STR Global Unlocked with Simon Lehmann: Unfiltered knowledge for the short term rental industry

038: Short-Term Rentals Are Entering Their Most Dangerous Era | Shaun Shirazian

• Powered by AJL Atelier • Season 1 • Episode 38

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 58:07

In this episode of STR Global Unlocked, I speak with Shaun Shirazian, CEO of Lodgify, about one of the biggest shifts happening in short-term rentals and hospitality: the rise of AI search, direct bookings, and the future of guest experience.

Shaun shares what Lodgify is seeing across more than 30,000 hosts and 100,000 listings, why the short-term rental market has become more competitive, and why the old price advantage over hotels is disappearing. He explains why direct bookings are becoming more important, how hosts can reduce dependency on OTAs like Airbnb, Booking.com and Expedia, and why some operators are already seeing bookings come directly from ChatGPT.

Which questions are answered in this episode?

  1. How is AI changing the way travelers search for short-term rentals?
  2. Why are hosts already getting bookings from ChatGPT?
  3. Are direct bookings becoming more important for STR operators?
  4. What percentage of direct bookings is realistic for hosts today?
  5. Why is the short-term rental price advantage over hotels disappearing?
  6. What do the best operators understand that average hosts still miss?
  7. How can hosts reduce their dependency on Airbnb, Booking.com and Expedia?
  8. Why is guest experience becoming the real competitive advantage?
  9. What role will technology play in professionalizing short-term rental operations?

Resources

Stay connected:

SPEAKER_02

I've spent more than twenty years in the short-term rental and hospitality industry. I've seen companies grow, scale, sell, struggle, and completely reinvent themselves. But what is happening right now might be one of the biggest shifts this industry has ever faced. Today I'm joined by Sean Sharazian, CEO of Logify, a platform serving more than 30,000 customers and over 100,000 listings around the world. And that gives him a rare perspective on where the industry is really heading. We talked about why direct bookings are becoming more important, how AI search could change travel discovery, why many hosts are still too dependent on OTAs, and why guest experience might become the biggest competitive advantage in hospitality. So if you want to understand the future of short-term rentals, direct bookings, and hospitality technology, this episode is for you. And if you are building or scaling a hospitality business and want to understand what these shifts mean for you, you can book a consultation with me through the link in the description. Before we get started, a quick thank you to our sponsor, Pricelabs. Welcome back to STR Global Unlocked. I'm Simon Lehman, and today's guest is Sean Sherazian, CEO of Logify. He was harder to get than the PUP. Logify powers thousands of hospitality businesses globally and sits at the intersection of technology, distribution, direct bookings, AI, and the continued professionalization of short-term rentals. Before becoming CEO, Sean spent years helping scale technology businesses and marketplaces, giving him a unique perspective on how his hospitality is evolving and where operators need to adapt next. Sean, it's an awesome pleasure to have you on the show today.

SPEAKER_00

Thank you so much, Simon. It's great to be here.

SPEAKER_02

You know, sometimes it's interesting to have these shows. We should actually record the pre-recording because that will give a lot more away than our conversation here today. But it's been a great pleasure and awesome to have you here. We have a lot of things to talk about together. And before we kick this off, I want to uh start with a rapid fire. Are you up for it?

SPEAKER_00

Let's do it. Awesome.

SPEAKER_01

Most underrated hospitality company. Logify. One thing operators spend too much money on. Advertising. One thing operators don't spend enough money on. Most overrated hospitality buzzword Airbnb That's good.

SPEAKER_02

I like it. Airbnb booking dot com or Google who changes the most over the next five years.

SPEAKER_01

Are bookings become more important or less important?

SPEAKER_00

More important.

SPEAKER_01

One AI tool you use every day. One thing AI will never replace. Customer connection.

SPEAKER_02

What's one prediction you have for hospitality that would surprise most people?

SPEAKER_00

AI will be the new front door of travel search.

SPEAKER_02

Fantastic. You could have not answered this better. And you're one of my first guests on my podcast that have tried to keep the answer super short. That makes you already very welcome. So great to have you. So let's let's start with the obvious question. You stepped into the CEO role of a company already serving thousands of operators that are being totally underestimated in terms of size and everything else. Everybody talks about the guestes, the hostaways, all the big companies that raised a huge amount of capital, you know, showing up their listings and everything else. Logify hasn't done any of that. What did you see when you arrived?

SPEAKER_00

Absolutely. So it's interesting. When I first heard about Logify and the opportunity to take over from Dennis, who is our co-founder and previous CEO, I hadn't heard about the company. I didn't even know this category of software, property management software existed, even though I was a host on Airbnb years ago when I lived in San Diego, California. And as I looked into Logify, learned more about what they've been doing, I was just amazed because here was this company, a 13-year-old company that was based in Barcelona, but was one of the largest property management software players out there serving the needs of the long tail segment of STR operators, the independent hosts, the small-scale property managers. You know, we now have over 30,000 customers that have over 100,000 listings. We're all around the world. Oftentimes uh hosts hear about us, or you know, those in the industry think we're just a European company and just have customers here. We've got customers all around the world. Uh, and so when they hear about the size and the scale, as I did, it's just like, wow, this company has been flying under the radar and has so much potential. And so that was the thing that I just kind of kept on coming back to is the potential of the company, given where the industry was headed, given the capabilities that we had, the culture uh that Dennis and the team had created was just super special. Uh, and so I was just I was blown away.

SPEAKER_02

You couldn't have put that better. Are you speaking Catalan or Spanish already or none of b?

SPEAKER_00

You know, I'm speaking Portugal, which is uh a mixture of Portuguese and Spanish, Espanol, because I used to live in uh Brazil for a few years and my uh Brazilian Portuguese got really good. I used to know Spanish fairly well, but now kind of adjusting back is is difficult. So I'm one foot in the Portuguese, one foot in the Spanish. Uh Catalan is nowhere to be seen, unfortunately.

SPEAKER_02

Well, we're international business, right? Travel, that's what all connects us. So so let's go a little bit further. What assumptions did you have that turned out to be wrong when you took that role?

SPEAKER_00

Oh, yeah, it's a great question. Um one assumption I had was so I I have not worked in Travel Tech. This is the first role that I've had in Travel Tech. As I shared earlier, I've been a host, but on on that side of it. And so one of the assumptions I had was like, hey, there's gonna be uh a steep learning curve for me on understanding the industry, understanding the domain. Given I've come from the CRM space, and before that, uh finance and accounting with Intuit and Pipe Drive, respectively. Uh and so I was, I felt that that was gonna be a steep learning curve. But actually, as I've gotten into it, yes, there's things that I've needed to learn that are specific to travel tech, but ultimately ultimately the fundamentals of how I thought about product in those industries extend into this role as CEO at Logify in travel tech. Like the ultimate fundamentals on customer obsession, like how do you drive the most value to customers as quickly as possible? These things extend no matter which industry you're in. Uh, and so what I thought was gonna be a steeper learning curve ultimately was was not as I thought.

SPEAKER_02

Yeah, fair. So there's quite a lot of similarities in these online platforms as well. Um, and to scale those, you need to understand what the challenges are, obviously, of your customers as well, and how can you serve them best? In in that relation, what opportunities when he came in became obvious very quickly from where Logify was at the time.

SPEAKER_00

Yep, sure. One of the things that um, you know, had had made Logify so successful up until that point was, you know, we started um as a singular company focused on helping hosts set up a direct booking website. That was the only thing we did. And the origin story, the the reason for the name is we wanted to be the Shopify of direct booking. So hence Logify, so the Shopify of Lodging. And that was the only thing we did for a number of years. It wasn't until about midway through the company history that we started branching into helping our customers connect to multiple channels, starting to add the traditional property management software capabilities and these sorts of things. And that brought us tremendous growth, which was excellent. But one of the challenges as we pursued that growth was our focus was getting diluted. And so we went from doing this singular thing incredibly well for a number of years to that focus being diverted and doing a number of things, maybe not as well as we could have been doing. And so the biggest opportunity I saw as I joined the team here was go back to that focus. Go back to the focus on what makes Logify incredibly strong and differentiated in the space. And how do we double down on that and focus on that as much as possible as a company?

SPEAKER_02

Isn't it so funny, Sean? I mean, we're just breaking every rule of my podcast, not to a product pitch, but you guys have just been so much on the radar that I get enthusiastic about Logify myself to talk about everything else that you're experiencing. So uh I forgive my audience. Um, this is not a product pitch in any shape or form, but Logify is something that has uh you know fascinated me because it's such an obvious product, as you just alluded to from where you're coming from, and then going into multi-channel distribution, adding PMS uh solutions. And at the end of the day, let's not forget that still about 50% or more uh of our supply is individually managed as well, right? So following on from what you just said, Sean, uh and and the observations that you've made within the business, when you look across Logify's customer base today, what patterns stand out the most for you?

SPEAKER_00

Mm-hmm. Yep. So a couple to call out here. Number one, there's no question that it's become incredibly more competitive for our customers and and broadly across the industry for short-term rental hosts that are out there, right? Not only is there more competition, more saturation, especially in the urban areas, but then now there's the competition from hotels. I mean, it used to be as a traveler, like we I think we can all relate to this, that you would go search for short-term rental, and they were oftentimes significantly cheaper than the hotels. Now that's not, you know, that's not not necessarily the case anymore. Yeah. Um, and so the competition has increased significantly, which has put pressure on occupancy rates, which has put pressure on hosts to figure out how do they get more occupancy at the same time, not uh have this be a full-time job, because for a number of our customers, this isn't their full-time job. It's for uh, you know, passive income side gig for them. So that's the number one pattern that we see is become much more competitive, which has become making it challenging for them. Number two, there's still this huge desire and need for direct bookings. Uh, and this is where you know Logify started with and continues to be a key, key thing for us is that pattern remains even truer today, especially as hosts see the concentration and consolidation across the top three booking platforms with Airbnb and Verbo and Booking.com. There's there's even more of a desire to become independent and not become overly reliant and overly dependent on the top three OTAs. And so they're they're thinking about how can I do that? How can I do that even more than I have been doing in the past, especially as AI travel search is disrupting how travelers are searching? So it's like with that macro trend, with my desire to become uh be independent from the OTAs, how can I be front uh and center through that change? These would be the two big things that we're seeing.

SPEAKER_02

But that for you, that's challenging. I mean, that gets me so excited. My vacation rental heart is pounding at 180 right now. When you bring this up and to think about, you know, you want to be a direct set for the long term. At the same time, you want to be a channel manager for the long term, and you want to be a PMS and everything else around it. That must be so hard for Logify to stretch that because at the end of the day, you know, that's where you started. So originally Logify was there for anybody who needed a website can can go there. You you you alluded to that when Danny started, and literally halfway through the evolution of the business, now you're a multi-channel distribution. All your inventory, and I think correct me here if I'm wrong, all the inventory that you have is unique inventory, right? So they use Logify as the primary technology platform. At the same time, you give them access to all the third-party distribution channels, but you want them to drive direct bookings. Can you elaborate on that a little bit more?

SPEAKER_00

You know, it's it's a um it's similar to like an orchestra where like the different instruments play a role in making the music. And so oftentimes what we see is the OTAs are an incredible source of initial bookings for our customers. You know, a number of our customers and hosts that come to Logify are new hosts that are just getting started in short-term rentals. And so getting their first booking is incredibly important. And OTAs, given the demand that they generate today, are great initial surge in bookings for them. Now, the role that direct bookings can play and are playing right now for a number of our hosts is that that follow-through, that repeat booking. So, how can our hosts leverage the initial bookings that they're getting from the OTAs? And then as a follow-on, use their direct booking channel as a way to bring the guests back the next time, saving money on commissions and starting to build those guest relationships. So the the two play a role uh and both are important, especially for the hosts that are getting started.

SPEAKER_02

That's a great segue to ask you the question: what separates the best operators from everyone else that is using your platform? I'd love to hear that because obviously they're coming in early stage, and then they have an evolution in terms of listing counts and you know, professionalized and everything else.

SPEAKER_00

Yeah, and the thing that I I see is as we look at some of our top-performing hosts, um, one of the things that they have in common is, and I and I relate this to my product days. You have to ask yourself, if you're a host, what's your product, right? What is the product that you're selling? And ultimately, it's the guest experience that you deliver to the guests that are staying at your place. And yes, part of that is the price you charge, part of that is the number of bedrooms and the amenities, but those are commodities, right? Those are kind of commodity things. Ultimately, what you're delivering is a guest experience. And that starts from the moment that a potential guest interacts with you through to the moment they check out and leave you their review. And if you think about that as that that is this the experience that you're delivering, how do I ensure that that is a phenomenal guest experience from start to finish? If you obsess about that, then ultimately you will deliver a five-star guest experience that will drive word of mouth and that will drive repeat visitors to your to your to your property. And so this is the most important thing that I see the top-performing hosts do incredibly well. Is yes, you can get lost in the operations, you can get lost at like, am I optimizing price? Am I optimizing my inventory and all these sorts of things? But at the end of the day, if the guest experience is crappy, all of that doesn't matter. It doesn't matter any of that, right? And so that's the most important thing that I see them focus and obsess about.

SPEAKER_02

I want to go a little bit deeper here. Just thinking about 100,000 plus units, average size of properties, two bedrooms, that makes us 400,000 beds. You are a serious hospitality business here, right? 400,000 beds. I had a uh keynote at uh first time in 20 years at the hotel summit in Switzerland, um, talking about STR. Isn't that funny? But people just underestimate our industry, and we can be proud of what we've built because the hotels just still love us like we're second-hand car dealers or uh tapperware parties. But we're we're far beyond that. So I want to ask you what's happening in the industry right now that most people with your visibility aren't talking about.

SPEAKER_00

I I think this this merging of uh hotels and short-term rentals, as you know, as Expedia and Booking.com have been doing for a number of years now, but Airbnb coming into the game now throws some serious weight into it, uh, is is a big deal, right? Is a big deal because ultimately travelers and guests have a ton of options now when it comes to where they're gonna stay. Yeah. And these options are surfacing uh on the biggest marketplaces that are out there. Um and so this is gonna amplify the competition for short-term rental hosts. This is gonna put a strain on occupancy, it's gonna put a strain on how do I deliver uh even more bookings given this macro trend that's happening. And so, you know, if you're faced with that, I think the it goes back to how do you stand out in a crowded market? And this is where my point on the guest experience goes is is so important, right? Like thinking about how you're gonna deliver an optimal, amazing guest experience is critically important. And and any of us that that are many of us are in competitive spaces. Logify is in a very competitive space of property management software. Our hosts are in very competitive spaces with short-term rental markets. So if you think about like how do you stand out in a competitive space, you stand out by being clear on who your target customer is, who's your target guest that you want staying at your place. And then from that decision, everything follows. What is the price point that you should be charging at? What is the guest experience that I want to deliver for that audience that I'm targeting? Everything flows from that. And so if you're super clear on the target audience that you want to go for and ultimately how you're going to stand out relative to your competition, this allows you to have a differentiated perspective on the market.

SPEAKER_02

That just brings me to one thought. What do you think about the recent announcement between the collaboration uh between Uber and Expedia in that sense? I mean, it's interesting to see, and you mentioned TOTAs as well and how they're evolving right now, also with that product offering and everything else. And now Airbnb is doubling down on hotels. I mean, they bought hotels tonight a long while ago, and now it's it's becoming another push for it as well. And Expedia has taken a different strategic positioning also towards more the B2B relationships and bringing that supply out. And now Uber comes in, and booking.com still drives this massive direct distribution approach at the same time and this this this this integrated travel experience or booking experience. How do you what was your thoughts when when an Uber and Xpedia announcement came out that they're working closer together in that context?

SPEAKER_00

Yeah, I think it makes a lot of sense for them, right? I think the um a number of of the marketplaces, right, are are looking to be these go-to platforms for anything related to travel and anything related to services in some extent now with with where Airbnb is headed. So I think it makes a lot of sense for them to partner with one of the largest players when it comes to ride sharing and as a way to speed to market, as a way to kind of high have a high quality uh partner that's providing that. So I think it's a really smart. Move on their part.

SPEAKER_02

So following on from that, Sean, and going back to the customer of Logify as well, uh, more on a granular basis, what, in your opinion, what do the best operators understand that the average operators still don't get at all?

SPEAKER_00

Yep. I think one of the things that they get is the fact that technology can help them become better operators. So it can help them drive more bookings, it can help them drive higher revenue, it can help them have more peace of mind by having technology support what they're doing end-to-end, right? And that's why they're they're using software like Logify to do that. The second thing is the importance of direct bookings. Now, part of this is yes, for them to help them become more independent from the OTAs and to drive higher revenue from the bookings that they're getting. But the other uh role that the direct booking site helps them with is just to look professional, right? If I'm finding your listing on one of the OTA platforms, and then I see that you also have a direct booking site, am I able to go and see more pictures or see more reviews or learn about you as a host, that just allows me to trust you even more as a potential uh guest at your property. And so that's uh incredibly important. So, one, they realize the power of technology and supporting their operations and driving the outcomes they care most about. And then two, uh, the importance of direct bookings in in helping their overall outcomes increase as well.

SPEAKER_02

Well, Sean, you could be the moderator yourself, because that's what I just wanted to touch on in terms of the direct bookings. And that's, you know, at the end of the day, let's talk about one of the hospitality's favorite topics in all respect. And to be perfectly honest, as a coming out on this podcast myself as a as a as a host is, you know, I didn't really believe in it. I made a statement many moons back where, you know, Expedia, Home Away, Booking.com, TripAdvisor combined spent like 22 billion on Google, right? So I was always like, oh my God, this is never ever like anybody who talks about direct booking. I said, invest your money into, you know, branding your bedlinen, branding your property, you know, make the people remember where people after they stayed, because you have more touch points while the people you're actually in the property. Because when I became CEO of Interhome in 2005, we did a market survey with our customers, and 80% of our customers didn't remember who they stayed with. I mean, back to that point. So now I think with everything that has happened, where the market has the funnel has consolidated, everything has consolidated, and now AI comes into the game. And, you know, just to remember the audience as well that Sean and I have managed 25 minutes not to talk about AI, which is quite impressive at the same time. And I'm sure we'll get there. Let's talk about direct booking. So everybody wants them. Um, very few seem to achieve them at a meaningful scale. Why?

SPEAKER_00

I think, you know, it definitely was the case in the old way of search, but I think this is dramatically going to be transformed in the new way of search, right? If I if I just think about today how I search, like I've got two young girls, we're a family of four. We went to Milan a couple months ago. I was looking for a short-term rental to stay at. You know, I'm searching. We're a family of four. We want to stay in the city center, we want to be close to family-friendly restaurants, we want to be close to playgrounds. Like, show me what my options are. This was the uh, you know, what I was looking for. And so the LLMs and how AI search is happening today allows you to provide such rich context and expression in what you're looking for as a guest, and allows you to match that to the inventory that's available, unlike traditional search was able to in the past. And so I think the dynamics of search and matching demand and supply are fundamentally changing that will allow uh customers and hosts that want to get more direct bookings to be found. Now, what's super important for them in that world is one, that they have a, as I said before, a unique view on who they're going after, what's the experience that they're driving, and that their their site is optimized for AI search, which is one of the things that you know we do at Logify. But ultimately, I think looking at the past few years and saying, like, hey, it hasn't driven much direct bookings. I think things are going to change dramatically, and we're already seeing that. You know, we've had a couple of customers actually this week, we have a channel that all the customer feedback comes in through. I I, along with the team, look at it. A number of customers this week, it and it's this is now kind of becoming a trend. We're seeing more and more of this, are like shouting, I got my first booking from ChatGBT. And this is happening, right? And it's gonna happen very fast, right? Exactly. Exactly.

SPEAKER_02

So maybe sounds a bit obsolete, but what are the operators getting wrong today, Sean? I mean, it's such a great segue that you just alluded to, and we're seeing that. I mean, you know, what whatever we thought was hype three months ago in AI is is already dead wood, right? So things are happening super fast. But when you think about your customers, and we're still talking about the direct bookings, what are they getting wrong? Or where let's call it the different way, where can they get better at capturing that opportunity, what you as a platform cannot provide? So let's talk about the operator.

SPEAKER_00

Yeah. I think at the end of the day, the most important thing that the operator, the host, the owner needs to ensure is that the guest experience is an incredible experience. Because ultimately, if that's not the case, it doesn't matter how much traffic is going to your site because ultimately they won't come back or they won't tell family and friends. And so the product, in this case, the guest experience needs to be exceptional. And so you got to start from that and then work backwards from that to talk about traffic and conversion, these sorts of things. And so as an operator, as a host, and this is outside of our control, we try to help our host with this, but it's like, is my guest experience end-to-end as exceptional as it could be? You know, Brian Chesky from Airbnb, they're famous for saying that the 11 star experience. Like, is it a 11-star experience that you're providing? And if not, how can you ensure that is? And then once it's in that spot, then you can start to work backwards to say, okay, the product, my guest experience that I'm delivering is 11 star. How do I now think about is my website optimized for AI search? Am I thinking about pricing the right way? Am I thinking about, you know, SEO and these sorts of things? And these are areas where you don't have to be experts. Software like Logify, you know, can can help you in those, in those areas. So, but I would start with the guest experience and work backwards from that.

SPEAKER_02

So, following from that, um, Sean, let's talk about metrics. You know, we just talked about direct bookings, what can they do better? And and we're seeing LLM bookings already, as you said, chat GPT bookings are coming in and things like that. But let's talk about the metric in itself. In in your in your viewpoint, with all the thousands of properties that you guys are looking after, what percentage of direct booking in today's current environment is realistic, or is that not an adequate question when we talk about, you know, the OTA distribution and the third-party channels at the same time?

SPEAKER_00

Yeah. I think, you know, one initial goal that you can shoot for is 20 to 30%, right? Starting out, having 20 to 30% of your bookings be direct. Now, I know depending on your location and depending on how uh much uh it is a location where repeat travelers come on a frequent basis, like a ski resort and these these sorts of things, then you can shoot much higher than that, right? If it if it is a location and a property where repeat bookings are are common, then shoot higher, like 50%. Um, yeah, we have many, many of our customers that are 75% direct bookings, but it's taking some time. But I think an initial goal is shooting for is 20 to 30 percent.

SPEAKER_02

So when you say it's taking time, that's an interesting conversation. You know, we in the industry at large, when people talk about OTAs, dependencies and OTAs and direct bookings, talk about a potential lead gen uh lead gen funnel as well to get lead gen through OTAs, uh, converting them in into direct business at the same time as well. So, how should operators think about OTAs versus direct channel and what can they do to expand that ultimately?

SPEAKER_00

Yeah. I think it's it's similar to the point I shared earlier as far as this one-two punch, right? They both play a role in your overall bookings, OTAs being an incredible source of first-time bookings for you as a host, as an operator, and then your direct channel being a great follow-on for repeat visits and repeat um guests to come back and book direct. And so I think they both both play a role in helping you do that.

SPEAKER_02

If you're serious about maximizing revenue from your short-term rentals, price lapse is one of the most powerful tools. So when you alluded to some of very large percentages on direct booking, like have direct businesses, what are they doing differently than the ones who are still relying on more uh um third-party distribution?

SPEAKER_00

Number one, they're they they deliver an incredible guest experience and then that's it sets them apart. Number two, they're really good about staying in contact with guests that have stayed with them, you know, reaching out to them in the future, offering discounts, um, you know, suggesting to come back for whether it's an event that's in the in the city or what that what that uh what that might be. Uh, and so these are a couple of things that they just do do a great job of of doing. But ultimately, that number one point, I know I keep on harping it, but the delivering exceptional guest experience will not only drive the likelihood of that guest to come back, but it'll drive the likelihood of that guest to tell their friends and family about that place as well.

SPEAKER_02

No, I look, I I love that the fact that you're pounding on that. I mean, maybe one day we need to find a different um wording for guest experience, but I haven't thought about that yet. But you're right. I mean, ultimately that's what it's about. I mean, let us also not forget, Sean, how many hotel customers have we converted to our industry, also post-COVID. I mean, that is just massive. And now we have to deal with different guest experiences. We have to deal with uh, sorry, guest expectations. And and before, you know, the people who rented easygoing, whatever, now everybody rents versus uh also uses hotels. So therefore, the expectations have changed dramatically. And therefore, it comes down to the guest experience. And and you want to have a good experience staying in a hotel or a short-term rental, and that pushes us as an industry, which I like the most, to professionalize more and more as we as we as we go along. And platforms like you, yours, and and many others can help professionalize this interesting. That's why we're here and getting up every every day, right? So now we've really managed more than half an hour not to talk about AI, but it's gonna have to happen uh because you know, the next generation of hospitality and and AI, there's hardly any conference anymore where where we're not talking about it and we see how it's changing um on a day-to-day basis. But I still want to ask you, especially while you're um so conscious about the guest experience, how much of what we're hearing is hype and where is this heading in your viewpoint?

SPEAKER_00

Yep. So I'll definitely touch on that. I want to I want to uh uh piggyback on one thing you just brought up, which is an excellent uh point, right? On the um guest experience and how STRs, especially after COVID, were able to get so many hotel travelers into the SDRs. I I think one of the challenges our industry faces right now is that we are becoming or have become too commoditized and too professionalized. And I'll share an analogy here, which was um I heard this the other day around uh uh, you know, somebody went to a steak restaurant in Silicon Valley, they tasted the steak, and immediately was like, oh, I can tell that this restaurant chain has just been bought by private equity. But you could taste that in the steak because they have like professionalized the restaurant, they've like minimized costs, they've made it like an assembly line of things. So the craft, the the thing that made that restaurant special went away. And I think one of the things that was amazing about the SCR space in the earlier days was this uniqueness that you had stepping into somebody's home, the way they made it feel so bespoke to their lives, and you were having a glimpse into that. What we've seen through the boom post-COVID is that it's become very uh commoditized. It's become very factory-like. You can you step into a short-term rental now, you you know if it's uh a host that has a hundred properties or if it's a host that has one by they've got IKEA plates, nothing against IKEA, or the or it's like the customer. Yeah, you know, these sorts of things. And so I think one of the challenges now is that that experience that was unique, that was special about short-term rentals has been eroded away a bit. And we need to get it back. And that's why I think this point on the guest experience is so important to kind of get back to delivering that because ultimately that advantage that we did have versus hotels has been eroded away. The price advantage that we had versus hotels has been eroded away. And thus the competition from hotels now is even greater than what we've ever experienced as an industry. So now kind of like tying, oh, sorry, did you want to um No, no, go for it. Okay. Okay. So now tying this to your point on AI, right? How we think about AI and and ultimately where I see the biggest opportunities, we always, um, and this is not going to be a surprise, approach this like customer back. And so as we think about the outcomes that our customers care the most about occupancy rate, revenue, the time that they're spending managing their rental. These are the top three. In each one of these spaces, we know what are the biggest areas that AI can drive bigger outcomes for them in those areas. And so we are looking at delivering and have delivered innovation in each one of those areas to help do that. So, for example, when it comes to the time managing the rental, one of the biggest areas that we're seeing AI help host today is in this space, right? Whether it is the messaging communication back and forth with guests, whether this is thinking about how I should think about pricing, whether this is helping me understand how my rental is performing. And so this is one of the biggest idea. This is one of the biggest areas that we see AI being able to benefit our hosts. And so this is the example where we're delivering our AI co-hosts, is helping our our customers and hosts in this area. Um so that's just one example. But across each one of those outcome areas that our customers care the most about, there's a ton of opportunity where AI is having a significant impact.

SPEAKER_02

Well, you've answered about my next five questions already. That's amazing. But one thing that you answered already is that Logify is going for an IPO instead of a private equity gig. So um that that was a good segue. Thank you, for sure. We'll take that to the bank. Um, but I mean, you look, our industry is under is under a lot of attention, and we've seen some big deals, and and I I like the analogy of the private equity play as well. And then ultimately, what is what is the next step? And and we as an industry need to be thoughtful about that uh as well. And then also our communities, because they're being large, while we're sitting in such an incredibly um uh fragmented market, we have a lot of stakeholders to work with at the same time. And and I love the way you're coming straight back down to the you know, to the core layer who delivers the experience. And I've I've made some statements, you know, the CEO of one of the largest uh OTAs has probably never cleaned a toilet in the in his life, right? And and and but the the operators need to do that to deliver that guest experience at the same time, and you need to value that. And that's exactly where we as an industry and you as a technology provider need to help. So you already touched on the points, you know, adoption in terms of guest communication, marketing, content creation, revenue management. There's so many different pieces that you as a service provider can take care of so they can bring the best guest experience to the table. And I think for AI, for us as an industry who love the hospitality, it's so refreshing because that's what we can concentrate on, right?

SPEAKER_00

Yeah, absolutely. You know, one of the one of the stats that we we look at is the tenure of short-term rental host. So once you start becoming a host, how long do you last, right? What's the survival rate of of a host? Oh, I'd love to see that data. Yeah, and and and and it's roughly 50% after two years bailout. And wow. Yeah. And this is due to a number of reasons, right? Um, whether they decide, hey, I'm gonna do long-term renting or hey, the the the pain of of renting and hosting is not worth it because it's become so competitive. And one of our theses is the managing of the rental has overcome the love and passion for why they got into it for the first time, for the first place, right? And so our our vision is all about how do we make hosting effortless so that there's less to manage and more to love, and ultimately get that equation in much better balance because this is what's driving the tenure for being being so short.

SPEAKER_02

That's a good line for your board meetings, Sean. You can just walk in and say, hey, the board member asks, what's your chart? It's like, well, two years to give up because it's too hard, right? So that's an interesting metric. But I mean, this is the first time in 20 years I'm hearing that number. I'm getting so excited. Like, and and that's it's an honest feedback. And I think that's what people also coming into this game need to realize. And they're using the right technology, the right platforms, everything is out there to serve these hosts, to deliver the best possible product. But people also need to understand what they're getting sales into. And one thing I don't want to scare anybody off in terms of our audience, but they also need to realize that, you know, just renting out an apartment, that's hard yards because the entry barrier to coming to the short-term rental industry is so low. And that's the reason why we need to professionalize this industry. Because the better we can do that, the better guest experience we will deliver, the better standards we'll deliver, and people have a good experience coming back and back into the rental business. And we're all forced as providers in this industry to help professionalize this industry.

SPEAKER_00

Yep, absolutely. And and just to clarify that point, that stat on the tenure isn't specific to Logify. This is kind of across across the city. Yeah, no, absolutely. I get you.

SPEAKER_02

Yeah, of course. But that's and that doesn't surprise me at all. But it's, you know, we because we know how hard it is. It's easy to get your grandmother's, your auntie's house, start renting it out, and you're in the game, and then you realize what it means at two o'clock in the morning to answer phone calls because the toilet is blocked, and this and that, and the other. So let's talk about distribution in an AI world. I mean, that's would you personally? I think AI disrupts distribution before it disrupts operation more than ever before. Would you agree to that? 100%. Yes. So historically, consumer searched, increasingly consumer asked. How important is that shift now? That shift in how people search and now we can ask. I mean, having a conversational search is something we talked about for years. We thought voice is gonna change travel search, has never had an impact at all, right? And then now all of a sudden uh we've seen the evolution of the OTA. And and Google and everything else. And now all of a sudden we're in an area where conversational search is changing that.

SPEAKER_00

Mm-hmm. Absolutely. No, this is huge. I think this is massive. And again, as I as I shared earlier, I think this is a massive benefit for hosts that are looking for direct bookings because the walled gardens of the OTAs that once existed are being threatened by this new way of search. And it used to be that to get good at SEO took a lot of time and it took a lot of money and it took a lot of expertise. That is also being disrupted significantly as well. And so the not only on the the way the guests are searching is changing, but the ability for a host in the middle of uh you know the world to show up in that search is significantly easier than it was before, especially if it's you know a nice fit for the to what the traveler's looking for.

SPEAKER_02

So what does that mean for Google and OTAs in your perspective?

SPEAKER_00

Yeah, I think it's um it's an interesting one as far as where things will play out. You know, we've seen some of the OTAs partner with um the LLMs, especially with uh, you know, booking and uh expedia with with open AI. We've seen Airbnb uh kind of hold out for now on that and and keeping their inventory walled off to the LLMs, which is interesting. Um so and and Google is is now starting to dabble into these verticals with with AI and Gemini. Who knows, right? I I think this is go a number of directions. I think this will put pressure on the OTAs, uh, the ones that have it at least to expose their inventory to the LLMs, because ultimately, if they don't, then I think uh the ones that are exposing their inventory to the LMs will benefit from it and they'll get the share of the gross booking volume, and those that aren't won't. Um as far as Google, I think you know, Google is learning on um what they've done in the past and in travel. I think, and given all the other things that they got going on, I think this will be maybe a lower priority or distraction for them, and so they won't be focusing as much as they tried a few years ago. Um, but who knows? I think uh it won't be.

SPEAKER_02

Yeah, I would I would definitely agree with you, Sean, there and schooling, also special on the Google side. And without a doubt, I mean I had Glenn Fogel on the show. They're not gonna give that up without a fight and have their right relationships. And and also Sean Stewart, the former head of Airbnb Homes, was on our show and and and he alluded to that uh very directly while he's not uh entirely in the space himself anymore. Um and and then at the end of the day, it's it's about who controls that inventory um as well, and and then coming back to how Airbnb plays this right now. And I think it's still early days to see how this is happening, but at the same time, all the operators and and every host out there just tries to be found uh in different matters as well. And I think that's still I heard numbers like 3%, 2% uh on LLMs uh, you know, using like being considered as a channel, so it's still small. But I think when we see the evolution and the category of AI, this is gonna happen extremely fast. And I think also you internally will hear a lot more hosts who said, Hey, I've just got a booking uh off of new channels that we haven't even thought about. Let's talk about the future of hospitality before we just wrap wrap this up in terms of technology. So you spend, and one thing that intrigues me a lot, Sean, is that you spend so much time of your career building and scaling technology business. Let's talk about his hospitality take. And you said at the beginning, you know, that's not something uh I was used to in the past, and and I would love to know what the modern hospitality technology stack looks like today? Because we've seen so much evolution, you know, coming from, you know, agent GDSs all the way up into, you know, now uh basically um agentic AI run PMSs. What is that gonna look like?

SPEAKER_00

I I think there's um gonna continue to be uh a fragmented tech stack. Now, you know, one of the challenges in the past with the fragmented tech stack was data consistency, data uniformity, um, being able to have a source of truth. I think, you know, given how good the AI tools are and how good the technology is becoming, I think that will be less of an issue. Um and and and and kind of hosts and operators uh are gonna be reluctant to be locked into any one vendor, and they'll be okay with this fragmented tech stack that they have. And I think one of the big differences in the future fragmented tech stack than the maybe the previous one or versions of it is that part of that tech stack will include bespoke homegrown solutions that the host or operator have created themselves, right? Like one of the amazing things that we're all experiencing now is that we are now all builders, right? We are all now playing in our favorite AI tool, building our own little side project uh to solve for a use case and a need that is so specific to us that no one company will ever solve for. So I think this is where you know these bespoke uh solutions that you are building yourself as a host and operator will plug into some of the other um tools that are important, kind of system of record type tools that won't get disrupted, but we'll have these other tools plugging into. So I think it will be fragmented. I think it'll be a combination of homegrown plus still, you know, off-the-shelf technology solutions that are out there, but are more customizable and flexible than they have been in the past.

SPEAKER_02

Well, I'm sure there's many vendors out there who will use your quote in their pictures many years to come, but I like it. And uh yeah, I mean, at the end of the day, the fundamentals of our industry, I think one thing that you and I probably totally agree together on is that the fragmentation of STR is going to continue being the same way. At the end of the day, we build our business-on relationships, they're hard to scale, we don't own the assets, so we can't manage the we manage the assets of somebody else. And therefore, the supply in terms of tech is going to be maintained to be pretty fragmented as well. And I would definitely support that and and and agree with you on there. Now, looking at the time, I you know, I want to talk to you quickly about the future of hospitality. So if we look fast forward 2030, what does hospitality look like in where you're sitting today, especially in terms of supply, maybe?

SPEAKER_00

I I think the um in in 2030, I think the as we've talked about, the how travel search uh uh will be happening uh obviously will be significantly amplified from what we're seeing today. And so supply, uh like the the abundance of supply and the ability for that to surface up in AI search is going to be radically changed. And so I think this front door of travel changes significantly. I think that allows supply that was maybe hidden behind the wall gardens of the OTAs gets exposed in new and different ways. It provides opportunities for the direct booking sites to be surfaced and exposed more so than they have before. Um, and so I think that's the the biggest thing is the the matching of demand and supply can happen in an enhanced way that hasn't been able to happen before. Because if you think about it today, how we search the dates I'm traveling, the location, the number of bedrooms, these are again all commodity type things. Yeah. But what I'm really looking for is I want a modern apartment that's family friendly, that's near these sorts, like that's what I'm looking for. And in 2030, I can ex I can do that today. I can express that today as the demand side of this. And as the technology gets better and better, matching that demand to the supply that is the best fit for what I'm looking for is going to be magical, right? And today, it's really hard to get that. Um, you're starting, obviously, you can search for that, these sorts of things on the LM side, but the supply side is still not there as far as being able to match the demand signals to the inventory in a in a way that is uh you know a really kind of uh a nice fit. And I think by 2030, we definitely should be there.

SPEAKER_02

How does the human capital fit into that by 2030 when you talk about hospitality?

SPEAKER_00

Human capital as far as the interaction, touch points, like where's the traveler and the human interaction point?

SPEAKER_02

You know, now we're trying to create efficiencies, we're trying to make our process as efficient as possible, communication, everything else. And but the human aspect in hospitality will never go away. Is it becoming more important in the future as well?

SPEAKER_00

I I think this desire for connection will continue to accelerate. I think as as all of all of us are playing around and seeing the benefits of the technology and AI and where it's headed, which is amazing, um, it can be isolating as well, right? And so I think that that desire for human connection, which is so fundamental in our in our DNA, is going to be there. And the the hope is, right, that the technology, again, going back to the point, the technology will help automate and and take away the managing, the managing of the rentals so that the host can interact with the guests. The host can uh be there for the check-in and interact with the the guests in a way that they can't do today for a number of reasons.

SPEAKER_02

Absolutely. Bringing a bottle of Gianti and some good Italian cheese or whatever it might be just changes the stay fundamentally, right? So before I let you go, final question for you. Uh Sean, what's one belief you hold about the future of hospitality that most people listening today would disagree with?

SPEAKER_00

Hmm, interesting. I I I think the uh belief that I, you know, hold on to, and who knows if if folks agree or disagree at this point, but uh it it comes from a a quote uh that has resonated with me for years from Jeff Bezos, where he said, you know, there's always a lot of talk on what's changing, but there's very little talk on what's not changing. And ultimately, if you focus on what's not changing, that's what's durable. Those are the things that uh you can build durable businesses around, you can build durable kind of customer love around. And for me, my fundamental belief is what's not changing for hosts and hospitality in the next 10 years is the same as the last 100 years, right? Guests are gonna want an incredible experience, guests are gonna want the best rate, guests are gonna want, you know, flexibility and these sorts of things. The hosts are gonna want the same things that they wanted 10 years ago as they will want in 10 years. And so those by focusing on what's not changing is actually the more important thing than focusing on what is changing. Fantastic.

SPEAKER_02

I love that show. And let's focus on what is not changing, then what is changing. And let's let us finish with that. It was an incredible uh show to have you here and sharing your wisdom and your experiences with us, being in the role only for 12 months. You know, if you haven't been around the block for 20 years, you're still an outsider, so keep it that way. And uh, you know, we love the short-term rental as it is. Uh, it was great to have you on the show today. I'm Simon Lehman. Uh you listened to SR Global Unlock. I'm looking forward to seeing you on the next show. Until then, Sean, wishing all the best with Logify and all the adventures within the industry. And it was great to have you today.

SPEAKER_00

Thank you so much, Simon.

SPEAKER_02

My biggest takeaway from this conversation is this hospitality is entering a new era. But the businesses that will win not be the ones chasing every new tool. They will be the ones who understand what technology is actually there to protect the guest experience, AI search, direct bookings, automation, and distribution will reshape the industry. But at the end of the day, guests still remember how you made them feel. And that is where the real advantage lies. And if you want to go deeper into the business side of the shift, I highly recommend watching my episode with Julie Brinkman, the CEO of Beyond. We talked about revenue management, profitability, market dynamics, and why operators need to become much more strategic about the numbers behind their business. Click on it now.