their teams, their technology is fit for purpose here. And it means that they can immediately move into that opportunity if they need to and if they want to. And then I think there's a strategic dial of do you proactively do this? Do you actually free up beds and units and position into this, which I think is a really interesting conversation, or do you just have it as a backstop, but you can't have it as a lazy sort of lazy backstop that you pick up in January? It's too, it's just too late and too hard.

City By City Strategy Using Data

SPEAKER_03 11:17

Yeah, yeah. You cannot have this as a last-minute thing. I think what what every investor in particular and and by proxy the operator is looking for is that reassurance that you know you're ultimately going to fill those beds as, you know, with a with the highest possible um annual occupancy, not spot occupancy, but the annual occupancy. And I think that's something that that has always been, you know, has always been missing. And especially in times when it when it gets that bit harder, you know, I I previously would rely on 43 weeks, and then during the summer, I would really look to yield up as much as I could so that you know 43-week um rates weren't too expensive compared to 51 weeks, but there was that opportunity. And it does feel like city by city, the markets are are changing across the board. And obviously, having seen um some of your your data um uh with regards to how the the dip how different the the picture looks city by city, can you take us through what you're seeing and what this means for for how the operators should be thinking about this?

SPEAKER_02 12:18

Yeah, absolutely. I mean, you're you're exactly right. I think it is incredibly localized story by by city level. What we're seeing is actually a diversification or bifurcation of the market into so you have your basically your traditional short stay markets. So these are really Edinburgh, um, Dublin. These are these are markets that are high frequency, kind of um uh high, highly rate-driven, almost hotel style markets, and that they have their own dynamics. Then you have markets that are actually performing really well on this kind of mid longer, longer mid-stay uh interim time. So these are actually quite unusual markets. Um, so we've seen Nottingham, Sheffield, Birmingham, Bristol, Newcastle, Cardiff do do really well in this. Um, and there's lots of different dynamics there, but I think people are more uh sensitive to price and affordability. We're seeing a lot more kind of placement, exchange student um kind of demand, but also big enough cities where people can make this work about kind of staying with family or staying with an uncle for part of the term and you know make that kind of human kind of configuration up. Um and then there's some slightly more blended markets. Something like London is a very complex market, so you have to go down to almost postcodes, and obviously it's a very big city which has its own cost of living um dynamics, but also some unusual ones like Glasgow and York, where depending on the time of year, different models kind of work. Um, so what we're seeing here is you have to um get very intelligent about this, you need a lot of data, which is partly why we've been working so hard to uh build up this data set because it ultimately you can't sell into this market blind. But there is increasing evidence that regardless of what you do, if you just stick there at 51, 52 weeks, all you will really see is occupancy go down, and those other people will figure out by hook or crook whether how how they can make this work. And the only real strategy that I can see that makes sense is to get ahead, get informed, get get into those kind of data sets, understand that market, and then you can put pricing strategies uh in place for for those different markets. I'll give you an example where one operator, without without desperately trying not to reveal who they are, had a had a had a post-grad lien and were in sort of what I would call second-tier locations, and they found a sort of plus um six-week model worked really well. And so they used our data to figure out that actually quite long placements in their in their buildings for this for that particular tier was very attractive on that basis. And they've done phenomenally, phenomenally well at that. They know their brand, they they know who they are, they can match to the data to understand their dynamic. Um, but going back to the original point, you you need to do at a local level because it is it is a very localized thing, and you need to kind of expand your expertise and knowledge beyond the long stay market um at this point. I think otherwise you're blind to a huge, huge segment of demand.

Operational Model And Tech Stack

SPEAKER_01 15:06

I think this is brilliant. I think on house, we're often talking about the lack of data and the lack of kind of forward thinking on strategy. And I think actually what you're saying here, Fred, is that actually you've got all this data, you understand how these different markets are working, and actually you can work with those operators to develop a model that suits their market and their portfolio and what works for them. There isn't a one-size-fits-all, as we're often saying. How do you support those operators to ensure how do they get ready to kind of deliver this kind of new type of product to ensure it delivers efficiently?

SPEAKER_02 15:41

Yeah, absolutely. And and exactly right. So we firstly we, and for any of our partners, we'll do a free analysis of their whole portfolio down to the building level, really looking at the demand level between term time and summer as two distinct periods of time, and they are very distinct in terms of their behavioral dynamics. And then we'll also look at their long-term rental days, which obviously they will have or you know is available in the market. And then we can suggest a strategy across those three elements. And essentially, at a very minimum, you need to understand those as distinct phases and distinct dynamics. We then will also go deeper and look at the operational models to support that. Typically, in turn time, most people want to actually operate that in-house because you might be dedicating, say, 10, 20, 15% of the building to short stays. But actually, what you what you want to do is upgrade your kind of housekeeping teams to be able to help do the turn, but you need a lot of technology and support on some of the operations like vetting, for example, for student-only, which is absolutely critical. Guest communications, pricing is really important, channels, demand, branding, because you really want it to go also uh combining into your own flow, which can be quite different from summer, where you might want to bring in one of our partners to help support on the physical operations due to the sort of hotel hotel nature. The other really interesting thing in term time that we are supporting with now is also remarketing to those short stay um guests because ultimately, if you think about it, you have lots of students who are arriving in your building, they're staying in your building uh for maybe a couple of weeks, but they are studying in your city. They are almost always uh on a placement or doing some sort of fractural uh part of the year that they're they're looking at a very minimum, if not just a full student who's trying to uh save money. And we've seen really successful pilots that have been launching in the last couple of months of you know, obviously gaining their consent through the flows and everything else, but being able to say, are you actually also in the market for long stay accommodation? And then offering those is almost like a form of rebooker on the short stays. And then you know, in a couple of pilots, we've had 10, 20, 30 percent conversion into long stays for the following year or the extension of that year. So suddenly you get a sort of try before you rent model, which has which has uh worked in built-to-rent before. And uh, and you know, again, if you have people staying in your building, the you know, then generally going to have a good experience if you've got a good building and a good brand. So they are perfect people to then kind of move in full-time. And even worse, you don't want them to kind of come to Bristol, be in your building, not really understand how to book your building and then go book something across the street because you know they saw an offer somewhere on the internet.

Revenue Risk And Building Confidence

SPEAKER_03 18:08

Yeah, I I love that try before you buy um uh thought there, because I do think that, especially for international students as well, quite often they're looking for that temporary accommodation before they then go into um, you know, to either slightly longer contracts. But equally, universities are now starting to look at more modular courses. And and I think that this is this is perfect timing on your part, um, albeit it's timing that you've, you know, that you've had for quite some years since you've since you founded it. And I think that that's that's um it's gonna be really important to investors as well as as well as operators when it comes to a revenue perspective. So, you know, on that note, I think that's where some of the resistance to short-term stays and and you know, doing that from you know, price setting rather than just, oh, actually it's May and we're struggling for summer, so what do we do? Or, you know, we've got January semesters to fill, or whatever that might look like. Um, you know, it I think the perception seems to be that opening up to short stay um during term time, that could lead to some revenue risk or or leakage potentially. But, you know, I I think how do you push back on that? How do you show that this can be that stable, predictable income stream and and introduce a bit more certainty to it?

Product Design For Short Stay Students

SPEAKER_02 19:24

Yeah, no, it's a great question and fundamentally a very uh fair question. You know, I think it is it is obviously a concern if you are in a market that historically has been for however many years, full uh 51 weeks, you know, gold-plated and just going up by X percent. Um, I think those markets, firstly, there's a sort of half of it is a realization that those markets are dwindling. There are only so many of those markets where you can guarantee that. Um, and therefore, if you are going to end up with one, two, three percent of voids almost guaranteed in the new world order or higher for you know, heading up to 10. Um, I think that not to have a plan to monetize those, as long as the monetization of that is equal or higher, you know, it it's just like having a hotel where you sell you know nine out of ten rooms, you you wouldn't deliberately leave that room empty for a year, right? You to increase the revenue, you would almost certainly want to at least try and sell it for part of the year. The more interesting thing then becomes okay, well, I've sold it that one year, and we've actually seen an outperformance in these um midterm or short-term intern stays over the price, as you as you can imagine, right? People are paying for flexibility and people are paying for that. So the price is higher. Um, what we're seeing is where people go into their second year, people start to get more confidence and can show more evidence to investors because it's down to a building level. Um, so obviously, once you have building level data, that's where it gets really interesting. And again, a relatively small number, but are now into their, they're now in their second or third year now, they will start being very confident because they have one, two, three years of data. They will now be able to see that happening throughout the semester and all the different patterns. And I think there's a genuinely actually quite a smart edge for it, doesn't actually matter the size of company, but if you're if you think about it, if you can get that data into your building and your portfolio over a period of years, you will then be able to monetize that in a future sell-on in a data room or whatever. Um, because you're the one that understands that that is. We've even seen some very sharp P firms think, okay, I've actually done this successfully over here, and are looking at for buildings that are underperforming that don't have short stage, knowing that they could put that in and immediately kind of give an uplift on cash. So, really, uh what I would say, or what I try and say to investors is you know, investors always say that information is the most important thing, right? KPIs, data, et cetera, is the most important thing. If you're blind on this and you haven't tried it, then you almost by definition are deliberately removing yourself from an important part of information flow. So at the very least, pilot this on a one building, pilot this on a few units in an empty thing to start the flow of that information. Um, and and there, and the most fundamental thing is that term time is. Fundamentally different from summer. It is an all-year-round thing, and you want to get some units live in September, uh, October. Um, so you need to be telling your operators or you tell you telling your teams internally, don't wait in September and see how it's all going. If you've got 15 beds left, just put five in for that turntime. You know, it doesn't have to be a crazy amount. Let's start generating that data to give us the confidence to go into the underwrites, to go into the models, to go into the plans. Our biggest customers at this point are actually more sophisticated than you might think. I mean, they're they're careful about maybe what they talk about publicly, and I obviously won't share anything uh confidential, but but you know, uh they do have clear KPIs, it's in their underwrites. They've thought about performance um incentives internally. How does it work in budgets? How do asset managers get remunerated? All of that needs to be slightly tweaked because otherwise, you know, the dynamics go against against the uh greater good. Probably to be fair, the thing that is is the sort of holy grail and it hasn't happened yet, is a number of these flex assets, or sort of increasingly flex assets trading, because that's obviously the important point. What does it mean for Caparet? What does it mean for exits and stuff like that? But eventually that that will happen because these things will be built in, and then by definition, as portfolios trade hands, there'll be a view on that. I would say in in Iberia, if we look over there, flex has flex and summer starting to do turntime has definitely now been just baked in. People understand it, it's it's common. Um, so there is definitely a path towards it. I think maybe the UK has just had the luxury of not having to think about this.

Co-Living Competition And Student Preference

SPEAKER_03 23:30

It's exactly that. It's had the luxury of you know, borderline 100% occupancy year on year. And again, that for the last couple of years has been a bit more of a struggle after the post-COVID boom. And it I think one of the issues is that it's it's typically in a struggle in those cities where the demand maybe wanes for whatever reason, you know, university drops out of the rankings or more supply pops up, or or and thinking along the lines of a Sheffield or a Coventry or now a Leeds and a Nottingham. And and it's a case of then, I suppose, you know, understanding that this will work best ultimately. Obviously, pilot it. I think that's that's the key thing. You do have to test it out, but the understanding that what most investors and operators will probably want to do is pilot this in a place where their occupancy is quite, you know, is quite low already. And therefore, that demand, there's going to be more people coming to you for that. So it's a case of how you how you manage that and how you can then leverage that performance that you can showcase in those difficult cities to then generate that business elsewhere in some of the cities that are maybe a more desirable, especially for summer. I'm thinking London and Edinburgh and Glasgow, et cetera.

SPEAKER_02 24:41

No, I was just going to say you're absolutely right. There's a sort of an interesting circle of thinking where people say, oh, you know, Nottingham or whatever, whatever location isn't doing very well. Oh, probably nobody else will kind of want it. But that's really thinking just through that 5152. Actually, what we see, because one of the biggest things is the cost of living pressure, is that a load of people have been filtered out of your thing. You know, 51 weeks times X is the is the price, and essentially a whole bunch of people just simply cannot afford it. So that they're out already. They're not gonna, you know, they've already gone into debt, they've already done everything they can do to try and get there, then they're not gonna be there. So it's so if you just think about from like another different type of industry perspective, they're already the people who are not gonna buy your flight ticket at peak times, they're not gonna buy your business class or whatever it is. So you they are actually more likely to do your flex days. So that's why we've seen this kind of counter success, uh uh, we believe in Nottingham, Sheffield and all these locations. Those are the ones that have done the best with these mid-short-term stays in in term time because they almost like tap into this stream of demand in that market. Now it does, it does take you to kind of accept that that that is a thing and and kind of go for it, but but actually it's the lowest risk place because you're already not hitting your numbers. I think to be fair, some investors might worry that incentives can get skewed, operators might stop focusing on the long stays if they're doing this other thing, but that's the point of it being a deliberate thing. I think that happens if it's a plan B, pick it up in March and sort of figure out the last second. But I think if you're constructive and you work forward and you know, whatever happens in the background, you make your operators incentivised, you fit you bring hospitality people into your business, you know, there are lots and lots of different ways that you can do this proactively. It will actually help you solve your worst markets, as well as you know, summer, which is a very different thing in your more glamorous locations.

SPEAKER_01 26:26

I think it's also around the visibility piece here. It's I think where, and we talk about this in several aspects around PBSA, is that there isn't there isn't different products often when it comes to actual building. And actually, there aren't these products available for people to come and buy. But yet what you're telling us, Fred, is that actually there is a demand here, there is a market, there is people searching for this, and they're doing this without any visibility or awareness that this product actually exists, which I find fascinating. And it just shows that actually there's so much more as a sector we can be doing or should be doing. Are you seeing any shifts or change on a sector wide to drive this forward?

Practical Setup For Staffing And Housekeeping

SPEAKER_02 27:07

Absolutely. I I think we are seeing some, but not enough. I think the demand has moved way ahead of what the provision is. And I also think the question of what that provision hasn't actually been particularly well figured out. Even even us who has the most data in the market, I think, and and and see the most, we're still doing lots of work with the with the guest voice. We're spending, we're actually doing a huge project, which I'd love to kind of share with yourselves when when in in the next couple of months, working with the guests and students to go deeper in terms of like their motivation, but also what do they want? Because just because they booked this thing for two months, doesn't mean that was actually what they were trying to book to your point. They were just trying to get almost get in the building. And what we what we are seeing though in early things is that this is not most of them are generally speaking, um, pretty typical students. They're not necessarily looking for a full hotel style uh service, they're not looking for you know things like daily cleans or additional uh products around it. They are generally speaking trying to, you know, come to the accommodation, spend the time they're spending there, see friends, be part of the social uh and community of that building. They are often typically deliberately picking student buildings because they are of that demographic, that age, that, that, that, that vibe, and they wanna and they want to be in that construct, even if it's only for one or two months, make some friends, be part of part of clubs or whatever it is that they can be part of. But you get into interesting things there. If you're coming for two months, you know, should you give them access to the gym? If you've got an app, how does that, how does that link in? Should they be invited to the community event? Should you, you know, and I think those things we should be thinking about much more proactively. And I think particularly within the academic year, the answer to a lot of those things probably should be yes. They are, they are essentially people trialing your bigger product and should be catered to in a similar but differentiated way, equally with their rooms, like what access do they need? You know, do we make sure they're on the Wi-Fi? Obviously, because Wi-Fi is crucial, but there's lots of things that maybe not laundry apps, do you issue them with that, etc., etc. So I think the I would say um most operators are probably kind of figuring this out a little bit on the back foot because the demand has surprised them, but that's that's not a necessarily a bad thing, but there can be so much done now to think about that ahead for next term time. I think the the the the also the interesting thing will be those that slightly reposition or maybe create sub brands, and you know, there's a lot of space to do some creative stuff there.

SPEAKER_01 29:28

And where does co-living sit within that versus PBSA? Because co-living is designed and set up exactly for this model in many respects.

SPEAKER_02 29:36

Yeah, I think co-ling is super interesting, and like we we you know really like co-loving, we really believe in it. I think we're not seeing we are seeing students land in co-living buildings, we are seeing that. However, we are actually not seeing um, you know, they tend to be smaller buildings, they tend to be uh not student specific. And we are seeing students, generally speaking, wanting to be in the student experience and the student building. Also, co-living tends to be a little bit more expensive, which again, you know, is it is a cost of living pressure here. So, although we are seeing people end up in co-living, also things like built-to-rent in the bigger locations, in a lot of locations, you know, if you're going to Warwick or you're, you know, I don't know, you there aren't necessarily co-living around, and they might be uh quite physically small buildings and therefore might even be overwhelmed if five or ten or fifteen people suddenly want to go there for for for a month or two. Um so I think co-living's doing well. I think the the way that it could work out is if if if PBSA doesn't move to address this, I know a lot of co-living businesses are scaling as fast as they possibly can. So I think it's one of those things where if co-living misses the lunch here, then I think co-living will eat it and will go for it. But as we know with planning and getting buildings and building, it's not so easy for co-living suddenly go, I don't actually know how many co-loving units are, but they can't just generate another 20,000, 30,000 beds overnight. So it seems mad to me that a PBSA as a sector would leave however many thousands of empty beds they have, which is the truth of the matter, even even if you're just a few percentage points, it's that's many thousands of beds across the country, you're kind of letting someone else build scale into that demand.

SPEAKER_01 31:08

I think you're also making the point there several times is that actually these students want to live with students. And I think we've said several times, PBC doesn't make enough of the fact that they are designed for, built for, housed with students, and you live with that student community. And I think that's an important fact that we need to remember.

SPEAKER_02 31:26

Yeah, and I think it's sometimes easy. I mean, I mean, look, we we've I I forget it, we forget it in in Lavanda, even though some, you know, students ultimately are the ones that will go for that bargain, they will put themselves in a in an element of physical pain to go book an awkward Saturday night through to this, that month later, and yeah, it doesn't quite fit, but it but they'll make it work because it's important to them. However, that doesn't mean they want to do that in a building that's miles away from town, is completely filled with completely different people, and and ultimately, like while university is obviously about getting the degree and learning and stuff, as we as we I think for people who really believe in the UK university sector talk about as well, it is about coming of age, it is about making some of your lifelong friends, it is about being part of society and clubs and being exposed to other you know, fact people and socioeconomic, etc. etc. And I think that's not that's not gonna happen if you're in a very different type of product in a very distant location from from what you are. So I think for PBSA, I think for a lot of these people booking these short stages, it's almost a bit odd for them that there's this big building, there's units available because they can see it for the full year, but they can't, they're struggling to like get in the front door. They're like, I I want this thing, but I I need it for like five and a half weeks because my course is five weeks and I don't want to spend a load of money on the rest of the year. But they're almost banging on the door outside saying, How do I do that? And especially if you're coming from abroad, you've got language, complexity, confusion, agents in the middle, you know, there's a whole world of confusion, which is why they end up coming through natively organic online channels. You know, they'll use agents, AI agents to figure out the best way of doing it. You know, that that that demand is like water, it's gonna find its way into the buildings one way or another, but they are ultimately students, they ultimately want some version of the student experience. And PBSA is perfectly positioned to do that, but there is a bit of reorganization to do that.

SPEAKER_03 33:13

Yeah, totally agree. Just for a second, I want to get practical on this because we're you know, we're we're keen to talk about the the actions. This is this seems like a great solution at the moment. But um, one of the things operators do worry about is that operational lift of short-term bookings and and this sort of new layer of housekeeping and staffing and systems. And so I think it'd be really helpful if you can just explain what that really looks like on the ground.

Where The Sector Goes Next

SPEAKER_02 33:41

Yeah, no, no, happily. And look, it isn't it isn't zero. I I'd be lying if it's uh if it's no lift at all. It's very hard to do this if you're gonna figure this out on your own. And I and I don't just mean that from a Levanda perspective. Frankly, it's it's just like anything, right? If you were to build a long-stay student business and just do it on your own and never go speak to anybody about it, you would make all the mistakes that this this sector has learned from over the 20, last 20, 30 years. Generally, you you kind of want to divide on-site responsibility and workflows and online responsibility and workflows. And on we we believe in term time where you've got students coming in and you're doing, you know, only quote unquote X percent of the building, we believe it makes most sense largely for the on-site teams to help figure that out because it brings in their muscle. They understand who's in the building. These turnovers are maybe uh, you know, if it's two months, you know, think about it, one bed will only turn once every two months. So we're not actually talking about daily cleaning and all this kind of stuff. However, you need to find a good hospitality partner locally, i.e., your cleaning company will find a different cleaning company who can help you turn those rooms generally. That's that's the easiest because you want them to be able to take the linen and clean the linen, take it away and bring it back because we all know there's there's no cupboards, there's no space, etc. However, apart from that bit, you generally want to own that relationship with the guest yourself. Um there are lots of uh partners who might try and sort of take the whole thing away. And we do actually have a version of this as well, which we can if we have to, but we really think that it's more important that you create that relationship with your students there because you need to understand what the dynamic is going on, if there is a maintenance issue, what's going on like in that building. And again, it's almost better to treat those people there who might only be there for a month or two months as a normal student. It's it's psychologically. Um, however, everything pre-arrival, there is no real reason why that side team should should deal with that. It's high velocity sales, it's online, it's there's a ton of vetting, particularly student-only, there's guest communication. And really, you want a technology partner or a solution like ourselves who does technology plus a bit of a services to kind of deal with that, because that's where your team will be, you know, slightly driven mad. If they've got to respond to messages at midnight about a check-in coming in two days in Chinese, you know, in one second, if you drop the ball on that, it's gonna become one of those exponentially difficult, difficult problems, right? So you need a you know solution there to help you one way or the other. And stitching together systems completely on your own is is quite is quite painful. So again, that's why I think I mean our product is, I'd like to say, a result of the industry asking us for it rather than us prescribing it. We actually started just with the software and just with the ops, and then we realized actually everybody needs something in between and very bespoke for PBSA. Um so we spent a long time finessing what makes sense for them to them to do and for for us to do. But with that being up and running, you can move really fast. Like we can go live in a couple of weeks, you know, days if if they're available. Reality is that there tends to be a little bit of onboarding, etc. But the beauty as well is once your building is built and on online and working, like with most of these systems, you're then set for you're you're kind of set for for all the future academic years as well, right? Which is why piloting, getting things going is is always is always so important. I think there's then a separate question about your core tech stack and how do you how do you figure this out? You know, there's a reason why we went and and and sort of uh plug disclaimer incoming, but the you know that we we ended up building a long full long stay property management system in order to balance the two booking systems, you know, so you have short stays and long stays, but crucially you need to reconcile it in the inventory, you need to reconcile it in your finances and everything else. At the minute, we happily work alongside every long-term PMS out there, but we we're very happy to have people on board on our long-term PMS, which partners like Unite have and others, uh, in order to consolidate those so that you can get the best out of both of those and really bring it into a one one system, one dream kind of thinking. You don't have to do that, but that that's the kind of journey of travel that we would obviously love partners to go on. But we think that regardless of that, you can create a program operationally, get yourself up and running very, very quickly. And I'd like to think that there are actually enough voices in the market who are like, I've tried this, it kind of works. It's actually easier than summer because of the lower velocity and the fact that they're all students and stuff like that.

SPEAKER_03 37:44

I I have to say, I've seen the PMS, obviously, having done numerous um uh PMS reviews, etc., and it is extremely impressive. Um, to what to what extent? I mean, where do you it makes sense that you're putting those two things together, you know, to have the short stay side of things, then you understand, you know, how everybody is using that that PMS. And uh and I think that that is a sensible direction of travel. But where do you think that this goes? Is the sector going to adapt quickly enough? Or are we going to look at the usual sort of you know, 10, 15 year lag while everyone waits for someone else to go first? And then that flexibility really creeps in. Because the good thing about Levanda is that you guys are around for the long term. We've seen numerous other, you know, kind of PMSs and short stay providers come and go, but you guys, I think, have raised money sensibly, you've deployed it sensibly, and feels like you're part of the furniture now, but equally you're trying to revolutionize uh and transform the sector. So, so yeah, how how does this look? How where do you think this goes?

SPEAKER_02 38:55

In a sense, I feel very, very confident of where things will be in 10, 10, 15 years, right? Which sounds a bit mad to say that, but I we we really do believe that at that point you will have we I actually think these would be pan-European operators. I think this will look similar to the American market. I think you will have uh, you know, five to ten hundred thousand plus bed operators who will have a unified system and flex will just be in the absolute core muscle of that, as well as AI and other emerging technologies. I think it will be uh uh uh not even conceivable that those things won't be deeply embedded in everything. That doesn't mean it'll be everywhere. It means maybe, for example, there'll be tons of it in in Iberia, tons of it in UK and Ireland, but maybe not so much in Germany for whatever reason, right? And and the point is that they will choose those dials and the operating teams locally will be the ones that kind of move those those things around. I think in the UK, in so in the long term, I feel very, very confident about where we'll be. In the short term, it's interesting. I mean, in our in our history, for example, the pandemic, while it was terrible for for lots of reasons, became a bizarre accelerant of certain trends. Um, and for example, summer really went from being a bit of a language school and an Edinburgh thing to now almost every operation in the UK, it's not even questioned whether you do summer somewhere. You you just do, it's obvious. And right now, I think we're at the exact same point where people are thinking about that with the term time short stays thing. There's there's sort of a few people doing it, a few people doing it a lot quietly, some people doing a little loudly, but but there's a sort of an industry thing of like, is anyone really doing this? Not really sure, not really sure what's going on. But actually, I think in in quick order, um, I hope there won't be any kind of shock. But if if there is a sort of demand shock on the long stay side, then then obviously that will accelerate it. But I'd I'd really obviously for obvious reasons not like that, because I think nobody wants budgets and impact and people and all sorts of issues that come from that. But what I do think is the other version will happen, which is where the people who do this will perform better, they will very literally print better, better returns, and then they will either buy or start to evolve other portfolios because they will see the returns that they they make from that. That is a slower version of it, but it's almost like that's that's the default, default version. And we'll have to see see how that plays out. But again, if you if you can if you can essentially, because you've been uh uh sort of thoughtful about this and proactive about this, make a five, ten, fifteen percent higher noi on a on a on a building in Nottingham, why wouldn't you go buy another building and and add that value? It's sort of a sort of a no-brainer. Totally agree.

SPEAKER_01 41:18

I think on house, we're always talking about how the sector's changed, we can't always do what we've done before. And I think as we've mentioned, the sector can be really slow to react to that. Everything you said today, Fred, to me, seems no-brainer. It seems that it's easy to get involved, there's a market out there, we just need to market it. You know, you've got the systems in place that can do that. And we do know that systems traditionally have stopped people doing this, and I think actually, whilst it may not always be as smooth as it can be, there are solutions to that. So, really, I guess, just kind of to help summarise is what is it people need to do to actually start bedding this into their system and getting it rolled out and making actually this product that we know customers are asking for out there and available to students?

SPEAKER_02 42:07

Yeah, no, I mean it's it's a great question. I think it obviously sort of depending on on where one sits in an organization, I think the most important thing that you can do today is push either from a leadership perspective or you know, wherever you are in the org, to get a pilot in ASAP, ideally this term time, so you have some data available, or at the very least, right now, be asking the question September 1, September 2, whatever the day is that you go in, what are we doing about term time short stays today? Like how how are we gonna do that? Who's gonna do it? And generally speaking, when we work with our partners, there's almost the two most important things are you have a K you have a number in for your KPI on this. It at this stage it doesn't matter, just put something in because it will help galvanize. And almost actually the more the more simplistic, like we're gonna go for a hundred thousand revenue or we're gonna go for 10 beds, some round number that people can galvanize. There's a there's a human element to that. And then the other thing that is so important is if your organization doesn't have a champion around short stays, it will not happen. And what we we actually think that this is a cool thing because it's it's something that a sort of rising star, a a super smart like ops director, whatever, whatever, somewhere in the middle of your org, it shouldn't actually be C-suite because they're too busy and they'll move on. Um, someone who can kind of do this as a as a thing that they can then be really proud of and they can galvanize all the little strings around the business and manage the sort of you know the the any any issues are around the org internally and galvanize support rounds because generally to to the point you just making earlier, everybody kind of once you kind of talk through it, they're like, actually, this does kind of make sense. Why aren't we doing this? Somewhere between that or or you know, okay, it sounds good, but I don't quite have enough resources. So having someone who can pull the threads together, having a goal, and then most importantly, knowing um way before the summer what you're gonna do September will will set you up for success. And even I would say, even if it's not like quite in your wheelhouse, even If it's not quite in your value, you will be so much more proactive and thoughtful about this. And then, frankly, you know what? If you all your markets end up at 100% and you're 10% up and everyone's super happy, then great. But but at least you've prepared for every other situation. And more likely, you've got a really proactive plan. Um, you look very thoughtful as an org, and you will be able to monetize and offer this to students. And also, once you start doing that, other people galvanize around it. You'll get your marketing teams go, this is really interesting. What are we doing for the students? Your ops teams will go from I have to do this to what would be good to do this, and you kind of evolve it into that more thoughtful thing. So I guess what I'm trying to say is you don't have to go, we're gonna fundamentally re-architect our whole brand and resin detra tomorrow. You can do this with purpose to just um put into place a serious program quite quite quickly, and then you can think about that in relation to your strategy and your brand and your everything else. Systems is very solved. There are partners like ourselves who can solve all of that. It it really is more that internal push to take this seriously. Completely agree.

SPEAKER_03 45:01

Fred, this has been a brilliant conversation. Uh it's it's definitely one of the most useful 45 minutes that we've spent on this podcast in a very long time. So, yeah, really appreciate you being so so open with the data and the thinking.

Where To Find Levanda

SPEAKER_01 45:12

Yeah, it's been brilliant. I've really, really enjoyed it. And if you want to find out more about Levanda and what they're up to, all the details we will be in the show notes. Fred, where else can people find out what you're doing and more about you?

SPEAKER_02 45:26

Absolutely. So obviously, we we we have our website, we're uh we try and be active on LinkedIn, and we also have the Levanda Lens newsletter. So any any information. But you know, I would say this is quite a small industry. I mean, genuinely please just reach out to me on LinkedIn or on email and happily put put all that for up here. We're at events and and everything else, and we'd love to share and explain in any role that you're in, really, because I think it touches across the industry and would love to also hear feedback and thoughts and how we can improve and others can.

SPEAKER_03 45:55

Well, thank you so much for listening, everyone. Uh, if today's episode got you thinking, and we really hope it did, please do share it with someone else in the sector who needs to hear it. We will be back next week with more from the House Podcast team. Until then, thank you very much to Fred and the entire team at Levanda, and we'll see you all next week.