In Charleston, Co-Hosts Mateo Bradford and John Stokinger connected (in person) at the Data and Revenue Management conference with Steve Milo CEO at VTrips. Love him or love to hate him (or secretly wish you were him), you cannot deny the success of one of the world’s largest vacation rental companies and personalities. This was a big week for Milo and VTrips as 250 million of funding was secured through Hudson Hill Capital to aid in mergers and acquisitions. Opinions will be what they are towards Steve and how he has and continues to position himself in the industry. With that said, no one individual has personally contributed or done more for advocacy protecting the rights of owners, operators, and hosts. A fantastic interview with one of the sharpest minds in the short-term rental space. The No BS Short Term Rental Podcast brings the right people to the table at the right time giving their audience an inside view and real take on the industry like no other.
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Moving And Shaking With Featured Guest Steve Milo
Welcome, Steve, to the show. We are honored to have you on. Thank you for coming on. We are going to dig right in because we got a little time before the conference starts, and we got a lot to cover. Everyone knows who Steve Milo is. Let’s be clear. If you have been in the industry for even a couple weeks or months, you felt this presence within the industry, feared, respected, a force within the industry.
We are going to get to let you tell your story and talk all about it. I’m excited to have you. He is the Founder of VTrips. You have lots of huge news to cover around that. We are going to dig right in. Steve, forgive me for this. I like whatever you will say ahead. Lots of people know you for what you do for the industry. You are frank in your honest opinions. You are essential and no BS person in the industry from my vantage point. That makes some people uncomfortable. At the end of the day, it is the truth. Steve, I’ve never known you to lie.
We will talk about that, but I want to take it back to the beginning. Everyone knows where you are at. We are going to talk about what you did and the huge news for VTrips. It is exciting. I want to start at the beginning. I don’t think a lot of people know your ordinance story. How did you get into the business and industry?
I’m like a lot of the new breed. I got in with one property. I bought a property in Florida, lived in Chicago, and had a full-time job. I was trying to rent it and couldn’t find property management at that point. It was right after 9/11. Believe it or not, a lot of companies weren’t taking on any new properties. They were having trouble renting what they had.
I was in the eCommerce industry. I decided, “There is a couple of these websites.” One of them was Vrbo, Great Rentals, and Rented.com. I started listing it on those sites and started to have a lot of volumes. I built a little website called, at that point, Vacation Rental Pros. I started having more demand than supply. That is where things went. It started with one property. I got to know the business by renting it, managing the cleaning, and managing the operations on my own. Everything I did on my own.
That is a hell of a feat. You are starting with one and 3,000 now.
That is a different conversation. That is why did you go from 1 to 200. Once I started taking on properties more than my own, I became property management because other people wanted me to list. At some point, to make it make enough money, you need 100 or 200 properties to make decent money. The decision from 200 to 3,000 was, I think, I can scale this. I can use technology and look at a lot of the things happening in this industry, which were hosted systems, price management tools, and things like that scale this industry and do it in a way that consolidates companies where it would make sense.
When did that divergence happen? You started with one and probably built up to a couple. When was that point when you knew, “This is something I can do, and I’m going to do?” When did that growth mindset happen for you?
It happened in stages. The first stage was we were a regional company based in Panama Beach or Jackson Blvd. Beach. During the recession, I had an opportunity to buy companies in St. Augustine, in Flagler Beach. It accelerates our growth by buying regional companies. I bought 4 or 5 regional companies.
Can you go ahead and expand the timeline and approximate year? You said this was right after 9/11. This is later, but approximately when was that?
I bought my first property in 2002. I bought a couple more in 2003 and 2004. Other people I know asked me to list their properties in 2005. I had about 25 properties. I quit my day job in 2006. I formed Vacation Rental Pros, and that was right before the housing boom recession. From 2006 to 2009, it was organic growth. We got up to about 300 to 400 properties. In 2009, I bought the first company regionally.
From 2009 to 2014, I bought four regional companies in Northeast Florida, Panama Beach, Jackson Blvd., Palm Coast, St. Augustine, and Flagler Beach. It is a 50-mile strip. I rolled them together. We were 600 to 700 properties at that point. It is small. We were a regional-size company, like many of these companies that are here now at the DARM Conference. We were big for our area. It was an efficient model.
What happens when you are at 600 properties? When do you go, all right, “Let’s go to Gatlinburg? Let’s go ahead and expand from 600.” What is the next step, 600 to 3,000? When was that next?
To be honest, the rental restriction stuff spooked me in the state of Florida. We were in Flagler County, and they are trying to zone vacation rentals out. I had a large amount of vacation property. I personally owned it, and I rented it. The rental restrictions scared me because they were talking about completely zoning us out. We thought we might lose 30% of our properties.
We hired a lobbyist and finally salvaged things in 2014. This was the big fight in 2014 in the state of Florida, where we prevailed by getting at least stopping governments from banning or regulating duration or frequency, but they were able to do everything else. That scared me. What that told me was, “I got to diversify outside of the area.”
I thought I had this great situation, but regulation can happen anytime. That is when I started looking at places like Gatlinburg, Tennessee, as a completely different market. The thing about going outside different markets is those companies were more expensive, and that is where you needed to get funding. I made the decision. Diversification was the way to go, plus a bunch of hurricanes started hitting.
[bctt tweet=”Regulation can happen anytime. Diversification is the way to go.” via=”no”]
You talk about being able to expand in diversification in the regulatory aspect of what you do because you are a huge champion for the regulatory gathering of the industry. At every event, you are helping lead and doing things for the industry, such as getting the common API initiative that you put together. You are unique. When you look at other people grow, you have built a strategy that has been successful for you, but when you look at others in this industry, they haven’t found that formula. They haven’t done the tips and tricks. I remember the first time I went down, and you showed me that.
You are building in these other places. You have done unique things within the space. They differentiate you from other managers within the space. It is more strategic. I want to dig into what that has been and how that has evolved over time. For you to be successful for VTrips, push into where you are now, where you are seeing, and where you want to go with that in the future.
My vision once I started this was to build a hub and spoke. That is different from what some other companies have tried to do with how they have expanded. The expansion is straightforward if it is a regional player and they are assimilating properties into a regional brand. That is easy. I’m here in one market. I’m going to go to the next market down the street. I’m going to roll my brand right in.
Going from Jackson, Florida, to Gatlinburg, Tennessee, to Ruidoso in New Mexico is much more difficult. It requires a hub and spoke and a technology platform. It is hard. A lot of companies have struggled with being able to create a technology platform. Some of the things you were talking about are the process of platforming this industry in a way in which laundry is one of the things that is critically important to scale. You got to have it if you are going to do it.
In each one of your locations, are you building a laundry hub, or is there isn’t one there already? Are you acquiring a laundry hub to make sure you are able to keep scaling and growing in the way they are growing?
You have to have enough size to do it, but in every market we are in, we are thinking about it. If we can’t pull it off, we got independent contractor companies we are working with, but in all cases, we are looking at it, “Is there a point in New Mexico? How big do we need to be to create our own longer facility?”
You have gotten to where you are now, and let’s dive into this news. You have been thinking about talking about it. The news broke that it was Hudson Hill Capital. There is a $250 million investment into VTrips, which is not a small chunk of change. Can you tell us about that process? I’m assuming that you are going to use it to scale, but there have to be some specific directions in that you want to use this capital. Why Hudson Hill Capital as opposed to maybe some other money?
We have been looking to bring in capital for the last several months. Hudson Hill happened to be the firm that I thought was the best fit for us. They are a family fund. We were clear with them early on. We were looking for a minority investor, not a majority control situation. The existing management team and the leadership were critical. In other words, we would need to be able to govern ourselves and not have a minority partner have a lot of governance control over us. They were okay with all that.
We were able to go through a due diligence process. We agreed on the valuation early on. They got a decent deal. I’m sure they are pleased. We honored the term sheet, and we finally concluded everything. What we are going to use the capital for is we are going to accelerate M&A. We believe there is an opportunity because there are a number of sellers, for various reasons, who want to sell. Some of it made a ton of money or valuation. They want to take chips off the table, which is a smart decision for some because this is the biggest asset in their life. They got families. In generations, they can take care of through the sale of these companies.
The other thing is some people are mentally fatigued. It has been brutal with COVID and governments. There are sellers that were like, “I’m done.” There are also sellers that are at a certain point in their life where it is tough to run businesses because of labor shortages and how difficult the guests have become because of all the different things going on with COVID. For a lot of reasons, there are companies that want to sell, and the amount of companies that want to buy has shrunk. That is due in part because Vacasa bought Turnkey and Windham.
Here we are as VTrips. We are an alternative for any company that is thinking of selling and doesn’t necessarily have to sell to Vacasa. We think we can be a strong player in the industry. We can become the number one player through M&A and get into a SPAC or IPO. There is plenty of room to maneuver, and we can be in a position where we can be a different player than Vacasa.
The climate of the industry is ripe for that. One of the things you and I always talk about is business profitability and being able to build a profitable business. One of the things we are seeing now is who did their homework. During COVID, when everything changed, managing has always been hard. It is a difficult thing to do. I don’t think people who aren’t in the throes of it understand how challenging it is in this space, especially with the technology. It is a different world.
It is hard to even find people.
The human capital component of it in keeping that in place, because all of that are cogs that keep the machine running and it running well at a high level, is a challenge. Kudos to you for that. It is interesting to know who is sharpening their pencils and doing their homework. We are seeing the results of that now. We will continue for a little while to see with you making moves and other people trying to make moves within the space and the people reevaluating their stance. Do they want to do this? Are they in this to do it and do it well? We see that transformation in real-time.
What is exciting is you are creating what tomorrow’s industry is going to look like. We know it will be tech-based and customer-centered, but a host of new challenges are coming to you now. That is my question to you. What is the number one challenge you see moving forward for the industry for managers and companies like yourself?
Several years ago, we would have talked about technology, but now it is equally technology and human capital. The human capital component, in some cases, is more problematic than the technology component. It is a tough situation on the human capital front because many of us are operating in resort markets where it is hard to find people for various reasons. Some people don’t want to work. Some people have left. They have moved to other places. That human talent becomes harder.
[bctt tweet=”Two years ago, the number one challenge in the industry was technology. Now, it’s equally technology and human capital. The human capital component is, in some cases, more problematic than the technology component.” via=”no”]
The only way we can combat that is with scale, which helps us. We have expanded our HR group. We now have five people. A few years ago, we had two. We now have someone bilingual working in our department because Latino-speaking workers are important to us, particularly for back-of-the-office stuff and housekeeping laundry facilities where they don’t necessarily have to have English as a first language.
It is harder to recruit them if you don’t speak with them and know where to advertise. We are exploring H-2 and H-1B visas because it is such an issue. We are working on a proposal to build workforce housing in Gatlinburg. That is probably going to take a year to get billed, but to be able to put workers up there. These are things that a company of scale and size can do. The middle management component is not quite as difficult to find, but it is the people that are the lifeblood of the company, which is the operations piece. It is your housekeeping and maintenance workers and stuff like that.
Benefits are another big thing. We have been in a series of conversations with benefit brokers about revamping the way we do business with them. We may eventually be self-insuring healthcare, but the whole goal is to give more to our employees and give them more options and better benefits because benefits become a critical component. More PTO time, more flexibility. These are all things from a human capital standpoint, and last but not least, hopefully, when we are public stock options. We have done some of that with some of our senior-level people. The goal is if we are public, there is going to be much more ability for us to allow our employees to share in the upside of the company.
That is the direction the industry has to go. At the end of the day, people aren’t going to come back to their jobs. The jobs in the back office and the greedy hands-on jobs keep this industry running. For a long time, people were underpaid and neglected. We know the importance of those jobs, but broadly, those people weren’t necessarily taken care of. That is part of the issue that we are seeing right now in terms of why people have left and other things. They have other opportunities.
I will say this to spark it, but it is sad when the government can give you a little check, and that is keeping people home versus being able to go after opportunities that are out there. We have seen that shift. The industry has to change around that space. People need to get paid more. You have to be able to take care of those people, or else it is going to be a continuing issue.
It is not money alone. If it was money, everybody would figure it out. Instead of $10 an hour, I’m paying $12. Instead of $12, I’m paying $14. It would be easier to solve if it was a money issue. It is finding the people who are going to be satisfied taking those jobs. That is why we started to take a look carefully at who were the people in the laundry facilities who liked it there. Who didn’t come in and think this is a job that is beneath them, but it is like, this was a good job? It is a safe place. It is air-conditioned or heated, whatever. It is structured. We come in, and we do our work.
We found people, where English wasn’t their first language, were like, “This was a good job.” They had benefits. It was structured, safe, and clean. They came in and did their work. They could come in as early as 7:00. They could leave at 3:00 or 3:30. We were flexible with hours. We had another shift that was later. They enjoyed it. They were thankful.
The difficulty is where do you find those people where English isn’t their first language? You have to have people who are able to communicate with them. For most of those people, Spanish is their first language. Understanding where you are finding those workers that will be satisfied with these jobs is important.
Housekeeping is the same thing. When we were doing this, we were doing independent contractors. That was great when there was less of a labor shortage because you would deal with an independent contractor, and the independent contractor would find subcontractors. What we found is we need to find people who want to do this. We are going to give them benefits, and what is important for them is healthcare for their family.
That is why affordable healthcare is important, and we are going to give them 40 hours. Every week, they are going to know they have 40 hours, and we will pay mileage and things like that. Finding people who are going to be happy with a housekeeping job is a critical benefit and has become a key component of what makes people happy, particularly people with families.
Let’s talk about middle management and that upper management. What happens when you and the not luxury side of M&A and you’re coming into Gatlinburg or a different community? Name the community doesn’t necessarily matter. X company has been there for several years. They have this management that has been set up, everyone is happy, and VTrips comes in. There are pros and cons in their eyes in a community. How do you look at that?
In my understanding, you are hands-on in finance, pricing, and lots of different things. When you come in, and VTrips comes into a community, they have people that have been doing this for a long time, which is great. This is what happens, and this is business, but how do you go ahead and keep both sides happy and everything smooth in the communities around you to embrace VTrips coming in?
The first thing we found is to be careful with the brand. If the brand is big enough, we are going to use that as the brand in VTrips, the umbrella brand. That doesn’t mean that in Panama City, we are going to have twenty different brands under Panama City. We are going to be at the Resort Collection in Panama City. Resort Collection was a dominant brand. They have been there for several years. In Panama City, we are rolling everything in the resort collection sanction in future companies. In Fort Myers Beach, we bought Distinctive. We are rolling our VTrips brand into Distinctive because they began and have been there for several years. They are successful.
What we have done carefully is, in general, we are good with middle management and down. Middle management typically is the people who were doing all the work to begin with. We are coming in with bonuses and the ability for them to get more money and benefits, which a lot of places didn’t even have healthcare or dental. Now they have dental and better PTO. The workers down benefit as well. We have matching 401(k) and all kinds of benefits.
The key for us is we are giving them more money and better benefits. We need to make sure they are happy. Part of it is not to mess with the middle management. It is to let them run as long as they can run within our system. Our goal is how do we transition them off their software system into a new software system and make them understand this is going to be a better system.
They have to trust that when we move from Springer-Miller to Track, it will be a better system. Springer-Miller was like, “We understand you know Springer-Miller, but the Track is a better system. It is better for your owners, guests, and you.” You have to trust us that we are good at this technology. You are good at cleaning, managing people, maintaining service orders, owner communication, and guest communication. You’re great at this. Let us make sure we show you how much better Track is than Springer-Miller. Barefoot was great, but it is limited. Track is superior. It is understanding why Track is much better.
There is an owner portal, guest portal, nightly pricing, and more channels. All these things are going to benefit your guest and owner because the guests will have more places to find and the inventory available. The owner is going to be happier with more money. You are going to be happier because it is easier to manage the business.
That is the trade-off. It is to try to sell them on the stuff we are going to bring to them that is going to be a change, which is the technology. We are going to try to get them to buy in that the technology is going to be a win for them.
The change period in the industry sucks. People are resistant to change, whatever it is. Think about it also from an institutional level. When you’re changing in an organization, especially through acquisition, we hear it all the time. It is the boogeyman theory. They were like, “They bought us. It is going to be bad.” That is people’s initial response to that. You have to look at what the long-term value is.
We never hear, “What does this transition look like?” I hear about this the entire time as you are going through the acquisition, “I’m interested.” I know it is a challenge. It is hard. You can’t change a culture overnight, and some people aren’t going to be with it. It is a process. Those who have a good strategy and care about their people will be able to do it successfully.
[bctt tweet=”You can’t just change a culture overnight. Some people aren’t going to be with it. But it’s a process. And those who have a good strategy and really care about their people will be able to do it successfully.” via=”no”]
You got to get the middle management to buy in, which is the bonus program. Some of it they know. We are going into large companies. They know that keyless access is a better process than a VIN card. The VIN card is a problem because people lose it. You need to have a desk, whereas if you have de-magnetized. This is ridiculous.
There is a cost to put KABA or Yale locks on every door. It is $1,000 if you are willing to underwrite the cost and put a KABA lock up there. The KABA lock has all the codes, and it has fail-safe codes. If somebody forgets it and has to call our 800 number in the middle of the night, we can give an emergency code. This solves many prompts because you don’t need a front desk. Owners have their own code. Plus, we can track people coming and going. The VIN card is such ancient technology or, worse, a key. We are in places where we are giving out keys. This is terrible. It is getting people to understand, “We get it. It is a headache to install all these KABA locks.”
It is a new thing to think about. They weren’t necessarily thinking about it. Through an acquisition side of things, there are new things that they have to think about, but there are also less things that they have to think about because you’re coming in VTrips, saying, “We got this all handled.” You have these new things, but it is all part of that process of that transition. I talk about this all the time with processes and software. If you dive in with both feet and you learn it, it is going to be hard for a little bit. Once you do it and you do it to our SOP, it is going to be so much better.
That is a leap of faith. That is where you have to be convincing with people and get them to understand, “You go to trust the process.” Having a track record of success helps in that space. The actual theory and practicality are different in that.
Some of this stuff has to be driven from the top down. Giving people a bonus doesn’t necessarily drive it. You got to be able to hold them accountable to goals and what the goals are. You get a bonus, but how do you measure up to your peers? You get a peer working on this project in New Mexico, Tennessee, and Panama City. How are you doing? You are all working more or less with the same resources and timeline. We are working with you to do these projects outside of the season. How are you executing?
That is great, where we have, not necessarily competition, but we have peers where they can talk to each other and can say, “How are you doing this? A lot of it is goal expectation, management, and expectation in middle management. Communicate to their line staff, “Here is what we need to do.” It is critically important.
I want to get into your viewpoint on what the industry looks like in the near future. What is 2022 going to look like? We will see more deals. For the average person in the space, what is the biggest challenge for managers outside of the human capital component? Let’s speak US. We can talk about international later, but what do you see the landscape in the US looking like in 2023?
We touched on the challenges of human capital. That is going to be a problem and a challenge for a while, and the other issue is government regulations. I was talking to someone. He is up in Colorado. It is a headache trying to maneuver around these challenges.” The government says, “You can only put one family per house or property.” How do you even know? What is the definition of family? What are we talking about here?
Who is policing this?
Constantly changing governments, the fact that there are governments that, in some cases, need to determine how many rentals will even allow in a community they are going to restrict. These are terrible issues that are happening across the board. This industry is underfunded in terms of advocacy compared to the hotel lobbyist.
It is a problem because as much as I’ve done for advocacy, it is still a small portion of what we need to do. Unfortunately, there are many people I have spoken to since I have gotten here who are facing significant regulation issues that could zone them out or could make it. New owners can’t get a license to operate a vacation rental, which effectively dooms their market.
We see it firsthand in Atlanta. Over the past years, I have been working with Dave responsibly because Atlanta is going from no regulation to an STR ordinance. We can go into detail some other time. Airbnb was driving it to the point where they were writing it for the city council and writing the ordinance. What they came out with was something that didn’t have any commercial exclusions. I will be honest. It was the most asinine thing I have ever seen put on paper. It was due to the ignorance of the leaders in the space.
Airbnb is driving Airbnb’s initiatives and the lack of additional voices. I was like, “I’m in the midst of this. I’m working with Airbnb. We are working closely. We were trying to put this thing together.” We felt like we were on an island. It was like, “Where is everybody else? What is happening?” This is the city of Atlanta, not the Atlanta metro area.
They built a whole ordinance that was based on just a host. There are no professional considerations. That part was frustrating. If that is what is going on in the rest of these cities in these places, we got a problem. We do need to get together. I was like, “Where is the backup? Where is VRMA? Where is the rest of these institutions for a city the size of Atlanta?” It is a huge hospitality city with a year-round market, whether sports or college. Atlanta is a huge market for STR. What they put out, I will share it with you. It is laughable. In that part, I’m concerned with, I appreciate everything you are doing in that space and everyone at this conference pushing this narrative, but how do we get the rest of the industry involved?
That could be a whole other episode. It is a bandwidth, resource, and capital issue. Part of our goal to get to a public offering or SPAC in 2022 and beyond is to have the capital to start to create our own government advocacy component of VTrips, which is me, but hopefully would be more than me. What we would want to do is work with the other large players in the space. We are starting to see some big players like Inhabit IQ. I see some positive things out of them. Track has been involved. They rent responsibly that whole stuff and focus on things that we think we can have tangible results because we are not going to be able to battle everywhere.
There are going to, unfortunately, be some causes that we are going to have to say, “It doesn’t make sense. There are not enough managers in the Poconos. We are sorry.” There are certain battlegrounds we are not going to be able to take on, but we are going to have to pick and choose where we go. I have been a big fan of doing this at the state level.
The reason why I like doing it at the state level is it sounds strange, but it is a little less political than at the local level, where it becomes extremely driven by local interests, at least at the state level. The state is, you know, in general, a bit of a check and balance between local governments. You can talk to them at the state level and say, “This is a revenue issue. This is a property rights issue. Look at the economic impact that it has on employment. We need some protection.” The local government can’t zone it out.
Another issue is instead of trying to battle at every municipality, go to the state level, which we were trying to do in Georgia. We try to figure out how we can get certain things written into law where we protect the industry, still allowing local government to have some ability to maneuver, but they can’t zone us out.
That is the only way to go that we are going to be successful in this space. We have to be able to lock arms and agree that this is critical to the success of everyone within this space. It is one thing to support it from the outside. Advocacy is great, but going through this experience in Atlanta, working with Dave and the work they have been doing, and renting responsibly.
[bctt tweet=”The only way that we’re going to be successful in the short-term rental space is by locking arms and agreeing on what is critical to the success of everyone.” via=”no”]
Unless we all come together on this, it is going to be a problem for people’s businesses because by taking Atlanta out of this, how are you going to build an ordinance that has no commercial exceptions? They did something crazy by saying, “You could only have 2 plus 1 rentals per person and no commercial exclusion.” Even saying the entities, we are going to have to create all these LLCs. It is a mess. Thank God it is not going through. It was that bad. They had to revise it.
Georgia would be a good example where you go at the state level, and we try to go back and do it again. We tried to do something several years ago in Georgia. Part of it is also we need state chapters. We have a state chapter in Florida and one in North Carolina, but Georgia doesn’t have one. It is going to take at the state level. I hate to be pragmatic about this, but we could fight in every little city in Georgia, or we could go to the state level and try to figure out how do we go to the state level and at least protect inherent rights, which has happened in Arizona and Florida. That is going to be the issue.
There are certain states that are more likely at the state level to allow stuff like that than others. At least, let’s pick off those 10 or 12 states where we think we have a chance at the state level to protect the industry. We can maybe take a look at some of the other ones and say, “Here is what we have done at 10 or 12 of these states. In Colorado, is there a chance you can take a look at what we have done here?”
Getting those preemptive clauses in there is a smart approach. You are right at the state level. Get those preemptive clauses in there. At least you have a framework to allow the smaller municipalities to work around. They have a base to go off of that is rooted in something sensible versus what the emotion of the day is.
Atlanta is what we are seeing. Over the past years, Atlanta has been open. Everyone is freaking out because everyone is coming to Atlanta to party for 2021. That is affecting the ordinances in Atlanta. It is crazy, but it is the reality. We appreciate everything you are doing in that space. We are going to continue to support and advocate here on the show. We are going to continue to push the advocacy part of that.
Speaking of that, we are at the VRM Intel DARM conference, but VRMA had the advocacy thing. It was great. We had one a couple of months back, which raised a ton of money. We raised money. The show was a small chunk of change, but we were happy to go ahead and donate $500 towards a VRMA advocacy fund.
I encourage anyone that is reading about this money, and maybe Steve can go into what this money is used for. For anyone that wants to go ahead and donate even a little bit to the X Fund, this is what it is used for. We will let Steve jump in here. You can reach out to us. We will go ahead and put you in contact with the right people at VRMA.
We have raised over $300,000 in 2022. I started this thing at zero in 2019. It was our first year of advocacy. In the first year, we raised a little over $100,000. With COVID, we raised we made it to $250,000. In 2022, we were already over $300,000. What we are looking to do is two things. Either educational issues like economic impact studies or affordable housing studies rebuke this issue where vacation rentals take away affordable housing. It makes no sense, but this is one of the things that has been commonly espoused as a reason to ban vacation rentals. It has taken away affordable housing. We have to educate people that this is not the truth. The other thing is to seed certain projects like state chapters to get them off the ground and even PR campaigns.
[bctt tweet=”We need to rebuke this issue where vacation rentals take away affordable housing. It makes no sense. We have to educate people that this is absolutely not the truth.” via=”no”]
These things aren’t cheap. Any of these studies are not cheap. They are $15,000. We are in $300,000. It is only going to go far.
That is why you need broader support throughout the industry. This is an issue for all of us to tackle. Shout out to those who are leading that charge. This is something that we all have to get around and push towards because we are all affected by it. I have a question for you, Steve. You are forcing the industry. You are always present. Down the line, when it is all said and done, what do you want your mark on the industry to be? When we look back, and you say, “This Steve Milos here.” What does that look like? What do you want that to be? What do you want your legacy to stand for?
First and foremost, I have built a brand in VTrips that people can hold their heads high and say, “This is a brand of a professional national vacation rental company.” It means something both in quality and standards. Hopefully, once I’m retired, there will be a brand called Hilton or Marriott, and there is the VTrips brand. People recognize what VTrips means. It has value, and it has a lasting legacy.
The second thing is for the industry itself. Hopefully, what people are going to remember me for is my advocacy that we have done things to support the industry to make sure that we are fairly treated by governments. Every year, we keep raising more money. It won’t be hundreds of thousands. Hopefully, it will start to be millions of dollars. We have started to make some real progress toward protecting our industry.
Those are the two things. We could talk about other fun stuff like OTA bashing and things like that. I’m sure people love that.
That is a fair point. Going into the next question, I want to get your honest opinion on the tech space in our industry. Where is that going?
Where we are heading to is more enterprise software systems that are more affordable to property management companies. That allows them to run hosted systems in a more efficient way. Technology is becoming more efficient. We have Track. Guesty received massive funding. Streamline is owned by Inhabit IQ.
In theory, these products can continue to be built. They are better for property managers to use for and our super host. That is going to benefit the guest, the owner, and the principles. We are going to continue to see more niches. Breezeway is a good example. BeHome247 is an example where they are focused on different components, whether it is smart lock, service, or cleaning. That is going to help manage better ways for the guest, the owner, and your employees so that you can manage the business and make it less complicated. We are going to see that.
From the OTA side, we are going to see more ability for companies to do distribution. Google is going to be a big part of this. I’m optimistic about where we are heading. From my standpoint, companies like us are in a good position because we have taken technology and we are running with it as opposed to some companies I have met. They were telling me, “I’m 80% and 70% direct.” I’m thinking, “You should be trying to do everything you can to broaden your base.”
That is going to be technology-based. You are going to have technology in that space. It is going to be huge.
The first time I knew who Steve Milo was when everyone, this is in your OTA bashing days, it was at VRMA Eastern in Miami. You had two big speeches. It was packed to the gills and going out. I can’t remember who it was that day, but back in Gatlinburg, Mateo tells me a story. When he first met you, what was he wearing?
This is a story. This is my second conference in the industry. I don’t know anybody here. I’m in Gatlinburg, Tennessee. I’m like, “How are you doing?” I’m meeting everyone. I’m working for Rented at the time. Shout out to Andrew Rented and everyone there. I was going around. He was like, “You got to talk to Steve Milo. Talk to him. Go introduce yourself. He is someone you got to meet.” I was like, “I don’t know who Steve Milo is. I got to figure him out.” I asked somebody else. They were like, “He is the guy with the Tripadvisor desk shirt on.”
This is why I love Steve. I have this picture to this day. I will send it to you again, Steve, because I have this picture. He had the Tripadvisor shirt with the Grim Reaper holding the Tripadvisor arrows head and a sickle on the other side with a blazer on. I was like, “I love this guy.” At the end of the day, I didn’t know what any of that meant.
It is driving a narrative and a conversation that is welcoming in this industry. Often, people accept things in this space and don’t challenge enough. That is one of the things I appreciate about you and what you bring to this industry. It probably ruffles people’s feathers on the other side of that, but that is good. That is good for us to be having diverse conversations. We don’t want to all be falling in line and being like, “We are going to do what everybody else does.” It is good to have that.
I appreciated that, and God knows, Andrew was like, “Go find Steve Milo.” I was like, “Who is Milo? Where do I get him?” I’m a random guy who was like, “Steve, how are you? I’m Mateo from Rented?” It has been great ever since then. I appreciate the candor in the industry. Whether they love you or hate you, appreciate that check. Sometimes people need that little nudge in the rib that says, “This doesn’t make any sense.” Let’s talk about these things and bring it to the table. Sometimes that is not always comfortable, but we are better off for it.
Being comfortable isn’t necessarily the right direction to go.
[bctt tweet=”Being comfortable isn’t necessarily the right direction to go.” via=”no”]
I have the ability to speak. Not everybody has the power to be able to get up there and talk about something that is bad for the industry. I pick and choose my battles, but there have been some companies that have done some stuff that needs to be called out. I know I ruffled a lot of feathers at Vrbo about match back, but I thought it was ridiculous what they did at that point. It was underhanded, and they eventually backed down.
I’m focused on talking about Vacasa because they are bad for the industry. I don’t believe they are good for the industry. Educating owners who are potentially talking to Vacasa about what it means to sell to Vacasa is important. It means your employees are going to be fired. They are going to destroy your brand, and you probably are going to need to lead the community if you sell to them.
This is a company that was supposed to be at this conference and, without any notice, contacted Amy Hinote and said, “We are not going to make it.” Who does that? They were speaking at this industry event, and they are not going to be here. They have no respect for our industry. Their CEO hasn’t even attended one of these conferences. I’m not even sure he has been to many of the offices.
I don’t know how industry outsiders are going to manage a business that is this complex and requires a level of understanding of operations in people. What I’m talking about is it is not getting money. Who do you sell to? Do you care about your employees? If you say, “My employees are like family to me,” why would you put them in an abusive relationship?
In devil’s advocate, what happens when VRrips goes public? Is that a different story?
Yes, I’m running the company.
That is part of the story. That is not how Vacasa started. When you talk about the beginning of Vacasa, that was a completely different animal and a different organic place. They were people-centered, and everyone you talked to was part of a Vacasa during those days. It was an amazing story, and it sounded like it was an amazing place but, case in point, scaling is hard. It is not perfect.
They sold out, and they lost control of the company. The entire leadership team is completely different than what existed several years ago. Everybody who was part of the original team was let go. Yeah. Anyone with a brain in their name was let go. They were all gone. Instead, it has been replaced with people from Angie’s List and Open Table and people who have no understanding. They say they are a technology company, and they were like Etsy. It makes no sense.
You are in the hospitality space and built from hospitality. That is how Vacasa started too. They are hospitality-minded people, but things have changed.
During this period of growth within our industry, I feel like I’m lucky to be a part of it and to be able to watch it. Several years from now, when we look back, there wasn’t a roadmap. What Steve and Vacasa are doing is trudging their own paths for better or for worse. At the end of the day, what people will look at is what the result is.
We went through this stage of mass professionalization, but it is under the model of the traditional corporate structure. That is what Vacasa did. Their goal is clear within that space, build the monster, keep feeding the monster, and keep growing in that space. You lose people during that. You lose direction in that space. When you completely change and get the organization, you are going to lose all of that. What you are left with is whoever you have in that space driving an entity. We are in hospitality. That is always going to be a challenge for companies to scale.
You talked about looking back several years. Steve has been in this business for several years. I was talking to someone, and I said, “It was a Wild West back then. The gentleman I was talking to said, “It is still the Wild West, but now we have trains.” I thought it was a great analogy because, in the middle of this, everything is fresh and new. We are pioneering and but we have trains now. We have different mechanisms and ways to get there. What is it going to look like several years from now? How do we lay those lines?
Do you have the answer to that?
No, I don’t.
Steve, do you want anything you want to go ahead and leave the audience with?
What is important is going to be the discussion on human capital. How are you going to be able to continue to find people to take on these jobs on the frontline? It is an important conversation, and there is no one answer. In 2021, the biggest challenge was human capital. It is going to be the biggest challenge for 2022.
Next time, we will bring you back because I want to talk about the API stuff. I don’t know where we are at with that, but that is going to be huge for us as an industry moving forward. From a tech standpoint, it is going to be huge. I know you were driving the efforts. I was part of that and supportive of that. We still need it for us to grow as an industry and professionalize as a whole.
The consolidation on the tech front is helping that. The consolidation is helping and is bringing together. Cleaner code is making it easier to go ahead and work this all out. Those are some of the big positive takes from this tech consolidation. You have the PM consolidation and tech consolidation. These are all positive things that are cleaning up some of this messy BS that is out there. In time, it is going to work itself out. It needs to be kept pushed in the right direction. Is that what you are seeing, Steve?
I see the benefits from the technology side of the scale. Some of these companies are getting bigger, and they are able to create some standards. We are going to see a gap, but the new breed of technology that is coming out, the Guesty of the world and Track. GSV is importing huge amounts of money into its tech stack. They are going to put the emphasis on writing clean API, as opposed to what to used to happen, which was everybody had different standards. No one paid attention to it. It is going to get easier, and that is going to make it easier for companies like Breezeway to succeed because they are not having to have a team of developers focus on keeping the API going.
Steve, It is a pleasure, as always. Thank you so much. I appreciate you joining us. Thank you for joining us for this episode and more to come.
Shout out to Amy. I’m looking forward to this conference. Stay tuned. We will have some important announcements about VRMA and things we have going on there. Thank you for reading, and we look forward to seeing you next episode.
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