Pillow Talk is where Abode Worldwide’s founder and CEO, Jessica Gillingham shares musings, learnings and insight about the pioneering lodging technology brands and operators transforming the way we work, rest and play. To receive Pillow Talk directly to your inbox, you can subscribe here.
I’ve just spent a productive few days in Lisbon as part of the IHM RECHARGE event. Not only is Portugal the boom town of Europe at the moment but this event, focused on the hospitality and living sectors, has become my favorite in the industry calendar.
Small, intimate, eclectic — striking the right balance between networking and learning — RECHARGE does something different. It aims to build relationships and stimulate thinking across the core sectors (STR, BTR, serviced apartments, multifamily, coliving, coworking, PBSA, and senior living). Despite the event coming into its sixth year, the merging and blending of asset classes is still a radical notion.
Short-term rentals – the ‘gold standard’ of hospitality without people
At the beginning of the year, I spotted this LinkedIn post by Max Starkov, a hotel technology consultant and strategist. Max talks about how the idea (still purported by many hotels) that guests seek a human-provided experience has been exaggerated. His evidence for this?
He states; “A great example of why guests do not care about human-provided services as much as some in our industry think comes from the short-term rental sector, where the “gold standard” is customer experience without any human contact between guests and hosts, and yet guests are not only not complaining, but gobbling up this “human-less” service and loving it!”
Always nice to be considered the creme de la creme.
The fragmented and bustling tech landscape
I’m sure you’ve all by now seen the very comprehensive Short-Term Rental Tech Landscape map created by the teams at AJL and Peakspan. It’s an excellent visual representation of the 400+ providers clustered in 22 subcategories that summarize the best short-term rental technology.
Two things struck me about the report.
Firstly, I was taken back to a Skift Research 2019 visual representation of the top 100 vendors (suppliers and operators) of the STR ecosystem. In the early days of Abode, I had this printed on the wall of my office!
Obviously, there has been an explosion in services, service types, and sheer number of vendors entering the market. But also notable is that the vast majority of the companies listed in 2019 are still here and still going strong — despite a global crisis, financial uncertainty and the inherent fragility of the start-up tech world.
My second observation related to the vast amount of choice property managers are faced with when looking for solutions. Many may see this from the perspective of a manager. How complicated it is to choose what’s best for their business.
However, I look at this from the vendor side. In such a fragmented and competitive market, the tech companies must work very hard to achieve significant brand differentiation and share of voice to gain cut-through and market share.
The growth opportunity of Serviced Living
According to Savills, London has 3,000 committed serviced apartment units in the pipeline, with the London hotel market seeing a 26.7 percent expansion in serviced living in 2022.
At RECHARGE this week, investors from NERP, AHV Associates, and Round Hill Capital all said their money was on the growth of coliving and serviced living (aka units with living space and kitchens).
Representatives from Eydn and Yays talked about the explosion in the extended stay market. All indicators point in this direction. When pressed about the barriers to growth, supply challenges and high build costs topped the list — hence why retrofits are back in favor.
Not one, but two STR focused Skift events
Perhaps there’s no better indication that the short-stay market is going places than for Skift to announce not just one, but two STR-focused events on the 2023 calendar.
The second Future of Lodging Forum, which looks at the great merging of lodging, will be in London in March and will be themed around the changing guest preferences.
June marks Skift’s Short-Term Rental Summit. Held in New York, the event has the ominous title of ‘After the Boom’….
Does this mean the end of the meteoric rise of STR? No, but perhaps a flattening of the curve. With Steve Milo already a confirmed speaker, no doubt the recent troubles of #VCSA will be a topic of conversation.
Final note — India is the new China
On a continued Skift theme….. I recently attended the Megatrends event, with the editorial and research teams unveiling their key predictions for 2023 and beyond.
I can’t stop thinking about one trend.
I’ve long been mulling the opportunities for hospitality technology in India. Set to surpass China as the world’s most populous nation in 2023, with a much younger population and growing GDP, it’s a market with huge potential for lodging.
According to Booking.com, Indians are emerging as APAC’s most confident travelers, with 86% of Indian travelers intending to travel in the next 12 months.
“The time is ripe for India — which already ticks most of the boxes as a suitable candidate to take over from China as the largest travel source market — to enter the dragon’s space,” says Peden Doma Bhutia, Skift’s Asia Editor.
For hotel and STR tech companies looking for new markets — watch this space!
