STR Global Unlocked with Simon Lehmann
Simon Lehmann talks to the people running short-term rental at scale.
Operators, platform CEOs and investors, on the decisions that separate
businesses that scale from ones that plateau.
No panel-discussion politeness and no vendor pitches. Guests have included
the co-founder of Vacasa, the president and CEO of Booking Holdings, and the
founder of Holidu. The conversations go where the operating problems actually
are: unit economics, distribution, AI, capital, and what breaks when you grow.
Simon is a former CEO of Interhome, co-founder and chairman of Vacasa Europe,
past president of Phocuswright, and sat on the HomeAway board before the IPO.
He now advises operators, investors and hospitality technology vendors.
New episodes every Tuesday.
simonlehmann.net
STR Global Unlocked with Simon Lehmann
043: Why Big Property Managers Should Be Worried | Jannik Abraham
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Book a strategic consultation with me now: https://bit.ly/simon-consultation
Small hosts are becoming more professional, technology is getting more powerful, and guest expectations are rising fast. But what does this shift mean for the future of short-term rentals?
In this episode of STR Global Unlocked, i speak with Jannik Abraham about why the next generation of successful STR operators will not necessarily be the biggest - but the ones that understand their business, master the basics and use technology intelligently.
We discuss why scaling to more units is not always the right goal, how small hosts can now compete with professional property managers, why PMS platforms are evolving into operating systems, and where AI and automation can actually create value.
Questions answered in this episode:
- What separates a casual host from a professional STR operator?
- Why is scaling to more units not always the right goal?
- Can small hosts really compete with large property managers?
- How much should STR operators rely on Airbnb and other OTAs?
- When does multi-channel distribution actually make sense?
- How are PMS platforms evolving into operating systems?
- Where can AI and automation create the most value in hospitality?
- What parts of the guest journey should never be automated?
Resources
- AJL Atelier – Global STR Consulting [https://www.ajlatelier.com]. Led by our host Simon Lehmann, AJL Atelier is a boutique advisory firm helping professional hosts, property managers, and investors succeed in the short-term rental industry.
- Connect with Simon Lehmann on LinkedIn [https://www.linkedin.com/in/simon-lehmann-8375753b/]
Stay connected:
- Apple Podcasts: https://podcasts.apple.com/us/podcast/str-global-unlocked-with-simon-lehmann-unfiltered/id1842946960
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The short term industry is not just becoming more professional at the top, it's becoming more professional from the bottom up. Independent hosts, small operators and entrepreneurs with only a few units now have access to tools, data, automation and distribution systems that used to be reserved for large property managers. But that raises a bigger question. If small hosts can operate like professionals, what does that do to the entire industry? In this episode, I'm joined by Yannick Abraham, general manager of Smoke, part of the Home2Go group and one of Europe's leading property management systems for independent hosts and growing operators. We talk about the rise of the professional small host, why growth is often misunderstood, why operators need to master the boring basics first, how PMS platforms are becoming operating systems and why hospitality still cannot be fully automated. And if this conversation makes you think about how to professionalize your own operation, improve your distribution, and build a stronger hospitality business, you can book a consultation with me through the link in the description. Before we begin, a quick thank you to Breezeway for supporting STR Global Unlocked. Breezeway helps short-term rental operators streamline property care, inspections, and operational workflows to deliver safer, higher quality guest experiences. We appreciate their support in advancing operational excellence across the short-term rental industry. Welcome back to STR Global Unlocked. I'm Simon Lehman, your host of the podcast where we speak with the founders, CEOs, and investors shaping the future of hospitality, travel, and short-term rentals. If you are enjoying these conversations, please subscribe on YouTube, follow us on Spotify or Apple Podcasts, and if this episode adds value, leave us a review. It helps us bring even more world-class guests to the show. Today's guest is Yannick Abraham, general manager of Smoobu out of Berlin, one of Europe's leading property management systems, serving thousands of independent hosts and professional operators. Smoobu occupies a fascinating position in our industry, unlike many enterprise platforms that have built their business around the long tail of supply. Individual hosts, growing operators, and entrepreneurs building hospitality business from the ground up. More recently, Smoobu became part of the Home2Go group, placing it at a center of one of the industry's most interesting technology system. Today, we explore how property management software is evolving, what AI is really changing inside hospitality businesses, whether independent hosts is disappearing, and what the next generation of professional operators look like. Yannick, it's a great pleasure to have you on the show.
SPEAKER_00Thanks for having me. I'm very excited to be here.
SPEAKER_01Fantastic. And Smooby is still being recognized as a separate business in itself towards that host. Before we kick this off, Yannick, I want to do a rapid fire with you. Are you ready for that? Have at it. A few quick ones before we go deep. What is the one number you wish you had watched earlier?
SPEAKER_03For myself? For the business. For for the business. Involuntary churn.
SPEAKER_00Meaning churn that we kick out because of non-payments or payment failures or something like this.
SPEAKER_01What should an operator at 50 units stop doing immediately?
SPEAKER_00Think about adding too many units without having the basics right.
SPEAKER_02The last tool you killed and why?
SPEAKER_03That's a good question. I killed my Calendly and uh I I'm using the Google feature now.
SPEAKER_02One decision that felt small and turned out to be everything.
SPEAKER_03We've started with an ambassador program a year back, and that is fun and is also successful for us.
SPEAKER_01Finish this sentence.
SPEAKER_03Most operators think they have a growth problem, but they actually have uh a potentially wrong understanding of the the basics and the boring stuff in the business.
SPEAKER_01Fantastic. Couldn't agree with you more. I mean, that's why we're still here and talking about those to help operators scale and and make their businesses more successful. But we as you said earlier, we need to get the basics right. And I think that's absolutely fundamental. So, Yannick, before we get into the technology, let's set the ground here a little bit for our audience. Smoobu serves operator at every stage. When you look at the ones running 20 units or 10 units, what's their business actually look like from where you sit? How do their business look like?
SPEAKER_00I mean, funnily enough, I also look at the operators that run one unit or two units, right? So I would paraphrase it as what we also do internally, as the differentiation or the shift that came with the softwares at the time was moving from the the accidental or unintentional host to the intentional host. Meaning or intentional operator in that sense. Meaning you you you want that grade of professionalization. And that doesn't mean I'm running a property management company, but that does mean I do think of my vacation rental as a business. And that's also one of my most important topics that I like to talk with operators about. You do need to think of your vacation rental as a business, especially if you're a smaller business and you do it on the side, right? Most of our hosts operate their vacation rental besides their normal jobs. So they really need to take care of the basics and also learn how to think in hospitality terms, but at the same time, the business needs to make sense. So the things I see with the different sizes of operators, you have a certain progression in terms of thinking of how do I automate processes, how do I make stays better, how do I think about the hospitality versus the automation aspect? But also it's it's very important that they understand, and that varies quite a bit between operators. Is do I understand my unit economics? Do I understand what scale means for me? Do I just need to want to scale because I want to tell my friends that I'm now operating 40 units instead of 10? Or do I actually see that it's bringing me the right margin and the right peace of mind in it? So and there's obviously a variety of things that I can now talk about, but the the clear thing is this understanding the business angle of it as well.
SPEAKER_01We could speak for hours, but what you just said resonates so strong to me on this particular topic. No matter if it's one unit, 20 units, 50 units, or even bigger, you need to think about you're running a business. And I like that a lot. You know, no matter if you still have a day job and you do this on the side, um, a lot of them treat it as a side gig, but then, you know, sort of forget that we need professional hosts to provide a good guest experience, and you need to think that you're running this as a business. Obviously, with one unit it's less complex than it is with many, but at the end of the day, we can talk unit economics from the from one unit upwards uh and everything else as well. So I want to talk about the inflection point, and especially the ones you mentioned at the beginning. You know, you also obviously have a lot of single hosts, one unit, two units. Um, what is the inflection point? Most of them do not see coming when they want to potentially grow further.
SPEAKER_00Funnily enough, I or what I see, especially with growing hosts, it's not a question of number of units per se, but it's more a question of when does that mindset shift come into place? When do I realize that I need to automate the transactional part of it, but need to stay in charge of the hospitality, so the relationship part of it, when do I start looking at it really as a business instead of I see it as a business because I'm looking at occupancy and ADRs a bit? There is a certain difference to it. Plus, also I think the main point where I if I if I have to put it down to one thing where the mindset shift starts for becoming very professional is when people think about their own time in terms of opportunity costs. And a lot of semi-professional hosts do not respect their own time, which is a perfectly normal thing, but you need to think of that.
SPEAKER_01Yeah, that's I just wanted to talk about data, and that's an interesting point that you raised the time, and that reminds me of our conversations we had on the home away board level uh back 10 years ago, before it was even sold to Expedia. We talked about doing marketing campaigns to homeowners, really like with a stopwatch, calculating the amount of time that people spend with everything else, which they don't account for, even in terms of their own operating costs or everything else. So that's amazing. But besides time on data, what else is it that helps your hosts, no matter the size, that they understand with additional data that you provide?
SPEAKER_00So I think the main thing for us to understand at one point where the actual levers for the different properties and units are, right? So what you want to understand is what is actually the channel mix I'm getting in? What are the channels that do perform versus the others? Do I specifically want to prioritize one or the other? Do can I charge different rates across different channels? And can I actually look at my occupancy as a um in as a business metric, right? And uh I think Julie said it in your latest podcast that you don't necessarily should look at occupancy, where I agree it's more about the revenue per available room.
SPEAKER_01Rev power, yep.
SPEAKER_00Yeah, I've I've been saying the same. It's like people need to get rid of the thinking that 100% occupancy is the number to achieve. Because most of the times it's not. Then you're probably selling too cheap.
SPEAKER_01Absolutely. 100% occupancy means you definitely leave money on the table. Uh quote unquote, uh, Julie Brinkman. Um, so let's go deeper here because a lot of operators are living this right now without naming the true issue. So for me, here's the thing I keep coming back to all the time. Smoobu has always served the long tail independent hosts, small operators, people with a handful of properties. So you can see something the rest of us only guess at. Are those same customers genuinely growing into professional operators? Or are you constantly replacing the ones who churn out with new hosts entering the market? What do you what does your data say? And that's something I'm very eager to learn more about.
SPEAKER_00Luckily enough, both for us. So you have a you have a certain set, and for us, that is that the biggest number of our user base is between one and five properties. That is the main part of our user base. And that is also a lot of those also stay in that area. So we classically see that you have these the hosts that are intentional in their ways of hosting and they want to professionalize and do run a business, but don't necessarily have the need of saying, I need to scale, I need to do better, I need to become a property manager. But of course, you have a certain subset of those users, because in the end, the the sheer number of the tens of thousands of hosts in that first category, not all of them can become property managers. There are there are not enough properties out there to make that happen at one point. But of course, you have a certain subset of growth-minded people that already come in with the intention, hey, I want to get in very professional and I want to scale through. Those we also have. And they do in in terms of absolute numbers, that number also grows for us. In terms of relative number, if you compare hosts, we're still very much in that entry-level bracket. And I I've also recently, I think last week, I can't remember why actually, but I've also had a look at the numbers in terms of how many units on average actually new hosts bring for us. And funnily enough, we have a what I found a very positive development. At the same time, we we we get more new hosts in. Yeah. So and those hosts come with less properties on average. So we even enable the smaller hosts on average to start professionalizing and make their hosting better with Smooble. But at the same time, our average number of units across the board is growing as well. So you also see the effect of hosts that are longer with us also adding more units and growing with us. So luckily we we we have both developments, and I think it's more of a uh a mindset question. I don't see the development that through everything that is happening right now, every small host wants to professionalize. And I think what a lot of the industry that is at least publicly very geared towards the large property manager enterprise customers always forgets is the long tail is not necessarily doing that for growth's sake. They have their couple of vacation rentals, they want to manage it properly, they want to save their time because they understand I don't want to deal with uh tens of thousands of hours of hosting stress, but I also don't need 10 properties to do it, or 20 or 30, or 100. So there is what I would call this casual professional host, um, where they don't necessarily want to grow farther.
SPEAKER_01This is so interesting. So you're basically saying that the the ultimate long tail market share of the long tail remains basically the same, right? Because we if we can't assume that that that inventory is consolidating, moving into more managed units or or more consolidated units, because the long tail is is pretty consistent. And and that's an interesting phenomenon. So that means that we could we could think about the fact that professionalization is not helping to consolidate the market, the fragmentation with the data that you see remains the same.
SPEAKER_00I would argue um differently and two things. Because you make a good point. So you have the consolidation you definitely see happening in the big areas, the larger players. And for me, large is everything over 100 properties, right? Where as if you ask the colleagues from Guestie, 100 is probably on the lower end. So the larger players definitely looking for consolidation and uh this economics of scale because margin pressure is there for property managers, and the margin pressure is coming from exactly that long tail. Because by now, with technology and knowledge being available as is, it's much easier for me as a host to say, why do I have to give my margin away to a property manager when I can do it myself? At probably a little bit more effort, not gonna lie, because hosting is not a passive job, but I can do it more effort or little effort with much more margin. And this is also why I would even argue the long tail is growing. Because on the one hand side, it is becoming attractive to host yourself, and on the other hand side, you also get those hosts that at one point realize do I really need a large property manager to run my company if I do that? So you you have the the pressure from both sides and technology is actually pushing that development. So what I'm seeing is the the long tail is actually becoming bigger rather than staying stable or smaller.
SPEAKER_01That's extremely interesting. And uh I love your lens because you have a lot of data that obviously supports that geographically, you're you know, you're you're quite spread as well across Europe. Um so this is this visibility is not just reduced to a German market uh where you're probably very strong as well, but looks at more internationally as well, right?
SPEAKER_00Yeah. And you do see that if you if you think about our host base, which is even to my surprise, always quite similar in the main aspects of it around around Europe and even around the globe, right? We have like 85% of our users are within Europe and the rest is spread. We have a couple thousand or around a thousand-ish in uh in the US as well, and you see similar developments, but the the thing is the same. Hosts can now act more professional than they could 10 years ago through technology, through knowledge, and that is also that makes the the market entry for that long tail much easier because it's not as scary as it was before to manage your vacation rental. Twenty years ago, that thing was I'm gonna say freaking because I never know if I can swear or not on a podcast, but that's okay. Um it's um it's it's it's it was scary a while ago because you you didn't really know what you were getting into, so you'd rather leave it to the professionals. Right now, as with everything else, you can do it yourself. So why not do it?
SPEAKER_01Absolutely, and then there's a lot of other things to consider the hassle, the hours you put into it, the margin that you can make with yourself, then giving to a professional property manager, etc. So I could I could definitely understand your point of view and where you're predicting this and what the numbers are telling you. There's one more thing I want to raise is that the dependency on OTAs. You know, one thing that we have saw with platforms like Airbnb, it obviously gave a massive boost to the industry. And how long it took from an educational standpoint to not have dependency on, you know, we saw so many urban operators across the US and everywhere just building on the back of one channel, uh, their business. And and that is, for me as an investor or anybody else, it's not really attractive because the dependency is massive, uh, also in relation to acquisition costs, conversion costs, customer acquisition costs, etc. But this this dependency that hosts and operators have on OTAs is also something that a platform like yours alleviates, but that needs education, right?
SPEAKER_00Yeah, and I think it's a a very differentiated answer, and it's it's probably, as you know, one of the most heatedly debated topics in the industry about how can I make myself independent of the OTAs and get into direct bookings and so on and so forth. I I have a more nuanced opinion to it, where I would say it's where you're right. I would definitely say, hey, definitely you need to differentiate a bit, you need to diversify it. So I have a finance background. For me, you don't put all your eggs in one basket that holds true across every investment decision, right? Even for uh channel distribution, obviously. But I would also go as far to say OTAs are also or can also be a very good investment, especially for smaller hosts. If you do not have the scale or need or the time or the knowledge to push direct bookings to 80% of your business, which is also super hard if you're not a big operator, then the OTA business is your marketing invest. It's it's very easy. It's uh it's yes, you are dependent up to a certain point for it, but it's the same dependency that the OTAs have on Google. So they also don't have a different distribution channel than bidding on or shoving the money down Google's throat. So it's it's it's it's the same game, just one step further down. So it's it's a marketing investment. I think that is just one thing you need to understand while you run the vacation rental as your business.
SPEAKER_01Absolutely. But maybe you know, for me to get back to that one once more, I said a single distribution. Distribution dependency on an OTA, that could be a trap, right? And and and you would you tend to agree, but what needs to change? Because what has to change structurally in how an operator runs distribution to get out from under the platforms rather than just booking more through them, I agree. But my point that I'm trying to make is that we want to talk about multi-channel distribution and how long has that taken? Because interestingly enough, if you look at the European market, we are far more geared, hosts, single hosts, all the way up to professional property managers who use multiple channels to distribute. And I think that's a potential strength of your own platform. Whereas in the US, they are very reluctant. I mean, that's why, you know, companies like Booking had it pretty tough to get market share in the US. Everything was sitting on Expedia Verbo and Airbnb as channels, and that's about it. But the European landscape is totally different. And I think that's that's has was also part of education. I think you at Smoobu will do the same because ultimately if somebody uses your platform, it has access to multi-channel distribution.
SPEAKER_00Yeah, and I think it's also the the the right word you're using is the educational part. In the end, I am not pushing anyone to do anything but to gear the hosts towards understanding what either the risks are of single channel distribution or the benefits. So I'd rather I usually rather come from the benefit side, right? So understand why you should use different channels. But I also at the same time say, hey, it's it's usually not worth running an endless set of channels just for the sake of adding one more channel to the mix, right? So you need to be very conscious also on how many channels you want to manage, but those you decide for, you need to manage well. And then it's also about the educational part of there are differences in how do I manage different channels, right? My Airbnb listing and the Airbnb conversion is not necessarily the same as it's for a booking.com. They have different travelers that book on that site, they have different amenities, they have different uh description fields, they even have a different number of description fields uh across the different OTAs. So all of those things you need to be very aware and very consciously managing. Uh and I think then it's it's it's about optimizing the different channels and also understanding, hey, and trying out a bit, right? If you're in a uh, for example, if you're a host that's hosting in a super rural area in the north part of Germany, or uh it's probably very useful to list on uh on booking, on home to go in a bit on Airbnb. Whereas if you're the super urban apartment in Berlin or Rome or actually city, totally different game, right? So it's also a bit of understanding your USP and then seeing okay what channels do actually fit.
SPEAKER_01And I think Yeah, go ahead. Sorry.
SPEAKER_00No, I think what you said uh that we're more used to it in Europe. I think that's also due to the fact that we have these mass of super niche channels, right? So we've always had this this this multitude of very niche local channels and uh where it's list or request to book or whatever, but uh hosts are much more used to it coming from the offline world and then now also applying that logic to the online world. It's much easier.
SPEAKER_01Well, but the logic that you just explained would not would not support the Germans saying our kleinvie missed. Would that be fair when you look at these micro channels or these smaller channels?
SPEAKER_00Yes and no. Um so I don't it's I wouldn't even know how to translate it.
SPEAKER_01We will see it on the transcription and in the podcast, so we'll see.
SPEAKER_00It's it's it's it's a yes and no, and the the clear answer also from a uh financial optimization point of view. So it it's it depends. So is the effort that you need to put into listing on a small niche platform worth what you get out of it? So it's probably not worth listing on 12 different niche platforms if you get one booking a year from all of those 12. Then you should think about hey, I want to reduce complexity, I need to I need to get that one booking somewhere else. If you do add three more niche platforms, for example, there is uh um depending on what you do as a host, right? But there are super niche portals like Ferry and Ambassa, so holidays at uh at at water, where it's lake properties, sea properties, you name it, or dock vacations. It's a German website, but like very specific where you can actually get, if your property fits those descriptions, kind of very good extra boost of booking. So you just need to make the conscious decision is it worth the effort?
SPEAKER_01This episode is brought to you by Breezeway. As portfolios grow, operational complexity grows with them. Breezeway helps operators manage cleaning coordination, inspections, maintenance workflows, and detailed property care. All in one structured system. For anyone serious about protecting their reputation while scaling efficiently, operational clarity is critical. Breezeway is a partner worth exploring. Now back to the conversation. Yeah. Yeah, we're seeing some of these in the US as well, like Lake.com is one that uh so we're we're seeing the US who are doing similar things now and trying to be a little bit more specific in terms of the product offering and and trying to break them down. We'll see if they if they're going to be successful in breaking into a more multi-channel approach. So we've talked a lot about channel management and distribution, Yannick. I want to move forward and in relation to you know smooth and and PMSs, you know, PM like you have also PMS functionality, obviously, um, you know, and PMSs for me, you know, calendar management channel, we talked about messaging in a compounding way that looks very small now in terms of offering. What does what in your view does a PMS have to become for a single host, for even a mid-sized and larger operator, let's say up to 100 units, then just processing it? What else is there to control and support the operator?
SPEAKER_03Yeah.
SPEAKER_00I I I think in terms of general product offering, and I'll expand on that the the second after, it's you need to move from just sheer mirroring things, so system of record, to actually becoming more like the operating system. So you need to stay the central hub for information, but also deliver the ability to give recommendations andor drive actions from this. So it moves away from I just sync my calendars and I sync prices and it mirrors information and I just have it in one place to actually being able to drive actions from this. Do I have the right pictures chosen for the different channels? Can I automate my messages? Can I automate my messages towards a degree that not only saves me time but also makes the experience better? Will I have the right prices at the right time? So all of these things you need to move from I just collect and or synchronize info to actually helping the hosts make better decisions. And that also goes a bit into the part of what is important for us. I don't see Smoulu as a just a product company. So we're not just a technology company. By now we're also an educator and rather an ecosystem builder. So what's what's super important for us, especially on that long tail end for the hosts, is not only delivering. I I always tell internally the the thing of you don't only need to deliver the tools. So if you want to dig a hole, you can't only deliver the machinery for it, but you also need to deliver the description of how to use all the tools. So you really need to consciously help hosts to be able to do better. And that might be entry-level hosts that first need to understand: should I list on different channels? What are the important things to do that? How do I actually set up my listings? Two more advanced topics. How do I automate the guest journey? What is important to automate? Where does hospitality come into play? And how do I actually scale? And that also will combine topics that are a little bit more out of scope for a technology company, connecting with tax attorneys, building that community so hosts can talk to each other. A big topic that we had for hosts was it's a lonely business, as opposed to PMs that know I do that professionally and I know my competitors, and I go to conferences and I talk to them for hosts. They don't know other hosts. So we we we want to like we invest a lot of time into actually being able to build that community, have hosts understand what are the problems of other hosts and just enable them better. So it's it's how the PMS needs to develop, very clearly, system of record to operating system, moving from what happened to what should you actually do. And for us as MUBO, where we definitely need to go is also does the ecosystem is much more important than ever, rather than especially for that long tail.
SPEAKER_01Education is a great point. Before we go there, and also in hospitality and and and where we're actually in as a business, I want to touch a little bit more broadly in terms of technology and including AI into that conversation as well, Yannick. Um, you know, because I think especially for smaller hosts, it's probably pretty challenging. You said, you know, understanding what to automate, what not to automate, where does hospitality come in, et cetera, et cetera. Where, in your view, do operators at this stage overestimate the tools and where do they badly underestimate them? I mean, you you brought an interesting analogy, and that's the famous uh Excel analogy. You know, when I use Excel, I probably use about 5% that Excel can do. Um, and in in complex technologies, it's the same thing, and we we are constantly uh underuse the potential of this technology, but at the same time, we want to create more stickiness, we want to create the customer more efficient, we want to reduce our customer service uh efforts, etc. etc. And AI is going to play a quite fundamental role in this conversation as well. And and where do you think they, you know, the the operators, no matter of size, to overestimate the tools or uh badly underestimate them?
SPEAKER_00I I I love that you put it where do they overestimate and underestimated, uh, and it's not about what's the hype. Um so I I think the I want to I would differentiate a bit in terms of uh the tech bubble. So all the tech providers and technology companies out there in the hospitality industry, as well as larger operators. I would argue for for them the general adoption of AI plays a much bigger role. So obviously, for us internally as a technology company and everybody out there, uh moving internal processes faster, being able to deliver better service, to develop faster and all of those things, that's a definite yes. So their AI, I think, is the biggest game changer in delivering speed within the companies that then can deliver value to hosts. I think that is the biggest game changer. It's it I don't think it is the agent that can run a property management company on their own right now. And that is not necessarily because AI doesn't have the capability to do it. I very much think it can. I think it's more of an adoption timing. So if you would think that's and then I come also to the long tail, the mobile web took uh quite a bit to adopt. Also, that now everybody is talking about yes, everything will be booked via LLMs. Yeah, that I do think that is true in a certain time and there will be more bookings, but right now, globally, we're still looking at 30% bookings that happen offline. They're not they're not even using OTAs. So before we move to everything will be booked via LLMs, those people will actually have to discover that the internet exists. So it is a bit it is a bit tricky. And I would say to come back to your question, what is underhyped are actually the capabilities that it enables the companies that use it well and mostly the technology companies to deliver value and deliver value faster to hosts. Where is it overhyped a bit? I think it's on the traveler side that it will that every travel will now be booked via LLMs and the findability needs to be there. I do think that will go slower than all the hype is now telling us. And if you if you look at it for us from a long tail host perspective, there we're talking about a completely oftentimes different technological literacy for the hosts. We they they they are new to software as a service, they're new to the hosting business, they will be very skeptical of using AI for a lot of things. So my job as Smoobu, and I said before, with the ecosystem of education and technology at the same time, is to actually show them what AI can do. And I don't need the big label, this is an AI agent, it will do the following for them. It can also be much more subtle. But that is our job as technology providers to deliver that value to our hosts and make it tangible for the host without scaring them away.
SPEAKER_01Fantastic. I I would tend to disagree, but maybe we can check in Yannick in 12 months or something and and pull this conversation out. It's gonna be definitely interesting.
SPEAKER_00What are you disagreeing with?
SPEAKER_01In terms of the evolution of AI, I mean, I I'm I'm totally agreeing with you in a sense of we have seen a lot of other technologies, right? I mean, I've been in this space now for 22 years, and I've had the honor to go to focus ride conferences for 20 years and sort of see the evolution of travel distribution, and and we've seen a lot of things that didn't materialize as quickly. Voice uh as an interface was one that never really took off. It took forever for mobile adoption. How long did we hear people uh you know with their websites that they need to have a mobile adoption? It's probably not even now totally over yet. Um mobile adoption took forever. Uh and there's there's other pieces, you know, in terms of travel and travel search. I think AI is the, I mean, if you look at the compounding rate of AI, it's gonna happen potentially uh faster. But I agree we also need to look at the entire picture, what is still booked offline. You have certain market structures, especially in the German market of Europe, uh the Dach region, Germany, Austria, and Switzerland, where there's still a lot of offline uh uh DMOs play a significant stronger role uh uh here in Europe as well. So that has definitely an impact and therefore will slow down some of that adoption as well. But I I would tend to agree it's also going to be interesting to see where that shift is, because a lot of people argue that this doesn't mean that we potentially need less of the human capital. We can just shift it to create a better guest experience or taking care of the owners or or whatever it might be and being more or going back to hospitality because what we know is that the short-term rental, no matter of size, we're not techies, we are uh we're up, we're hospitality people. And I want to move that conversation to the product. Uh also on smooth where you see thousands of listing, we're in the hospitality business. Where does the industry, even smaller hosts, but uh and also mid-sized hosts, where are we falling short when it comes to the aspect of hospitality and the product and the content um we're we're uh putting online?
SPEAKER_03I would say is not unless uh the usual shortcomings come when hosts don't think about why or what I should automate.
SPEAKER_00And and for me, there needs to be a very conscious and clear distinction between what you should and what you shouldn't automate in in a hospitality business. And that challenge gets tougher if you scale. So it's tougher if you have 100 properties. So for me it's always if I have to differentiate it, what you should automate is a the transactional part of the guest journey or booking experience, and the relationship part you still need to own. And there are a couple of examples, right? So if you're everything where there is not necessarily emotion involved, or that just needs to work, smooth booking experience, direct booking experience, clear descriptions, pictures, it's clear what I'm gonna book, clear check-in instructions, how can I get into the property, and so on and so forth. That just needs to work. I don't need the crazy human touch there. But the moment I am in that property or I start my journey, that is emotion for me. Travel or vacation is probably the most important time in the year for most of the people across the world. So that one needs to land. And I've I've said it before: whether you have one unit or a hundred units for a guest, it's always that one unit that they're gonna stay in. They don't care if you have 99 other units that are also well run and blah, blah, blah. If that one unit or if that one stay doesn't land, that gives you a bad experience. So you want consciously to think about every stay, every home, how you can make that relationship work. Have a part of a handwritten note that you can put in every property that you can even sign at bulk and give to your cleaning crews to to put out in the properties. Have a little nicely decorated local gift basket, something that just makes sense, that feels at home, and just don't have the super clean standard furniture in there that makes it very sterile and those kind of things. Just like make it feel at home, make it like you would also want to stay there. And that's I think what gets lost very quickly, especially if you scale and want to scale fast, and then you think, yeah, okay, I just scale and I make it very utilitarian. It does work to a certain point, but you you fail the the the I want to say the five-star or the 10 points experience in the end.
SPEAKER_01Yeah, I mean, we definitely don't want standards like the hotels do, but we as an industry somehow still need a certain amount of standards because one thing that we definitely see when we look at the demand patterns, that more the upper market products, the you know, the higher quality products, I'm not saying luxury, but premium products, solid products is definitely winning more market share than mid and low market, where there is always a budget market, obviously as well. But since we are attracting a lot more guests in the STR industry globally, we are also facing higher expectations towards the products, that everything works and everything else. How do you see that at smooth? And what do you do also to encourage potentially your your hosts and your customers to improve product? Because you know, we've seen numbers also in Europe, but uh dramatically in the US that the mid-market is losing a lot of market share.
SPEAKER_00Yeah, I think that's a that's a that's a very good point. It's a it's a point I always talk or talk a lot about with hosts recently. It's this the rising guest expectation, and that comes from two ways, basically. On the one hand, side, especially now being in a recession in Europe, you have less disposable income, you have less money to spend, but people still spend most of their money on vacations. So with this, I actually spend more of my disposable income on the vacation, my expectation rises. So I really want to get the the bang for the buck on my vacation. And at the same time, we're not cheaper than hotels anymore. So guests do have also the expectation if I pay a similar price for a vacation rental, then for a hotel room, I do expect the basics to work. I don't want to bring my towels, I want there to be a certain level of supplies in terms of small cleaning supplies, it needs but it needs to be clean, it doesn't have to be that greasy oil bottle that's somewhere in there from the previous guests. Um soap, shampoo in small bottles, those kind of things. It needs to be clean, it needs to be proper, it needs to have the proper kitchen equipment, sharp knives. You'd be surprised in how many vacation rentals I've stayed that does not have any freaking sharp knife.
SPEAKER_01Don't get me started.
SPEAKER_00Yeah, it's it's it but it's still amazing, right? That you you have those operators who who work under that threshold. But the the professional uh professionalisation level is if you compare it the expectation. It's yes, you have a certain expectation on the emotional side, on the relation side, but the the the expectation that rose drastically is coming from those hygiene factors. Is a smooth check in possible? Can I get in whenever I want? Can I get into certain times? Is it clean? Is it properly stocked? And so on and so forth. So all these things I talked before on the transactional side, they need to work. That's not optional anymore. If I go to a property and I have to call or message 10,000 times back and forth with the owner or the host, when can I pick up the key somewhere? I I already have it here. And then worst case, there's not even towels, and I came with a with the plane somewhere and was like, where the heck should I bring towels with me? And those kind of things. So the the expectation rises, and that yes, on the one hand side that puts pressure on the market and on the mid-market, but for me it's much more, and it's what I always tell hosts, it's opportunity. If the competitiveness of the market or the maturity of the market, in that case, I would even call it, I don't think it is it's perfectly normal behavior that a market matures and becomes more professional, that is opportunity for you. That will press every one of those people who do not do that out of the market. And that is opportunity because the demand is still there. You just need to capture it and you need to capture it in a smart way.
SPEAKER_01Yeah, I mean, you can you get me going sharp knives. I'm a prof I'm a um I'm a semi-professional, passionate chef, so I always bring my own knives in properties um wherever I go because it's uh it's absolutely ruins my holiday to see that these knives that are sitting in these drawers don't even kill a dead dog. Uh, and then you want to do your first um um potentially uh fried egg. And the problem is that the fried egg will never come out of the pan for two weeks because you need to uh rinse it for so long because it sticks to the pan. And then it gets many other points. You know, where's the umbrella when it rains? Uh is there an iron board? So people should homeowners and hosts should always basically challenge their own properties, staying in them as well, which I always recommend for people to do. Stay in the properties, experience them. Uh, and it's crazy. And one last thing that that irritates the hell out of me as well is is whenever I uh arrive at a property management comp uh uh property, I turn the toaster upside down. And if I find the breakfast for the last 10 weeks in it, uh it's it's an interesting one because toasters never get cleaned or very seldom. Um, and and there's a few others of those. And one last thing that is interesting, I'd love to hear your opinion on that. I'm going this year with my family, um three children to Denmark. We booked an incredible beautiful property with sauna and jacuzzi in the and the works, but we have to bring our bone, bedlin, and towels with us, right? And Denmark is the vast majority of the market are still doing that.
SPEAKER_02Do you have the same experience?
SPEAKER_00With our hosts, luckily not. But I I I do see it very much in the classic markets, especially it's a very common thing at the Baltic Sea, at the the the North Sea, those kind of regions. It really gets me going. I do not understand it. It's it it triggers not so much. It's it's it's because and the worst case is if it's not super properly flagged, and worst case you arrive there and you don't have any or stuff like it, and then it it it gets really tricky because my stay is already rude. Like if I'm staying there and what am I gonna do? And what what more triggers me is the I understand the the former business logic of it that you want to charge extra for it or there's extra cost and you want to offer a low price for people who want to do that. I I see that kind of so it it gets very tricky that are I don't think you can very much argue with the host in the sense that yeah, but we have so many bookings that actually want to bring their own linen to save the couple of 30 euros in the end. Yes, from a machine economical point of view, I would also argue you can price that in and then have actually the target group much bigger because you can actually get then guests in that do not want to bring their own linen because they don't have a car, can't bring it, or whatever. It's yeah, it's for me. I'm not a fan.
SPEAKER_01I totally agree. There needs to be certain standards, and that is unacceptable. I totally get it. There is reasons you alluded to them historically. The Germans going to Denmark, it's always been that way. The properties are too remote, so they can't manage bedlinen. I rang these guys today, it's a professional property management company we're renting from, and they said, Yeah, you can rent it, you can rent linen in our office. Like, yeah, of course I do. Uh, definitely don't do that. And luckily, we're going with a with a car that has some space in it, but I just need two extra bags for linen and towels, and it's just it's just not a good experience. But anyway, I totally agree with you. We need to have certain standards in our industry and that's what I meant with that. Of course, we love the uniqueness of properties and everything else. That's why we're also in this industry, but there needs to be certain standards that the customer uh expects. So before we wrap this up, Yannick, I wanted to talk to you about where do you see the single biggest risk to the short-term rental industry from your lens?
SPEAKER_00Luckily enough, I would say the industry per se is super resilient. So I I I like that we we are not super susceptible to any bigger crises. But for me, the single biggest risk is in the end the demand downturn triggered by any macroeconomic factors. So it's it's luckily, and I don't want this to happen, but anything that can happen politically, wars, recessions, those kind of things obviously are a risk for an industry that is dependent on demand. As said before, luckily, I don't think those are or they're a major risk. Anything else is a benefit or an opportunity. Regulation, in my opinion, yes, it's very annoying, but it's also an opportunity to become professional and get all the non-professionals out of the market so you can benefit from it at a host. AI is going to be a game changer. It will make create so much more value and more value faster for everyone, for hosts, for guests, and so on. And as I said before, the industry is resilient. So we've seen a lot of crises. We've seen that if you can't travel very far away anymore, you can still stay in your countries, which is actually beneficial for the vacation rental industry in Europe, for example. So it's it's I think it's why we all love the industry. Where we're we're quite resilient. It's a it's a it's a nice industry to be in.
SPEAKER_01One thing that I that latches on to this uh piece is is global warming, which we haven't talked about at uh yet either, but we have impact uh as well. We don't see that as a risk. Uh we see that as a risk in long term for for uh but that's a global risk that we have. But global warming also has an impact in in consumer behavior and travel behavior, especially if you look at it through a lens of domestic travel within Europe. Have you seen any shifts that that is actually happening where people go less to let's say Greece or Spain and Cyprus and go more up to the Scandinavian countries?
SPEAKER_00Yes, much more so anecdotal now than where I could say there is a very, very clear pattern right now, especially for that shift. So, what we do see occupancy and booking volume in the super hot countries in summer goes down or is more or less competitive because nobody wants to stay at 45 degrees in Italy anymore in summer, and people do now start also realizing this. Now, as to the shift to the Nordics, it's a bit tricky to see because that overlays a bit with the recession pattern that we also have in those countries. So there is also a bit less travel in general, and getting the bookings in is harder. So I can't say that I very clearly see that it's moving from south to north, but anecdotally, and anecdotally for me is always having talked to a couple of hundred hosts the last couple of months, so it's uh it's at least uh rather data-driven. We definitely see the pattern in the southern European countries. And what I know from travel behavior, it moves farther north or shifts times actually. So you then have it more towards the the edge times of the summer, but then obviously the the the month of August, nobody's going, um nobody but less people going to southern Spain or Italy and those kind of destinations.
SPEAKER_01You know, I was just thinking that while we just had a heat wave here in Europe for 14 days, being 36, 37 degrees in Switzerland, which we have never seen. I mean, I didn't I was not eager to drive to Spain on holidays. Well, I have 37 degrees at home. Um, so that might have an impact as well, that these heat waves getting longer, and then people start thinking about you said it more towards the the shoulder. If they can travel, obviously with kids' school holidays, it's a bit of a challenge. And the second, uh also domestic travel. But the product in itself has a great uh value proposition, regardless how far you want to travel. It's still good to get out of your own four walls and experience something different. And at the end, that's what we want and spend some time with friends and family uh out, and that's where short-term rental is still the uh the best option, in my viewpoint. So going on further, I didn't ask you if you book a hotel or a vacation home for your holidays. You can keep that as a secret. But how does uh short-term rental, in your viewpoint, look like in the next two or three years? What are the biggest changes we're gonna look at, especially from let's say from a host standpoint?
SPEAKER_00From a host standpoint, it's definitely the professionalization angle. And with this, I don't mean that you need to become a property manager, but as said before, it's rising expectations and you need to have your processes under control and you need to have your business under control. It's not enough to have this unintentional host mindset anymore that you could have when Airbnb started out or when when booking first started out with alternative accommodations in the 2017, 18s. I just list and it somehow gets rented out and I make a little bit of money from it. No, you now have stricter regulations, rising guest expectations, competition from hotels, because you have the same price point. So you need to get that in order. And this, I think, is especially in the next three years, the big differentiator in the market. So you all the unprofessional or unintentional supply will get pushed out of the market, whereas then the intentional supply and the professional supply has a much bigger chance of actually grabbing that demand. And at the same time, with AI coming really into play, the time to value will also accelerate quite a bit on all fronts.
SPEAKER_01Fantastic. Yannick, this was a message not just for single hosts, this was a message for clearly everybody within that game. Intentional supplies, what this is all about, unintentional definitely will be pushed out. That's a message for single hosts, but also for property manager with larger counts of units, because we the larger uh we have raising guest expectations and many other reasons we need to consider that. So uh fantastic closing. Yannick, I want to thank you for your time. Being on STR Global Unlocked, I'm Simon Lehman, and I'm looking forward to having you back on the next episode. In in the meantime, Yannick, we will schedule a call in 12 to 18 months and hopefully see some differences in how the business have uh changed in the meantime. Until then, good luck with everything, Yannick. It was great to have you. This conversation with Yannick makes one thing clear. The future of short-term rentals will not only be shaped by big operators, it will also be shaped by smaller hosts who understand the basics, use technology well, and run their properties like real hospitality businesses. But once the systems, the distribution and operations are in place, the next question is how do you make guests come back to you directly? That is exactly what I discussed with Matthew Orley, CEO of Red College, in the episode How to Turn SDR guests into loyal customers. We talked about brand, guest relationships, membership, repeat days, direct bookings, and why loyalty needs to be much more than simple discounts. So if you want to understand how to turn one-time bookings in long-term custom relationships, watch that episode.