In May 2019, four profitable, ‘bootstrapped’ European property management companies with a combined inventory of 1700 properties across 17 destinations in the UK, Portugal and Italy merged to create ALTIDO. The merger marked the ‘first of its kind’ partnership property management business. ALTIDO’s mission is to redefine the best beyond-hotel experience through local knowledge and a guest-centric approach combined with a tech-enabled solution.
One year and the COVID-19 pandemic later, much has changed for ALTIDO since the merger but some things have remained. PillowTalk Media caught up with two of the original co-founders; the company’s Chief Operating Officer, Will Parry and Tom Archer, Managing Director of ALTIDO Lisbon to find out how the last 12 months have been, and what’s next for the hospitality brand.
PTM – It’s been exactly a year since the merger of the four separate companies that have made up the ALTIDO brand. So much has changed in the last 12 months, in particular in the last three months. If we can ‘ignore’ COVID-19 for the moment, what were the biggest challenges you faced as a combined business post-merger and how have you overcome them?
ALTIDO: We had grand plans to celebrate ALTIDO’s 1st Birthday at the beginning of this month, but in light of recent events, we moved the celebrations online. The anniversary has prompted us all to reflect on what has been a year full of excitement, challenges and opportunity. It certainly hasn’t been a dull 12 months and every co-founder has been working full tilt to make sure ALTIDO fulfils our collective ambitions!
Our first task, and without doubt our biggest challenge to date, was to fully integrate the subsidiary businesses under the one ALTIDO brand. The list to complete this well has seemed endless at times and included logistics like aligning new working procedures, introducing new software and making new hires to name a few.
The key in overcoming the challenge was to build on our foundations by seeking common ground amongst all (or at least a majority) of the subsidiaries. On top of this, we needed both direction and leadership to ensure we stayed focussed in our joined-up approach.
We were lucky enough to bring Billy O’Sullivan on as a short term CEO to lead us through this monumental task of combining all the businesses on this practical level. Billy brought with him great experience from a similar project in the US he was involved with and he has had a long-lasting impact on ALTIDO.
Crucially Billy, as someone joining as an independent with vast industry experience, was able to get everyone focussed on becoming one business, leaving the old ways and the four old brands behind. By the beginning quarter of 2020, ALTIDO was functioning as a unified business with a big vision for 2020 and beyond. With the onset of COVID-19, Billy had to return to the US, but his legacy at ALTIDO will live on and we are very grateful for his input. The board has now stepped in to run the company until we recruit again.
PTM – Your business currently spans the UK, Italy and Portugal with more locations on the horizon. Obviously operating in separate European countries has its challenges under normal circumstances, but how did COVID-19, which first had an impact on Italy before the rest of Europe, impact your decisions around navigating ‘lockdown’?
ALTIDO: It seems strange to think of it now, but just over two months ago it seemed a unique and extreme measure to put much of Northern Italy into lockdown. Now of course it is the global norm. Although the impact on our Italian business was severe, it did have the benefit of forewarning us and therefore allowing us to prepare somewhat for what was to come.
We tracked the cancellation and booking data very closely in all regions as soon as we realised the severity of what was happening in Italy. We also took the view that this was indeed a worst-case scenario and that tough decisions would need to be made fast across all regions immediately.
Our measures may have seemed extreme or disproportionate at the time to some, but weeks later they were vindicated. This involved cutting our costs drastically and sadly this did include making redundancies.
PTM – We’ve seen many businesses inevitably reduce costs and make difficult decisions during this period of time. What has been the core ALTIDO strategy for moving through the pandemic?
ALTIDO: The pandemic has caused confusion, fear and stress all over the world. The ALTIDO leadership team decided upon a simple strategy with three tangible and clear goals at its heart. We have found this to be the best way to cut through the noise and confusion that our staff and clients were facing in their professional and personal lives.
We have stuck to these core goals throughout the crisis and remind our staff of them at our weekly company meetings. They are Communication, Financial Control and Owner Retention. The goals complement each other and keeping our focus on them has served us well.
We have maintained good relations with our client bases through clear communication every step of the way. Although the crisis has had a major impact on our planned 2020 budget, we are proud of our collective response and remain optimistic about the opportunities once the storm has passed.
PTM – How has your philosophy, that has always underpinned the ALTIDO brand (customer-first, a focus on profitability, building a partnership model of business of ‘stronger together’) changed one year on?
ALTIDO: The short answer is – not much!
We are steadfast in our approach to this industry particularly in championing profit. This seemed counter-cultural at one stage but appears to be very much in vogue since COVID-19 hit.
We also firmly believe that over the long term, shareholder interests and customer interests are fundamentally aligned.
We are using this “downtime” to further develop our value proposition to our customers – guests – and our goal is to be a hospitality pioneer in this space. We believe our merger has proved the power of partnership and our motto of ‘stronger together’. We are actively working on new partnerships in brand new destinations which we hope to be able to announce later this year. We expect in the post-coronavirus world that management companies will be more open to partnerships and we have already seen signs to confirm that.
PTM – What does the future, both in the near-term and further beyond hold for ALTIDO?
ALTIDO: As mentioned, in the short term we have to stay focussed on our COVID-19 goals until some form of normality returns. That is not to say we aren’t keeping an eye on what the ‘new normal’ will look like. Our long term vision is unchanged and we will install fresh leadership to execute this vision in the next 6 months including a new Chairman and a new CEO.
Whilst not underestimating the impact this crisis has had on our industry, we remain optimistic over the opportunities that are presenting themselves and we believe there will be many more to come. In that sense, ALTIDO’s future is as bright as ever. We believe we will come through this crisis in better shape than most, and well positioned to continue our partnership model in Europe and beyond.
PTM – Is the future for the short-term rental industry bleak, simply palatable or positively appealing?
ALTIDO: I would say it’s all of the above depending on who you are! I think in general terms the future is not as dire as some articles in the press would lead you to believe. People will travel again and the fundamentals behind the appeal of short term rentals won’t have changed – if anything they may have increased in a socially distanced world. But of course, it will take time to return to pre-pandemic levels.
For some property management companies the outlook is bleak and indeed we have already seen some companies go into administration and no doubt there will be more. The master lease operators are clearly more exposed and will need to fundraise or pivot fast. The smaller companies may not have the foundations, funds and time to see the crisis out and lastly those previously well-funded companies with very high burn rates may struggle to become profitable quickly enough.
As it presently stands, I think there is too much uncertainty for anyone to say with confidence that the future is positively appealing. That is not to say you can’t position yourself for the opportunity when it does eventually arrive. This is the strategy ALTIDO has taken, we are acting prudently now and are optimistic for the future – when it eventually reveals itself!
PTM – If you could go back to when you started in the short-term rental industry, what would you have done differently? Particularly in terms of technology decisions and operational structures?
ALTIDO: Technology-wise I wouldn’t change too much. We have been clear from the outset that we are a tech-enabled company and not a tech company. We have worked with some fantastic companies such as Guesty, Guardhog and Breezeway who have all proved invaluable partners to get us where we are today.
We haven’t had the resources or expertise to build those kinds of products in house. In the future we may alter this strategy but in a very targeted way i.e. where we feel we need a particular bit of technology that doesn’t exist on the open market.
Operationally I would start with a process driven mindset from the outset. Standard Operating Procedures (SOPs) are vital in our industry to ensure a smooth running service. The sooner you get on top of these the better it is for your staff and customers.
Once you have them in place, never stop refining them and roll out continuous training and education for your staff. At our core our strongest asset is our staff – if you invest in them they will pay you back handsomely.