The Importance of Diversification with the Founder & CEO of Newman Hospitality, Andy Newman

Speaker 1: 0:00

We'll start the show in just a minute, but first a word from our premier brand sponsor, casago, and co-sponsors, guest Ranger and Good Neighbor Tech.

Speaker 2: 0:09

Casago's founder, steve Schwab, has been quoted as saying you can only be a local in one place. This simple yet profound statement is the basis of Casago's franchise model, which allows locally-owned vacation rental management companies the ability to compete at a national level by leveraging the system's software and support buying power of a much larger organization.

Speaker 1: 0:28

As a Casago franchisee, you have the freedom to run your business with the support of a community of like-minded professionals, while leveraging the economies of scale and buying power to increase profitability and reduce operating costs.

Speaker 2: 0:41

Guest Ranger is the premier guest screening and charge back protection solution. Leveraging AI, their tool effectively detects fraudulent activity, fake IDs and underage guests, while also performing comprehensive, dynamic background checks. With Guest Ranger, businesses can rest assured that their customers are safe and secure.

Speaker 1: 1:00

Good Neighbor Tech allows you to manage your properties remotely and intelligently, protecting your owners and your guests. Their smart Wi-Fi locks allow you to provide temporary access to home and garage from anywhere and keep track of when guests and service providers are in the property. Good Neighbor Tech provides the ability for you to collect email addresses from all guests staying in a property, not just the one who booked the reservation. Every guest who connects to the internet will see your branded welcome page and be prompted to provide their email address in order to connect to the Wi-Fi.

Speaker 2: 1:29

Visit casagocom forge slash franchise guest rangercom and goodneighbertechcom for more information.

Speaker 3: 1:37

Welcome to Alex and Annie, the real women of vacation rentals. With more than 35 years combined industry experience, alex Hussner and Annie Holcomb have teamed up to connect the dots between inspiration and opportunity, seeking to find the one story, idea, strategy or decision that led to their guest's big aha moment. Join them as they highlight the real stories behind the people and brands that have built vacation rentals into the $100 billion industry. It is today and now it's time to get real and have some fun with your hosts, alex and Annie.

Speaker 1: 2:14

Welcome to Alex and Annie, the real women of vacation rentals. I'm Alex and I'm Annie, and we're joined today with Andy Newman, who is the President and CEO of Newman Hospitality Group. Andy, it's great to see you today.

Speaker 4: 2:28

Thank you, nice to be here, absolutely, I really appreciate your patience.

Speaker 2: 2:32

I really find that I finally get to talk to you.

Speaker 1: 2:34

Yeah, so a little bit of a rocky start, but we finally got this organized. We're just excited to have a conversation with you today and learn about Newman Hospitality and just how much you guys have grown. I think you've got a really great operation down there in South Florida and then also in Charlottesville right in Virginia.

Speaker 4: 2:55

We're in Northern Virginia and Sturgeon.

Speaker 1: 2:57

Yeah, virginia, okay, great, and we're in.

Speaker 4: 2:59

Indiana.

Speaker 1: 3:01

And Indiana. Okay, wow, oh, such a mix of locations.

Speaker 2: 3:05

Yeah.

Speaker 4: 3:06

Yeah, it is, and it's a mix both in geography, but also in culture and economy and seasonality, and it sounds and it can be very inefficient to have three different operations. But it's actually really good when it comes to risk management and we're very happy to see that because it means that we can hire and retain people year round. We're not a seasonal operation that needs to ramp up for specific season and then lay people off and pray that you can hire them back the next season so we can keep people year round. But also we work a lot with investors and we have been saying from the get go because I came from banking, where risk management was key, especially with my type of clients we have been saying from the get go that you can't just have everything in one block and one building because your risks are very concentrated. It's like in the stock market if you own all technology stocks or all small stocks, you can take a big hit. What we've done by doing this is that we started first in Florida. I don't know if you realize, but if you just separate two homes in Florida by about 50 to 70 miles, you reduce your climate risk by half. Yeah, yeah, and if you remember some of these storms, especially Dan coming from Panama City. You remember some of these storms. They're headed and you're not sure where they're going to hit, but at the end they hit really hard. They punch one area really hard and there's other areas 20 to 50 miles apart where they actually benefit, because the people that were vacationing in the area that got hit have to go somewhere else. And then there's all the people that have to come in for rebuilding and reconstruction and they need a place to stay. So we had a recent client who wanted to put everything in Naples and I said to her let's just put one home in Fort Lauderdale and she did that because that hurricane came, it hit, her property was really affected in Naples and yet Fort Lauderdale did very well. And then. So when we take it a step further and separated, not just in the state but out of state, then it's interesting because you're mixing up the seasons. May really plummets in South Florida, but it does really well in Indiana because not the Kentucky Derby, we've got the Indy 500, and Indiana is pretty strong throughout the summer and into the fall, when South Florida is not great at all, the ADR is just plummet. You can have decent occupancy, but the ADR just gets shatter.

Speaker 2: 5:51

So I want to really dive into that. Just having lived in Florida and I've been in management companies, will do that as well. But I'd really like to hear your backstory Like how did you get because you said you were in finance like how did you get from finance into the vacation rental business?

Speaker 4: 6:05

It was very gradual. I left the big banks, I started my own firm and I still needed to travel to places like Zurich, new York City big cities with big pricey hotel costs. So I started doing a little bit of research and I can be a bit adventurous, so I used to love to travel with a backpack. Did that, I did a junior year abroad. So the whole thing about international travel and culture is part of YM. So I discovered this little known company back then in 2012, airbnb and I started traveling and staying in Airbnb In Zurich. I stayed in a yoga studio that would converge into a place to live, so you'd wake up in the morning and do yoga.

Speaker 1: 6:46

Wow, we're going to work at 10. Wow, that's a long time ago too.

Speaker 4: 6:50

Long time yeah, a long time ago I was intrigued. I started as a traveler, I started tasting the product and then I just I liked it so much that I started to host for friends and family for free. And I did that for about a year and a half and once I felt that I had learned, I was still running my money management business. I also had a coaching business and I said, okay, let's do this as well, let's make this official, let's hire. And I discovered Verma. I discovered VRMA and I said interesting, airbnb is only one angle, but these other people have been around much, much longer. They know a lot more about hospitality. One thing might be an interesting software, but another thing is decades of hospitality work. So I said, let me put one foot there. So that's how it all started. I realized that I needed to have infrastructure, that even though I had five or six homes, I needed the PMS and I needed to start going to conferences. That's how it started, really very slowly, and it's crazy because my finance business was international, so a lot of my background and my clients were international. So within six months, I had houses spread all over the planet. I was in Morocco, I was in South of France. Now that was completely inefficient.

Speaker 1: 8:04

Yeah, but probably a lot of fun. Yeah, a lot of fun.

Speaker 4: 8:07

Yeah, let me tell you when you get a call from a British tourist wanting to go to your house, asking me if his 18-year-old daughter is going to be safe and asking me about what are the rules on alcohol. Yeah, it's definitely exciting. You'll learn a lot. And, yeah, you learn about the cultures of each place and how different France is still stuck in the seven-day model. In a lot of parts of France, Saturday to Saturday. So I started it. Yeah, when I started to have these reservations on a Thursday, the owner called me up Kennedy, what are you doing? What do you mean? What am I doing? Reserving your home? No, that doesn't work here. You don't do Thursdays.

Speaker 1: 8:47

Yeah, that's such a good point. I've definitely been through that in my market here in Myrtle Beach area that I think it was probably about maybe not that long ago, maybe four or five years ago, the companies started opening up to not just doing Saturday to Saturday, but there are still a lot. That is all that they still do, but as long as we could keep them between the two Saturdays, that's the main thing, so you don't break up two weeks and obviously when you do that, you're able to really rapidly manage a lot more revenue for your homeowners doing it that way. Yeah, it's interesting to see how much has changed and that just traditional model is just not what it was. Yeah, so tell us, how many properties do you manage, andy?

Speaker 4: 9:28

We have about 130 right now. So we've been in a program. We were very focused on growing and then we became really focused on getting rid of properties not having. I decided that there were three basic qualifying elements One was the property itself, second was the location and third was the owner. So those three were bad. We had to get rid of them and in the beginning you're all afraid of getting rid of an owner. There's always this fear that, oh, you're losing out on something and it's You're never going to get it back and you want to cling. But once we started it was fantastic, because in most businesses the bad business, the bad relationships, take on a lot of bandwidth. They really diminish your creativity, your enthusiasm. It's more than just revenue. So we started on that bandwagon and just started doing it more and more and it's been great. It really has. And I think when you do it and you do it for the right reasons, then you start to get really clear on what you want to bring in and how you communicate to new clients and you get a lot more confident about it as well. In other words, let's see if we're a good match. I'm not sure if we're going to end up working together. This is what we need to see happen for you to be able to work with us. And that psychology also is crazy. It works when you don't sound too excited about bringing someone in, they get very excited about joining you.

Speaker 1: 11:07

Yeah, yeah, exactly.

Speaker 4: 11:09

It's almost fun dating.

Speaker 2: 11:11

The conversations of it's not you, it's me situation, I think, with owners. In my experience, though, too, when you do allow some of those and I always use the term prickly but you allow those people to hang around, it spoils everything, because other owners start to feel like if they're going to let that guy hang around, then they really maybe you're not going to do the best service for me, and so having a good intention around the way you manage your owners has so many great downstream effects, not only for your team but for your ability to grow and be respected and trusted within that owner space.

Speaker 4: 11:47

Yeah, I agree 100%. It's even for the owners, for the good owners, because the bad owners, they take up all your resources that you're longer giving to your good owners. It's yeah, no, I agree, I agree 100%. So, yeah, so we're focused on those two things on growing our business, and we grow our business. We do a lot through real estate, meaning we have relationships with realtors. I was very shy about that at the beginning because at Verma conferences everybody said, oh, you don't want to be seen that you're competing with realtors because I'll talk to your new business with you. So I believe that. And then I was very, I was walking on eggshells for a while and then finally I said enough of this and I never lost really a realtor relationship because I was a realtor. I make it very clear that my real estate business is strictly connected to short-term rentals. We don't seek out listings and we give realtors a lot of value. We give them underwriting services and we help them selecting. We talk to them about regulations. We will hop on calls with their clients. So we help enhance their team and they give us guests and they give us management and we're also starting to get very structured about compensating realtors as well for those referrals and they really like that. That always makes a difference. So that's a big part. Decorators we got a lot of business, a lot of business from decorators and we gave them a lot of business to mutual referrals no money exchange this referral back and forth. So that was also really good. And I guess and I will say another one in our industry there's just it bugs me a little bit there's this big Airbnb bashing thing. I have to say we've gotten a lot of owners that have found this on Airbnb. Yeah, and it's actually more sophisticated owners, because they'll look at the area where they just bought a house Okay, let me see who's in that area, let me see a big person, or yeah, and then they're going to read the reviews and if very enthusiastic reviews, they'll call you, they'll look, they'll know how to find. And so Airbnb has been a source of not only guests but a source of inventory. And I always say that my goal is never to eliminate Airbnb, maybe to just balance it out, reduce the dependence, maybe get it down to 40, 50%.

Speaker 1: 14:18

What percentage is it now?

Speaker 4: 14:20

Right now it's about it's interesting, it's about 60% of revenues but maybe 75% of number of reservations.

Speaker 1: 14:29

Yeah, and I think the locations that you're in. That makes more sense that you would be more Airbnb versus VRBO. But what percentage would you say VRBO is?

Speaker 4: 14:38

Verbal is probably. If I look at and I think it's more accurate to look at it in terms of revenues rather than number of reservations yeah, so revenue, I would say it's about 25 to 30%, and the surprise recently has been Marriott, Holmes and Billis.

Speaker 1: 14:54

Oh, isn't that good.

Speaker 4: 14:56

We started talking to them. It took a long time to finally make it work, between the channel manager and all the complexities involved in tying up, but once we did, it's been fantastic.

Speaker 1: 15:08

Awesome.

Speaker 4: 15:09

Yeah, I would say it's. I don't know 70% of what we do with VRBO, which I didn't expect.

Speaker 2: 15:16

Yeah.

Speaker 4: 15:17

I still have. Now I tried Hopper as well and it's yeah. A few reservations here and there.

Speaker 1: 15:25

Yeah, and that's it yeah.

Speaker 2: 15:28

I think the model appeals more to the European clientele and probably not too much to the markets that you have. But yes, as an employee of Holmes and Billis, I am very excited to hear that you're having good success with that. That's great. I know your inventory. I took a look at it. You've got great stuff. It's in markets that are Bon Voy members desire, so it's perfect.

Speaker 4: 15:49

Yeah, that's what's interesting, so you can continue to grow. Yeah, that's been. The other interesting things is that they've come in all over. If I had to pick one area where they seem to be strongest, it's in Naples, but they're coming in in virtually all areas.

Speaker 1: 16:04

That's great, and I'm sure are you using that as a way to get owners and also just to show owners that you're part of this program? I know when I was previously at Condo World and we had been looking into doing HVMI before I left, that was something that I was very interested in for that reason alone of you can't just not everybody can be on that website. You have to go through a professional manager. But have you used that in your marketing for owners?

Speaker 4: 16:30

Absolutely. I'm all over that.

Speaker 1: 16:32

Yeah, yeah, that's great.

Speaker 4: 16:35

I'm going to write about it in my newsletter, but I've had conversations with owners and I really keep it as an important announcement.

Speaker 1: 16:43

Yeah, You've been chosen, yes.

Speaker 4: 16:47

Yes, here's a speech. I tell them look, anybody, anybody can be on verbal and airbeam. The knowledge takes is if you do bad things, you'll eventually get kicked out, but anybody get on and that's. It's not the same thing with with Marriott homes and villas. There's a vetting process, but also the guests really feel confident about the home, unlike airbnb and verbal. They really feel that if it has to marry out seal, they don't need to ask any questions. They don't really. There's not that much exchange before booking. They just come in a book. So for us it's very efficient. They book quickly. We don't have issues with, like we do in verbal, with potential chargebacks, because Marriott is emerging on record and also it's a powerful brand. It's a very mature and powerful brand and stable brand, unlike airbnb. That's it's a newer let's call it more volatile brand. So it's it's an interesting demographic. So, yeah, so I really do make a big point about it to my owners.

Speaker 2: 17:56

That's great, that is good to hear, really good to hear, and I'd love to talk to you more about it off off recording. Just one of the things we want to do is really show the power of being partnered with the brand and what that can mean to you as a rental manager, like how do you grow and how do you make your owners and your guests both feel that you're a trusted, valuable asset to them in the process.

Speaker 4: 18:18

Yeah, no, absolutely that's yeah. That that's key because, adding Mariah, just if it could, if your occupancy can go up Five to ten percent, your ADR is, it has a pretty, it can have a pretty dramatic impact on profits.

Speaker 1: 18:33

Absolutely yeah. Yeah, having that right mix of channels and ones that want to work with you and are able to really Look at it from that perspective of being partners. I think that's everything. And Whether it's a regional player or somebody like a Mariah, when you've just got that same mentality, that's when situation there it's sometimes it's not about putting your properties Everywhere in the world, but it's not putting in the right places with the right companies that are gonna really look out for you.

Speaker 4: 19:00

Yeah, yeah, that's a good point, because some property managers boast about having, I don't know, 20 and 30 and 40 that the reality is. That can be a major distraction.

Speaker 1: 19:09

Yeah.

Speaker 4: 19:09

Yeah, really, to get maybe one reservation from some obscure Exactly yeah manager is really not worth it. I think 90%, 95% of your reservations are gonna come from two to four, two to four or five major companies, otas, and that's what you should focus on. Yeah.

Speaker 1: 19:31

Now your background you said you also were in your coach can tell us a little bit about that?

Speaker 4: 19:37

Yeah, when I was in banking, I on my own, I went into a coaching program that was very focused on how do you grow your business? Yeah, same time, continue to have better life, more life balance, travel more, take more time off. And that was one of the key elements of that program and it really transformed my business and Soon I had the reputation at the bank of being the biggest producer. Who, quote unquote, worked the least.

Speaker 1: 20:09

Nice, like the four-hour work week book. Yeah, you proved out, you don't have to work.

Speaker 2: 20:14

Oh, you work smarter, not harder. Right, you're smarter.

Speaker 4: 20:16

It's like the Tim Farron's. Yeah, our work week was one of the early works that advocated for something like this, and now they're just a whole abundance, volumes of evidence that points to this, that we really and you know what my Business talk about. Why didn't I say this before? But my biggest source of growth, you know what has been the beach kite boarding.

Speaker 2: 20:40

Oh really.

Speaker 4: 20:42

No, and but right, because I'll go kiteboarding. I'll go on a trip to Brazil, a kite safari, and from that trip I got two clients. Two clients that led another six really important science so that today roughly 30% of my revenues come from kiteboarding. And the beauty of it is it's not like the golfing mentality, I'm gonna play golf so I can find a client. No, you're like, I'm gonna go kiteboarding because I love it and because the way I am when I'm doing it, and the freedom and it's just like you're a kid again and you're on this board in the water and you pull the bar and you go off in the air, help me to come back down again. That's that in one piece. But when you're doing that, you're more authentic, you're in a different space and you get with people that have that same interest in a very different way, and so the relationships come easily and Without effort and without this Kind of almost manipulative Networking be approach. I thought that the anise might not be a good thing, but but you know where I'm going with. This is just let's call it very soft networking, very playful, non-manipulative, manipulative networking. So yeah, going back to coaching, that was one of the big things. And then I realized in that coaching program that that that it was really cool to learn all these things about how to be more productive. I like the life element too, so I started to get training for life coaching and then I produced my own program where I combined business and life coaching and I started coaching people in the finance and in different fields. And I did that for about Seven years until the business really took off and I just began to to really I sold my management, my money management business, close my coaching business and just focused on on on children rentals oh wow okay Interesting that's really.

Speaker 1: 22:36

That's a very cool background and I'm sure your team Appreciate having a leader that has that experience that that really has got to say a lot for the culture that you've built.

Speaker 4: 22:46

Yeah, I would say it's interesting how we say certain things and life to surprises you. When I was working in banking I had one assistant and I would always say, but it's complicated enough getting along with one assistant I will never, ever hire. That's got to be the worst thing in the world to hire people. I have magic multiplying the issues, the little issues that I might have with her, by 10 or 20. Here I am now I have 25 people and I love working the people and hiring people. So, yeah, things, things really change and the coaching really did help in dealing with all the issues that we have in Hospitality and how to just be non-reactive.

Speaker 2: 23:26

Yeah, it's important. Can we go back to what we started in the beginning? So your diversification of being in multi-markets, since I had worked for several management companies. I actually started a management company with my husband and some friends and one of the things that we were really keen on was just that being able to balance. So the calendars weren't so heavy in the summer and we were just dying in the winter and just trying to figure things out. So we partnered with some mountain markets and not necessarily we didn't manage the probably just partnered to do like some cooperative Marketing. But I think you you touch on it from a different perspective is it's not as much about it is balancing the calendars out, but it's also reducing your risk, because there are areas of the country that are prone to like California, wildfires, mountainous wildfires. We've got hurricanes, the plenty in Florida and someplace like Sterling, virginia. I grew up in Arlington, virginia, so very familiar with Sterling. That is Completely off the beaten path in terms of a vacation rental market. But my sister lives in Reston and there's people go with DDC and love to stay in those suburban areas. So what was that kind of the? What was the catalyst for you to do this? And again, how? Sterling had really curious about that.

Speaker 4: 24:31

Yeah, both places were really accidentally involved. No analysis, no air DNAs, just a Sweet coincidence. Anise lived in Sterling. She called me and she says Uncle Andy, I'm selling my town home. Don't do that yeah give me two months, yeah, give me two months all rented for you, let's see how it works. And and she was shocked. She's like what, somebody's gonna want to Short-term rent my place and and we tried it in it. It did really well and this was 2016 or so and and it was a very commoditized product. We're talking cookie-cutter town homes and I thought there's nothing special about this town home. If I buy in the same area, same type of town home, I should have the same results and and we did that and we went from basically zero to 20 fairly quickly. We brought investors in. We would Actually do the real estate. We got registered in Virginia for real estate. We buy the properties, decorate them and then manage them. And you're right, yeah, it's very. We get corporate. We get all the cloud people that are established now and in the Sterling area, competing is huge and the Microsofts they all have their cloud computing and so we have corporate people. We have there's a very old stock of housing, so fires are like commonplace and Virginia there's always a short circuit is always something, so we get a lot of the insurance as well, and and there's a lot of Foreign activity. There's a lot of military, a lot of diplomats coming back from Europe that need a place. So we a lot with government. So just being in the DC and the Beltway influence if you're within minutes of DC, you're gonna get action, you're gonna get action. So what I say to my investors is I like to see four to six pillars of demand, and Tourism is only one. We have a whole industry, our industry, that is focused on only one pillar tourism. You. So tourism is one, but then you have military government colleges, you have hospitals, yeah, Traveling nurses are huge.

Speaker 2: 26:49

Yeah, yeah, absolutely yeah, yeah, so that's what I liked about Virginia.

Speaker 4: 26:54

And yeah, you believe it or not, you do have some. You do have some tourism. You do have some tourism that, but it's a smaller percent of our business.

Speaker 2: 27:02

Yeah.

Speaker 4: 27:03

Still. What's interesting, though, is that business picks up in the summer, when our Florida business goes way, way down, so we're still more obviously much bigger in South Florida, but instead of our revenues going down 70%, they go down 25%.

Speaker 2: 27:19

So that's sweet yeah balance.

Speaker 1: 27:21

Yeah, for sure, yeah, quite a bit more balanced. Yeah, talk to us a little bit about regulations, because I believe when I first met you earlier this year at the IMN conference, you were on stage and you were sharing some of the difficult things that you've gone through in these markets. I know for sure in Virginia you've run into some issues, but give us an update on what that looks like for you now.

Speaker 4: 27:44

Yeah, we've had issues all over and we just. What's changed is we no longer live in fear and all the worst things have already happened to us. So what else can we experience? We've already been shut down multiple times. So again going back to my stock market comparison, if you make a bad pick and you buy a bad company where the CEO is an N-wrong guy, I don't know, you remember that's a company that blew up here if we make a mistake, it's oops. You can't do short-term rental. It's not like it disappears. The property is here, the value is still there. You just need to learn to pivot. So learn to. I no longer hire anything. I just say, look, this is what happened and this. These are options. You can go under the radar. Probably not a good idea. I don't recommend it because it'll still catch you and shut you down and probably find you. Or you can pivot and sell it and rent it longer. Or, number three, we can sell and buy it another place. So, if you put it in perspective, the worst thing that can happen is that you need to change and do something and reinvent yourself. That's not too bad. That's not too bad compared to other industries and because we have these multiple locations. We always have a place that is working. So, for example, virginia we love Virginia, but the HOA has been trying to shut us down now for two years and they're probably going to be able to do it. So we're going to have 20 units there that will probably need to pivot seriously and quickly. We take that as a call to action, something that energizes us. We say, okay, we need to come up with 20 units because we might lose these 20. We know we don't 100% lose them. They may go long-term. But even if we lose them, we get a nice consolation price and it's called the real estate transaction. It would too. Yeah, you could do a lot, exactly, yeah.

Speaker 1: 29:50

We've got the right mindset on this for sure. Yeah, the positivity is infectious, and that's so important because really, we see this all over the country, that people are dealing with these issues. It is frustrating, but you have to know that, whatever's going to happen, you're going to figure something out and it might pivot and you might go in a different direction with it. But there's some things that we have control over and some things we don't, and I think, at the end of the day, it's about realizing what things you can control and not worry about the things that you can't.

Speaker 4: 30:20

That's so true. Yeah, and the meetings that I always avoid nowadays when I go to a VRMA are the advocacy meetings, because it's everybody's shaking, everybody's anxiety, yeah, and it's the same stories. So, rather than okay, how do we operate in a business where we're always going to have this regulatory challenge? Yeah, what do we do? And, just like I told you about climate, I can't really divert the hurricanes coming into Florida. Yeah, but I can separate those properties and I can do certain things. So I think that's really what I've applied, and the great thing is just, it's just not fun to live in fear and anxiety. No, no, it's not.

Speaker 2: 31:05

Well, it sounds like you should do a session at VRMA or at a conference coaching people to have this flexible mindset in business.

Speaker 1: 31:12

Yeah, I can create a mindset.

Speaker 2: 31:14

And I think one thing they always say is that you can't necessarily control what's happening to you, but you can control how you respond to what's happening to you and if you have a plan or at least have something in your mind that you can go to and, like you said, pivot instead of just like this mental block of I'm done and then it just becomes a self-fulfilling prophecy, you need to add that onto your coaching. I'm going to tell you that right now. I think that would be tremendous. I love that We've encountered so many people in our business that we talk to all the time that are just like. They just don't know, we were at a conference in Reno it was the Northwest Vacation Rental Professionals for their conference and talked to a lady and I want to say she was in Oregon but it might have been Washington and they were having some really wacky regulation things coming down. But it was just like when she was very, it had just consumed her like from the inside and it was eating her up. You could tell it was just eating her alive because she didn't know what she was going to do.

Speaker 3: 32:08

And.

Speaker 2: 32:08

I think that there are so many people that just need that hope that there are options out there. It may not be a permanent one, it could just be a temporary until everything passes, but if you have something to pivot to, it's not going to be when something in the world not the doom and gloom that other people can paint it out to be- and even as boring as it may sound and as conventional as it may sound, managing long term rentals for us nowadays, that has to be a viable option.

Speaker 4: 32:37

That does. It is boring, but it's also quite stable. I was going to say the stability is there for sure. Yeah, pros and cons for sure.

Speaker 1: 32:47

Just like you said earlier when you were in the finance world, the more diversified you can be as a business person, within either one industry and one type of business, or in multiple businesses. I think you're protecting your future that way much better Awesome. So tell us a little bit about your team. I want to dig a little bit deeper on that. How many people do you have that run the operation with you?

Speaker 4: 33:10

Yeah, I love talking about them. We have 22 people and, yes, we were invited to the graduation of the daughter of my cleaners and this is a story because they came from Venezuela four or five years ago, highly educated, she specialized in human relations and PR, he's a lawyer and they came with nothing. Nothing because they were fleeing political violence. And they arrived to the States and I was lucky enough to meet him. He did some handyman work and I said does your wife, does your wife do something or would she like to work? Because I needed cleaners. And she said, yeah, she might be able to clean. Okay, let's try her out. That was about five years ago and today, and just to tell you, when we first started, one day he calls me and says Mr Andy, the light bulb is. We need to change the light bulb. I said, okay, Alex, buy a light bulb. Mr Andy, I need the money. He didn't have the money to buy a light bulb and we were at the graduation of his second daughter, civil engineer hired by NASA, and so it's so beautiful and that's what we have done. We have really. So we have our employees, but we also have our trusted vendors, people that like them, that we really gave them and they grew with us and we gave them all the business right, Didn't care that we were leaving money on the table, but we were also leaving a lot of problems on the table because we don't follow. They can't show up today to clean. That's no longer my problem. But anyway, they love us, they trust us and we have several teams just like that and Naples lady that's been in the neighborhood for 30 years, the same neighborhood where we operate. She greets the owners, she greets the guests and then the people that work with us we have. They're very much part of the neighborhood. They grew up with my son and daughter here in Western Florida where we had our home and we believe what really our mantra has been a home for everyone, and we mean that because the home has to be, first and foremost, home for our employees, Because if our employees feel safe, they feel cared for, they feel that their stability, that they can grow and master what they do, they're going to put out a lot more and they do, and so I think that's been very key and we've managed to really have an extremely good retention rate. So that helps a lot because people really get to know your portfolio and it really makes a big difference in the hospitality experience, in what they do and their knowledge. So that has been our approach. But our key focus is also balance. In our industry, everybody focuses on, okay, is it vendors or is it employees? I think that's the wrong question, because either one can work perfectly. You could be 100% vendor, 100% employees and they both can work. But to me, the key question is offshore, onshore, not vendor employee, because 100% onshore you're going to have a tough time making a profit or you're going to have to charge your owners so many markups that you're going to eventually have problems with your owners. So we have really created a really nice group offshore, and part of that group is in the Philippines and part of that group is in Colombia, and in the Philippines we have the guest experience people, and in Colombia we have accounting and finance.

Speaker 1: 36:44

Wow Okay, interesting yeah.

Speaker 4: 36:47

And that has worked really well for us. It helps us manage our payroll, but it also allows us to be able to pay really competitive salaries in the States to the people that want to retain. Exactly All of you are talking about offshore so that you don't pay your people in the States money. No, for us it's the opposite.

Speaker 1: 37:05

Yeah, you're paying the people that are here more. Yeah, that makes sense, that makes sense.

Speaker 2: 37:09

Yeah, interesting I appreciate you saying that, because I think that gets lost in the equation. Sometimes people get yeah. They get really political, like how could you do that? Or why didn't you hire people locally? And I'm trying to find a balance so I can pay people the living wage that they deserve, and that's a very fair point to bring up.

Speaker 4: 37:27

And think about it too. If you're not creating that balance, you go out of business.

Speaker 1: 37:33

Your people won't stay. What does that help? You can't hire anybody to draw to business. That's true. Yeah, exactly Now. Do you have somebody that oversees those teams, or how was that actually managed?

Speaker 4: 37:46

That's one bit of a challenge. But so many people are remote, you sometimes wonder are they working Son of the time, 50% of the time? So that's a bit of a challenge and we're working through that to see how we can control that a little bit better. But yeah, we do have. I also have, actually, an HR specialist that works in Columbia and she's been fantastic because she went, I grew up in Columbia, we went to the same high school, american high school so she has the American culture, she works for US multinational and basically she moonlights with us because we don't need full HR. We can get five hours a week, seven hours a week. That's old, but companies our size never think about HR. But there's so many pills to protect the company, to do the right thing by the employee, to interview the right way. So we look at her and we always defer to her and ask her for advice and it's been great and that's what we've been doing in the last year and a half is creating a stronger structure, creating clearer and more defined roles and the other thing about employees, by the way, which I think is important to mention, I don't know how many companies, how many people you run into that have this. We're a family company, so daughter and my two sons work with us and that's a lot of fun. It creates some challenges, but it also creates some really wonderful yeah, and my wife also helps out very frequently in decorating and listening to all the stories Okay enough, and then giving her unbiased opinion. But it's really nice, because when you're having fun and you're having fun with your family, the plan is not the exit plan, like it is for a lot of people.

Speaker 1: 39:41

Sure yeah, the journey is the destination. Yeah yeah, yeah, that's a great point. And also I think you had an interesting point about HR and I think you're spot on. Most companies in our industry really don't think about that early on or even as they're moving along, and it's just, it's really not done well internally. You might have somebody that is technically the bookkeeper or the owner that is overseeing those things and that's really not the. That's not the proper way to do it. As you said, to do the best by your employees, it should be somebody that is outside of outside of things a little bit, that there's that protection that employees can go to them and talk openly. But I know Sue Jones is one, a good friend of ours that has HR for VR, that she specializes specifically in HR for vacation rental companies and a lot of companies use her because it's sometimes it's not worth having a full time employee, but it's right. It's worth doing it right and making sure that you're protecting your company and the people.

Speaker 4: 40:38

But I don't have to remember that, that's. I may want to talk to her at some point.

Speaker 2: 40:43

Oh yeah, she's a wealth of information. Yeah, she's absolutely amazing, yeah. So, andy, one of the things that we ask a lot of the people that we have on is there's a lot of talk around the industry of all the things that are so important. We talked about advocacy, we talked about the importance of culture and staffing, but what do you think is something that maybe we're not talking about, that we should be, or something we need to be highlighting, that maybe we're not doing to the best level that we could be?

Speaker 4: 41:11

Yeah, we talked about some of the elements that we've talked about here I don't think are really commented a lot. We talked about guest experience. I don't know how many people talk about employee experience. What are vacation rental business? What vacations are we giving our employees, I ask? Are we giving them? The two weeks is two weeks Vacation strategy? It's as an industry that's in the epicenter of leisure, we should live and we should breathe leisure, and we understand that. Not only is it good practice, not only can it be good for business, not only can it be good for creativity. When people leave, they come back, they're regenerated. Neuroscience has abundant evidence to point that out, that when people are arrested, they do better, they make less mistakes. So we're really big on adding benefits. We have a four-hour excuse me, four-day work week, not a four-hour work week.

Speaker 3: 42:14

Are you?

Speaker 2: 42:14

hiring them right there.

Speaker 4: 42:16

I believe the thing should be earned, so it's not instantaneous. You stay five years after five years, or do you work week? Wow that's interesting.

Speaker 1: 42:25

Yeah, I like that Second year, you get three weeks.

Speaker 4: 42:28

Third year, you get four weeks. After five years, you can also get a little sabbatical. I believe it's one month. We have full benefits. We have, you know, there's a 401k. My notion and my vision is 401k. Yeah, again. What business are we in Homes? Right, how about a 401k? In other words, how can we help people become homeowners?

Speaker 1: 42:57

Yeah, yeah, oh, I love that.

Speaker 2: 42:59

I love that. Oh my gosh.

Speaker 1: 43:00

Yeah, I really like that.

Speaker 4: 43:02

That's how we all our team do want to have their own short-term rental somewhere.

Speaker 1: 43:06

Right. Oh, that's so cool. I haven't heard of that. Oh, Andy, I'm just in love with your company, I know right.

Speaker 2: 43:11

This speaks to me on some of those. Yeah, I love that.

Speaker 4: 43:15

I think those are the things that really excite me and that I would like to hear people talking. Yeah, I think it's a great idea.

Speaker 1: 43:22

I mean, 401k is everyone has them, but is that really where? If you had to go choose where you were going to put your money, is that where you would put it? Probably not.

Speaker 2: 43:30

Right Not these days.

Speaker 1: 43:31

Yeah, so we should be talking about that more, and, whether it's our industry or just in general, I don't think that it really is probably talked about enough in different ways. And that's a great employee retention and employee acquisition strategy, too, for you to be able to bring people on to show that you really do have a program, that there is something very different about what you offer than somebody down the street, and that's why they would want to come work there. So I think that's interesting and actually I will use this as a little bit of a precursor that you're going to be on a panel with me that I'm moderating in Orlando at Vierma International this fall, and actually the topic that I submitted it was can loop that into it. I talked about how collaboration, culture and creative design come together to form a brand, and I think that that's part of it. Like that is definitely the culture and the thing is that you're offering your employees that is very much a big part of your brand. So that's you'll be a hit speaker yeah.

Speaker 4: 44:32

Yeah, yeah, that's going to be a lot of fun, yeah, and I think that your industry is really in very early stages.

Speaker 2: 44:41

Oh, for sure.

Speaker 4: 44:42

Yeah, I think that people are again. The fear mode is a little bit on because revenues are down. Of course they had to come down after the COVID. No, If you were there two years before, you saw you're like, let's see. We know this is not going to last, but the reality is the corporate sector is moving big time. Thanks to COVID, it's now kosher for companies to send their employees on short term rentals. So, whereas before it was almost ooh, you want to do that? Let me tell you, you're going to pay for it on your own. That was the kind of answer people got before. So demand is going to continue to grow and the bad supply is that's the one that's been getting taken out and that's the one that's really getting hurt. So when I look at our results, we of course our growth is slow, but we're growing despite the revenues being down for our competitors, and not that our ADRs have also come down. But with good price management tools, with good hospitality, you can still get good revenue results and outperform the competition. I think that one of the other things is by having a good culture, you have a really powerful hiring tool, because we're in a good position where people are finding us, as opposed to us having to go and look for people, and this in an environment that's still highly competitive for people. So it's counterintuitive. But I think good practices. And the other thing, too, is that when you're independent and that's huge when you're a family owned company, you are on a it's not long, yeah, you're running it, not an investor that says we're giving it a check at the end of the quarter. No, I don't want to hear about a good bonus for anyone and I want my dividend check. I cannot be profitable one month, it's okay. It's okay Because I know I have a thriving real estate business that can cover a loss for a month, but somebody out there an investor, might not like that. So I think we have the luxury of being able to think medium and long term as opposed to the end of the quarter. But not to say that numbers aren't important. We do. We watch them like a clock and where we've been investing a lot has been in accounting and in getting all the details and getting all the budgets. And the one person that I listened to even though I've never had a conversation with them about selling or buying, the one person I listened to is Steve Milo, I listen and I write down every word he says and even though I run my business for the family and to suit our lifestyle, I really pay attention to all the metrics that are important, because those things are also important to stay alive and to thrive and to do well and to do all the things that I want to do for my family, my employees. So, like a yin and a yang, you don't need to.

Speaker 1: 47:51

Yeah, no, I think yeah absolutely and you're in a good relationship with your family and your family together and your spot on it. And a lot of companies go through that phase of, okay, do we want to take on funding, do we want to pursue this? It's going to enable us to get where we want to go faster and probably more efficiently if we take on the funding, but then we lose control of what that trajectory really looks like, and I think it's better to have that control if, looking at what your goals are and certainly for you, that makes sense for sure Learning to learn more about your business, I knew when I saw you, heard you speak on stage at IAMMN, I was like he's super interesting and I didn't really know a whole lot about your company or you to that point, and I'm really glad that we had the opportunity to chat today and this was actually a good little warm up for the panel that will be on too.

Speaker 4: 48:41

Thanks, yeah, I enjoyed, really enjoyed, our conversation. Yeah, learned a lot also it was good. Yeah, something interesting. Orlando, here's my plan. I actually plan to get there by train, really. Yeah, interesting, now the transit service just opened up from Miami to Orlando.

Speaker 1: 49:03

Oh, that's, right Okay.

Speaker 2: 49:05

Oh, very cool. Okay. So, andy, like we established, you've got people that are searching you out, but for those that don't know where to find you, what's the best way for them to actually reach out to you, to connect?

Speaker 4: 49:16

Sure, two things. One is the website, which is wwwnumonhospitalitycom, and our phone number. You can always call us it's 954-488-2659.

Speaker 1: 49:31

All right, Perfect, and you're on LinkedIn too, so we'll be sure to include your profile link in the show notes. And of course there's that website and phone number in case anybody missed it. But if anyone needs to get in or wants to get in touch with Andy and I, you can go to alexandandypodcastcom. And until next time, thanks for tuning in everybody.