Prior to co-founding GuestReady in 2016, CEO Alex Limpert witnessed how technology can unlock scale during his time working in a food delivery marketplace. Alex brought with him to GuestReady the thinking that functioning mobile apps and other technology could (and did) seamlessly coordinate operational processes and solve inefficiencies. Today GuestReady manages around 2,500 properties across 20 cities, has sold 1,200,000+ guest nights and generated rental income of €50M+ for owners. Having very recently launched a successful Seedrs campaign, unlocked four service offerings and reached EBITDA profitability for the first time this summer, we caught up with Alex to discuss GuestReady’s focus today.
PillowTalk Media: You co-founded GuestReady in 2016 with a solid ambition to grow. The company now manages around 2,500 properties across 20 cities having sold 1,200,000+ guest nights and generating rental income of €50M+ for your owners. Covid-19 most definitely hit you hard this Spring, but how have things changed since we last spoke at The Shortyz back in March?
Alex Limpert: Until May, we were severely impacted across markets due to strict travel and local restrictions. However, we benefited from the overall ease of measures over the summer, and the strong domestic demand for staycations leading to a strong month of August which reached pre-covid levels of booking values. The reactiveness of our team played a big role, leading initiatives such as extending our footprint in the mid-term market, developing our direct booking offering, and promoting stay extensions to current guests. We currently see the impact of the second Covid-19 wave, but thanks to the learnings acquired in spring, we were better prepared this time around.
2020 also saw its share of positive notes. For example, we expanded our services to Switzerland, and for the first time reached EBITDA profitability in August. We also released automated payment processing via virtual wallets, which was a highly anticipated feature we had been working on for some time. Although this challenging time is not over yet, we’re confident about our future and looking forward to seeing what it has in store for us.
PTM: GuestReady recently launched a crowdfunding campaign on Seedrs, smashing your €1,5 million funding target in just 24 hours. (Congratulations). Why did you decide to go the crowdfunding route this time and how will the investment be used?
Alex Limpert: Thank you. We got an overwhelming response from our community and investors at large, who perceive the immense value that companies such as GuestReady can unlock. And you are right, we had always raised funds uniquely with VCs and other institutional investors. The reason we decided to go down the crowdfunding route with Seedrs this time is that it allows us to further strengthen our community by having our customers, partners and others in our community as GuestReady shareholders. The bigger and stronger our community the more successful we’ll be in the future.
The funds raised in this round will be allocated towards three main areas. Firstly, it will fuel our continued growth in existing markets, broadening the footprint of active cities. Secondly, part of the funds will be invested into our tech product development to further increase our operational efficiency. Finally, we will ramp up our Software-only and Online Property Management service offering, which we have launched more than a year ago and have been refining ever since.
PTM: GuestReady has been built on your own management software that you now also sell to other property managers. Firstly, how has the decision to go down the proprietary route shaped the growth of the business?
Alex Limpert: From day one, our overarching filter was ‘make our life easier to unlock scale’, without reinventing the wheel. Channel managers for example were already available, so we did not waste resources on that. On the other hand solutions to handle the operational parts of managing bookings, properties, and messaging all needed to be built as off-the-shelf tech was not catering to property managers handling anything much beyond 50 properties.
Developing our own solutions has benefitted us greatly, enabling us to scale faster and leaner than we could have done without in-house technology.
I also believe that building the technology from a user’s perspective has enabled us to make it much more tailored to the actual needs of property managers, as opposed to being a software organisation trying to cater to property managers based purely on an outside view. Nothing beats the real life experience of starting on your own and facing all the challenges along the way.
The fact that we can now license our property management system to third party property managers to run their business is a testament to the quality of our technology. The property managers who use our solution highly appreciate the fully comprehensive features of our PMS, including a pricing algorithm, payment automation and operational process coordination.
PTM: Secondly, with the benefit of hindsight, is there anything that you would have done differently in terms of your tech stack?
Alex Limpert: Thinking hard about it, I honestly don’t think I would have changed much. Prior to GuestReady I worked for Foodpanda (a Rocket Internet food delivery marketplace similar to Deliveroo or UberEats), and witnessed how technology unlocked scale. I saw how inefficient it can be when you try to manage your food delivery operations by texting orders to restaurants and addresses to delivery riders, and how efficient it becomes as soon as you have functioning mobile apps and other technology that seamlessly coordinate operational processes.
At GuestReady, from the beginning we obsessed over solving these operational aspects through technology because we knew this would be the biggest differentiator between a scaling property manager and a struggling one.
Our approach to development of our tech stack has always been driven by the actual biggest business needs at the time and I believe that approach has ultimately led to a good outcome.
PTM: The GuestReady business model has shifted from solely 100% full property management services to four distinct services offering a partnership model for other property managers, real estate agents or asset owners that are looking to enter the short-term rental market. What do you think the future of short-term rental property management business models might look like in the next 2-3 years?
Alex Limpert: I am not one to make firm future predictions about the industry itself, but I can tell you the two fronts where our focus will be.
First, on the full property management front we are observing an incoming flow of larger real estate players showing interest in the short-term rental market. They have the real estate assets and know how, but lack the skills and resources to efficiently operate short-lets, and that is where we come in.
In terms of geographic expansion, we believe that we have built both the brand and tech to support our expansion. In existing cities, we have a solid setup with services providers and teams on the ground. We do realise that replicating this success at a rapid pace relies on highly entrepreneurial teams on the ground that are solution-oriented day-in and day-out, so partnering with the right kind of talent and the right incentive is key. Whether through supporting existing third party property managers, through franchising, or setting up new cities on our own, we’re confident that we can expand successfully the GuestReady services and quality across the world.
PTM: During the last few months we’ve seen the leisure markets fare better than urban – how has this impacted your own strategy of inventory diversity and what’s your view on the recovery of the urban markets?
Alex Limpert: This is true. Earlier this year people spent time away from crowded cities and moved towards the countryside. This was mainly observed in the Spring though, when COVID-19 was still perceived as new and the fear level was high.
At GuestReady we have been urban centric, not that we don’t believe in rural opportunities, but they come with their share of operational hurdles. Through the crisis, we have learned a lot about expending in a more agile way, working exclusively with partners on the ground whilst keeping our own operations centralised. I believe that this will enable us to soon look beyond urban areas, and ultimately our vision is to provide amazing accommodation options all across the world. This plan was formulated a long time ago, the pandemic has simply served as an accelerator.
Regarding the future of urban markets, I believe in a rapid recovery as soon as the travel and local conditions improve. We already observe a strong traction in medium-term lets, driven by people remote working, and forecast a significant bump of travellers booking short stays in the future. Many people, myself included, had travel plans that have been put on hold, and look forward to making them happen as soon as possible. At the same time, a lot of properties in the short-term market have shifted to long-term lets, meaning the supply will be smaller than it used to be and this will lead to both an increase in occupancy and average daily rates.
PTM: Finally…….. given the challenges of 2020 and the global pandemic, what have been the resources, both personally and professionally over the last few months, that have helped you the most?
Alex Limpert: The last few months certainly were a time of high stress and pressure levels. At the same time, remote working has made it much easier to stick to healthy routines. I asked myself how could I best deliver for the team, investors, and partners. I came to the conclusion that to make the best decisions possible, as leader of a company it is my duty to stay in good condition and look after my own mental and physical health. Not that this was not on my agenda pre-2020, but it’s harder to follow such habits when you’re traveling around the globe.
Facing such a dramatic crisis as a leader is not a pleasant experience, nor is it as a private citizen. However, this also came as an opportunity to self reflect and grow. I have the chance to benefit from a strong support network between family, friends, other founders, and the GuestReady team. Exchanging with others was most likely the most precious resource of all.