Inhaven Case Study on National Property Management | Ep. 31

Hi, I'm Rachel Alde and this is the hospitality break room recorded weekly in our actual break room at the of both Luxury Rentals offices in Park City, Utah. This season on the podcast, the founder and CEO of Inhaven, Ashley Chang, and her teammate Megan Myers will be joining me for the 10 full episodes. Our theme this season is "Certainty Served Weekly Within Inhaven". This is your inside look at how local property managers are setting new standards and vacation rentals. Each week we unpack the real challenges behind the bed, bath, kitchen and beyond offering practical solutions, myth-busting truths and tips from the field. Whether you're a seasoned property manager, vendor, owner or just curious about getting into the vacation rental space, this series shares the real life tools and stories that bring more consistency to every stay. Powered by a boat luxury rentals in Inhaven, built for those who want to do things better. Hi and welcome back to the hospitality break room. I'm Rachel all day and I have Ashley Chang here today. Megan's not here. We've been having some technological difficulties. So Ashley and I are going to handle this last episode of our third season, which is "Certainty Served Weekly Within Inhaven". And this episode we're going to go through the sort of final recap of this story about the standardization in hotels and what am I getting wrong here? I actually like how should I frame this? The recap. The story of what makes property management successful and why these property management companies have failed. And how we can learn from what happened with hotels or compare to it, right? Okay. So Ashley and I were just at the executive summit in Miami, the VRMA executive summit, which was amazing for a million reasons. And if you don't believe me, just go on LinkedIn and search VRMA executive summit, everybody is so happy and I'm so proud because I worked really hard on that with my friend Tom Goodwin. And the vibes and like the feelings afterward are really good. But what kicked off that summit was Ashley did a fireside chat in the beginning like pre sort of like the evening before the summit kicked off or the afternoon was it, right? And so she went through sort of the follow-up to the last episode that we had here where we talked about all of these points about what's happened in the hotel industry as compared to the vacation rental industry in terms of private equity and consolidation and what that all means. So today was when is when Ashley was going to share with us a bunch of information including the six points that I was dying to hear about, you know, sort of what we can all learn from this. So you want to take it from here, Ashley? Okay. So on our last episode, we explored the rise and fall of the largest vacation rental manager, Vakasa, and also the largest hotel property manager, AimeBridge. And what was fascinating about these two companies is they both followed the same five phases in their company journey at the same time. So what were those phases that we talked about? They both started their journey with really moderate organic growth. And that journey, that portion of the journey was followed by a phase of private equity backed M&A where they really started to grow quite significantly. They both then went into phase three, the exactly the same time where they conducted large scale M&A deals. And this was around 19 2019 to 2021 where they really were charged your growth. So Vakasa went from, you know, call it 11,000 properties under management to 44,000 and name it. So it's peak at about 1500 hotels under management. When they reached their peak, they started to see a lot of owner churn and that was the fourth phase. And then three weeks after Vakasa announced its proposed distress sale to the Casa Go Consortium, AimeBridge announced its out of court bankruptcy restructuring. So it's incredible how closely these timelines lined up and then how closely each of these phases, that they went through the same, you know, key phases. It's crazy, crazy, right? Yeah. And so we talked about, you know, well, is this an isolated event? And we talked about it's not and we went even further back to the last 25 years where we continue to see this sort of same playbook happening over and over again. And a lot of the, and we dispel a lot of the media narratives around these failures. So the media would often say, well, it was the executive leadership team and that's why they failed or two, they would say it's private equity. They're ruining everything. They don't know hospitality. Or the third reason was for, you know, exogenous events like 9/11. And we dispel those myths. So definitely listen to that episode first before we kind of go into, you know, what makes for a successful property manager and why these companies failed. Yeah, no, it's true. And I feel like those kind of comments are still out there, like that's still pretty prevalent of like if you talk to people and let's just say specifically about vacation rentals and like why people think, you know, some of these current mergers and acquisitions are going to work or not. It's really those reasons, like you just said, that people still think that's what it is. Exactly. And so what we go into this case study where we're going to, you know, talk about these six key insights. I just want to remind everyone a bit about property management and the hotel space. The hotel, the hotel industry is structured slightly differently than the vacation rental industry. So when the hotel industry, you have four key stakeholders. One are the owners of the actual physical hotel asset. So the box. And these can be, you know, wealthy private individuals, reats, you know, private equity owners. The second are property managers. So those are the people that the boots on the ground and the people that are actually managing the hotel property. So they are the managing, you know, the front desk staff, the maintenance housekeeping. And they are really the boots on the ground, managing to those property standards. They are not the national hospitality concepts, which is the third key stakeholder. So those are the high etts, the Hilton, the flag on the hotel. So those, those companies really do set the standards, but they rarely ever manage the hotels. So when you check into a Marriott, you're most likely, you know, not talking to any Marriott employee there, you're talking to Boise Hospitality, or if you're at the DC Marriott, you're talking to DC Hospitality or some other hospitality company name. I think that's just so interesting. Like I just think most people don't know that. Right. Exactly. And then they all have, you know, the distribution, which is, you know, booking.com hotels.com. So those are the four key stakeholders in the hotel industry. So as we study the rise and fall of Ambridge and the rise and fall of Acassa, we spoke to, we tried to really get to the bottom of, you know, why did these companies fail and what makes for a successful property manager? And so we spoke to over 30 executives across the hotel restaurant and vacation rental industries. And we spoke to executives that were leading national property management and also regional and local property management, like yourself, Rachel, and we spoke to Rob. And we asked each of these executives, you know, what were some of the keys to your success and the problems that led to your failure? And we asked it, we asked them, you know, why do you think it's so hard to operate on a national scale? And so we summarized our six key findings. And so for each, we're going to go into all those six key findings today. And for each of those examples, each of those insights, we're going to provide real world examples. So they've become very tangible for you as to some examples of success and then examples of failure across the industries. So as we looked far and wide for examples of success stories around scaled national property management, we found two success stories only. And those two success stories were both in the restaurant industry. And one of them is Pandex Press and the other is Chick-fil-A. It's just crazy. So Yagelag Press is a Chinese fast food company and it's owned privately by the churn family. It was founded in 1983 and they have about 24 hundred locations across the U. And so this is fast food Chinese. You find them in malls. You find them, you know, like shopping centers malls. I feel like, I mean, I have seen them like standalone, but it's usually like a standalone in the area of a mall, like shopping center. Exactly. Yep. And then the second is Chick-fil-A. And Chick-fil-A is also privately owned by the Kathy family. They own and manage about 3,200 locations across the U.S. and they were founded in 1946. So two examples. And we're going to, when we share the success stories, you'll hear, you'll hear a little bit more about Panda Express and Chick-fil-A. Okay. Okay. So without further ado, our six key insights that we've got. I'm going to be right back. So six key insights to successful property management. And I'm going to just go through them and then we'll go through each individual in more detail. Okay. So number one, successful property managers have a curated portfolio that minimizes the number of bad apples. Okay. Number two, fewer property owners drive better operations. Number three, properties with similar demand drivers simplify operations. Totally. Number four, your hospitality teams must feel empowered. Number five, your operations should align with the needs of your local market teams. And number six, growth is driven by organic drought growth and not through M&A. So successful property managers have largely had growth driven organically and not via M&A. Yeah. I mean, all of this hits home with me like so hard, it's crazy. And I just, it's crazy. to hear all those points in one place because these are all things we know about. And like some of them we hear a lot about in the industry, you know, I think it was number four where you said like the local aspect to it, like obviously, Costa Go is really focused on that. And that's really important. And so like we've heard that. But then when you put all these pieces together, it's like, "Oh yeah, okay, this is it." That makes sense. Yeah. Let's go into point number one and let's talk about curated portfolios. So the insight, what number one was curated portfolios that minimized the number of bad apples. So we've got a great example, a couple examples here of just success stories. So when we think about curated portfolios, Panda Express does this really, really well. So when Panda Express goes to find a new location, the senior executive team reviews each new location. Right, and they currently have 2400. So it's a lot of locations for you. And they review the revenue projection of that location, the density, the supply chain, only operational costs. And they must through their pro forma must show that this unit will be profitable on its own before they go into it. And so what they'll do is they'll say they'll go into a mall and they'll say we want this location right by the food court. And they will pay a premium for that location. But if they don't get that specific location, they're out. And so when I worked at Tiffany and company, this was the same thing. I would walk hundreds of malls with executives and go through a detailed pro forma. And we would say we'd want this exact location near an entrance or right next to a Louis Vuitton or some high traffic area. And if we didn't get the, it's getting me we're out. Right. We want to minimize the potential of it failing, right? We want to make sure that we're taking on only good, good locations. And so on the flip side of that, let's talk about Ambridge hospitality. So Ambridge hospitality acquired hundreds of units through acquisitions. And some of those units were good. And some of them were bad. Right. And when you, you know, every portfolio might have a bottom 10%. But when that 10% starts to grow to be 20% 30% of your portfolio, you start to take your good employees away from the good parts of the portfolio. And you fix the bad. And so management becomes very distracted by these struggling locations and portfolios. And so through this distraction, you know, causes a lot of failures within. Oh, yeah. Come these, these, these bad apples become toxic and can ruin an organization. Oh no, like I've seen that in my own business. You know, this year, we're actually down like 14 properties in our park city market, which is our biggest market. And it's been a little bit nerve racking because we're looking at our revenue and, you know, revenue is slightly down in luxury. Our revenue is down less than other segments, but like we're down mostly only because we've reduced number of properties. But a lot of the properties that we have reduced is because we have gotten rid of those homeowners because they weren't allowing us to help them be profitable. And because maybe they were causing, you know, too much time suck and not an as revenue and just too much, you know, too many issues, whether it was because they weren't allowing us to upgrade their property or to, you know, to for us to like educate them and let them know about how they could do better with their property in order to get more eyes on it, more happy positive reviews, more revenue and all of that, or, you know, whatever. There's a myriad of reasons. And so we had reduced a number of properties mostly from the park city location. And, you know, that's really scary as a small business owner like because I don't, you know, I'm not like Panda Express or a Chick-fil-A, obviously. And so it's really scary. But, you know, this is giving me the right feedback, which I've heard in the industry for many years. And I knew in my gut that like, especially for the sake of my team and all the time and energy that we spend on what we do, that we have to put it to the best, the highest and best use like with our time and our energy. And so that means the properties where the homeowners want to be in business with us. And they're not just, you know, handing us a lemon and saying, "Give me money out of this." But they're like, "Hey, we're going to do this together. We want our property to, you know, adhere to your standards. We want to have enhancement in our property year after year so that things are better. We want to listen to you when it comes to rates." And so we've really, you know, gotten rid of more properties than we ever had previously. And it has been a positive thing. When I do think it's a scary thing as a small business owner to sort of have that idea. It's one thing to say, "I have a refined portfolio." And it's another to take your current portfolio and actually make sure that you refine it. But this is awesome to hear that like this is one of the signs of a successful company. Yeah. And when you look at, you know, Oswald made some during that, those large M&A periods where they, you know, acquired wind, 9,000 units and turn key at 6,000. I mean, you can imagine how many bad apples they were taking out. Oh, massive amount. That can be. So, yeah, I can lead to a lot of distraction, distraction and eventually a lot of churn. So, interesting. Okay. Tell us more. In site number two, the number of owners is the limiting factor to scaling successfully. So let's talk about this a little bit. So let's talk about a success story here. I'm going to talk to you about a regional restaurant management company that we spoke to. And this owner/manager, they manage about 90 full service restaurants in the southern part of US. Okay. And they were starting to get guest reviews that in reports of mildly messy and low standard bathrooms in the Dallas area. Okay. Okay. And because there's one owner, this one owner said, all right, we're going to send our executive team and we're going to have them visit all of these locations. Yeah. Over several days. And they, they confirmed that these bathrooms were below their standards. And so they made a very quick executive decision to replace 15 general managers over the weekend and promote the assistant general managers just below them. So, a very clear message to the entire organization that, you know, they have standards for their bathrooms. And if those aren't maintained, they're going to find new leadership to lead the teams. And so this is an example of an ability to move very quickly to make changes for your organization to improve the guest experience, right? They can be very, you know, on the side, let's look at Ambridge. So Ambridge has over 300 owners. And rightfully so, every single owner believes their property is the most important asset. Right. And so what happens is, is you have all these different owners pulling resources based on their demands and different directions. You've got these senior executives that are constantly traveling across the country to, you know, appease owners. But they eventually churn because their issues are not addressed the way that they want them to. They can't achieve all 300 owners in the, you know, very unique ways that they need to be addressed. And so this just causes a lot of a lot of a lot of churn. More owners you have, the more complicated the business becomes and you're not able to, you know, maintain that proper relationship with each of the owners. Yeah. Well, and I think like in the vacation rental industry, you know, you're going to have more often than not homeowners that have one property. And depending on the area, the country or whatever, sometimes people have, you know, we've had a homeowner that had 13 properties, but that was the most because in luxury having 13 properties means, you know, you have, yeah, I don't know, 70 million dollars with properties or whatever. But like, you know, from our standpoint, usually a homeowner with more than one property would mean like two properties. And so in vacation rental saying that like 300 owners is your max, you're looking at probably around 300 to like 320, maybe 350 properties. And so I think that's an interesting thing to consider because it's so true. Like each homeowner does take so much time from our team and we, we have to, you know, put so much effort and care into each of those relationships. So when you compare it to the hotel or restaurant industry, it's like, it's so interesting to me. And I think for listeners, it's like a few things. One is like, when you think about the hospitality industry, you really are talking about restaurants, hotels, vacation rentals and even development, you know, and I think a lot of us forget that because we're just so in our vacation rental zone. But I think it's interesting when you're able to look at the bigger picture and consider those different areas. And then also when you're comparing that and you're looking at say hotel versus vacation rental, you know, hotel owners, probably more commonly own multiple hotels, whereas vacation rental owners tend to own one vacation rental, maybe two or three. So that's an interesting thing to think about too about what it means to like have a max, like a cap on how many homeowners you can truly take care of. Wow. And it really relates for me specifically. I think it's, it's sort of unique when you're looking at the luxury sector of vacation rentals because oftentimes the homes that I manage are probably a similar value to some of these hotels weirdly because some of the homes we manage or many of them are $5 million, $8 million, $10 million, $16 million, $20 million value on an individual home. And I think a lot of hotels, depending on the brand and everything, but like, you know, a hotel that's not necessarily a luxury hotel that might be in like a smaller non-urban, non-resort market could literally be the same value of a piece of property as some of these homes, which is so interesting to consider too. So, in Huzanne, and when, you know, I think it will be interesting to put kind of a number or a target number on the vacation rental industry. We don't have that, but when we hold the power industry, we know that it's the number's about 300. You can't get 300 hotels and be successful. You know, Ambridge is the largest hotel manager right now. They have just over 1100 properties under management, and they're, they've just filed for an out-of-court bankruptcy restructuring. and then high gates the number two hotel manager, they have about 560. - Oh, that's a big difference. Wow. - Yeah, but they took on a couple of years ago, about 200 from a distressed portfolio sale. And so we know that just to point number one with the bad apples that they can't be doing well. - Yeah, yeah, yeah. - So really, 300 is kind of that max for the hotel space. - Right. And does that relate, do you think, to vacation rentals and like how? - Yeah, I think it's just how many owners can you have? - Really, right. - Can you keep happy? - Yeah, is it 300? It just depends on how big your team is. But, - Right. - So that the more owners you take on, the more complexities you're introducing to your team. - The other piece of this that I think is just, you know, having heard Ashley kind of present this, Ashley knows in Mike early on in the conference a few days ago and then talking about it again, what still makes me like so mind blown is that, you know, we've, as an industry, when we look at growth, we haven't really talked about what would be a cap of homeowners that you could do a good job for that you could keep happy. We tend to talk about like, well, if I had efficiencies that I could create within marketing, whether that's in the cost of marketing or the execution, then that would be helpful. Or if I had efficiencies in my tech, you know, we talk about it that way, which I mean, that's not something that I would deny, that's important. But, you know, without considering, okay, with efficiencies in tech and efficiencies in marketing and with cost savings and whatever, what about how many owners can I actually truly keep happy and like actually provide the profit and the revenue that they're looking for while still maintaining their house and their investment to the standard that I promised? Like, we don't take that into account enough. I think that we think, well, if we get the marketing and the revenue right, that everything else is right, but it's like, no, that's not true. There's these relationships and we think about the guests, but like, there's your homeowner relationships and your ability to maintain their investment properly. And that is so important. And I just think it's really interesting how the study that you did kind of brought that up through the hotels and how it relates to homeowners too. Sorry, I'm always getting sidetracked. Okay, no, that was the second point, right? Yeah, second point. So the fourth point is my favorite, which is adding properties with varying demand drivers leads to this economies of scales. Okay, so let's look at Chick-fil-A as a success story. So Chick-fil-A has a very limited number of location types. You typically find them right off the highway and high traffic areas. And they have a very focused product offering. It's fast casual food, right? Their menus don't change. And so what happens is that the executives are really able to efficiently manage marketing and operations as, you know, it's every property across the US is relatively similar and they're servicing very similar customers, right? So you can get economies of scale as you add these properties that have very similar profiles. Now let's take another regional restaurant company, or sorry, not a regional hotel company. So this hotel company owned, managed a bunch of hotels, about 15 to 20 hotels in the Los Angeles and San Diego area, right? So urban environments and very similar urban environments. And they decided that they were going to expand to Palm Springs. It's only about two and a half hours away from these patients. However, Palm Springs is 115 degrees in July and they experience periodic sandstorms. And so what the demand drivers to get guests to the hotels in Los Angeles and in San Diego in the summertime were very different than Palm Springs. And so where they thought they were going to experience economies of scale, they actually experienced dis-economies of scale. They had to go and hire additional managers to help with this experience in driving demand to Palm Springs. So, you know, as you think about expanding, we found that the successful property managers expanded where they had similar demand drivers in terms of location, clientele. And they saw that there was many dis-economies of scales as you expanded broadly. So if you went from managing large homes to now managing condos or from managing places near a beach versus the mountains, these are very different customers, very different experiences. And so that's where you lose the economies of scale. I mean, that's like, of course, like I see that in vacation runels. And then we all know that like companies that are focused on mountain markets and then they want to transition into a beach market and vice versa. There's always a desire for that expansion because it's got more variation and it seems like it's sort of a de-rasking in a way, right? Because if there was a hurricane in the beach and then your market is down then maybe you would focus on your mountain and you would have this, you know, back and forth. But I think that it's always proven to be really hard for that to be successful in execution. And I also think I know for me, like I have felt with our company that there's been some pressure sometimes and we've even talked about it within Haven over the years of like do we want to create, you know, like tiers within our company of like different standards. And so, you know, the discussion of tiers in your properties, like do you want to have the same bedding and bathroom and amenities within all your properties or would it be better to have tiered, you know, bed, bath, kitchen, finishes and amenities and, you know, details in different properties. And I've always felt like, no, I want to keep my portfolio, the properties that I manage. I want to keep them consistent enough in the level of property that they are so that we can justify one tier of bedding towels within the kitchen, all that stuff. Because I felt like it's too complicated on my team and on myself and on the budgeting to track, you know, the difference. And this really like backs me up, I feel like, because you know, we do like for a boat, we do manage mostly like larger homes, what we also do manage about like 25 two bedroom condos within this one development. But that development is in a really coveted very close to ski and ski out area. And so that sort of increases the nightly rates for those two bedroom condos to match more closely with what the rest of our nightly rates are for the properties that aren't so close to ski and ski out. And so that's kind of justified it for us. But it's really interesting hearing you say this because it kind of puts it together like a puzzle piece for me. Yeah, I think, you know, more you increase the demand drivers and the complexities, you know, obviously you have to invest then in different products and more team members. And so you lose the economies of scale. So the fourth key point was really the importance of empowering hospitality professionals. So when we spoke to local hotel and vacation rental management companies like yourself, Rachel, we talked a lot about the type of people that you hire and you look for people that have that hospitality gene, right? These are like these wounded soldiers that get killed in that daily by owners, by gas, but show up every day with a smile in their face, wanting to just make someone's experience even greater than, you know, they could imagine. Yeah. Those people need to feel fully empowered to deliver on those great experiences. If you go to the flip side, Ambridge is an example. When Ambridge acquires these new companies, these property management companies, these local property managers no longer focus on the guest or the owner, now they're focused on corporate approval. Thousands of miles away. So they might say, this guest or owner needs this and Ambridge would say, oh, that's not how we do it, the Ambridge way, right? And so these people feel very disempowered to take initiative without this corporate approval. And this leads to a lot of brain drain because your best employees will leave these companies in another local hospitality management company that where they can feel empowered and can deliver great guest experiences. And what happens is then the worst employees stay. Of course, I can help a company with, you know, with low performers. Totally. I mean, I always say that like the hospitality gene is like the person who like gets off on making other people happy. Like they get the dopamine hit from solving someone else's problem that seems impossible. And maybe we get a little dramatic during that, when that's happening. And maybe it's like, you know, maybe that process is it enjoyable in the moment. But the person with the hospitality gene is the person that will always strive to make that guest or that homeowner happy. Like it's something inside of them. They can't go to bed at night until they made the person happy, right? Until they solved the insurmountable problem. And so when, and I've learned this just through trial and error that when you take a person who's like that, they have a little bit of a firefighter gene inside of them, right? Like they have this need. They just, they're driven. And not everyone is like this. Like this is a lot of times like people that have a restaurant background or what I can go into a big thing about this. But people that have that, if you take away their ability to make the person happy, like if you take away that leeway for them to use their own power of choice and oftentimes if you give them good values as a company and they're able to work within the boundaries of your company values, but not, you know, not tight boundaries, but like they can do whatever they need to within a certain framework that, you know, this is what empowers them and makes them happy in their job and makes them come back every day. Thank you, Sir May, I have another type thing. If you take away their ability to go above and beyond to make someone happy, they're not going to stay in that job because that's how they survive. Like this is how they find their joy and their dopamine hit. and we're human beings and we all need that. And so like on a base. level, I totally agree with this point so much. And it's again, it's like, I've always known, I haven't always known this. I've known this over recent years through learning, through having this business, but I haven't had like a great way to explain it. And so I love how you guys have put this together because for me, like I said, it just puts it all in a way that it takes all these really important points and lays them out in a way that like other people could understand. And oftentimes, you know, I just don't have the ability to explain it right. And I think a lot of us in the industry that are veterans like we get this, but we don't know how to explain it. So it helps so much to have it explain this way. And you know, we expect to the CEO of a regional hotel management company. And I loved his quote. He said, in hospitality, you will never win in arms race and systems, tools and processes. Someone will always create a newer, more competitive product. In hospitality management, you win with employees being actively engaged in the guest experience and success of the asset, totally 1000%. This is like when I'm at the conference or whenever conference I go to and people are like, oh my gosh, about I've heard of you guys, like you're amazing. And this is why that I even started this podcast because the whole reason when I first started, it was like I wanted to get my team on here because yeah, like what is it that's so amazing? Like, yeah, we have property management software that we like. We love breezeway. We love in here. We have tools that we use that we love. Like what makes this actually work from our customers point of view? Our team, completely our team. Yeah, 100. Yeah. Yeah. So then the fifth key insight that we learned was centralized operations fail in supporting local execution. So when we talk to local hotel and vacation, mental management companies, they continuously bring up the importance of keeping corporate functions local because this has strategic value. And they utilize basic off-the-shelf technology solution. So, you know, let's talk about when you keep things local, you can create specific reports for your local owners that they might need to see versus, you know, a national report. As an example, you can create specific tools for them that really add value and differentiate you on a local level. On the flip side, Ambra Chaspatality tried to centralize a bunch of different functions, including accounting, tax, and financial reporting. And they, they, you know, took away a lot of the owner reporting that the local hotel managers were providing their owners. This led to a lot of owner churn because the problem with this by changing up the reporting is these local owners might own other hotel assets, but have other property managers managing those hotels. And so now as they were trying to consolidate all the reports from the property management, now that the reports are the hotels that were managed by Ambridge had a report and they weren't able to consolidate anymore. Right. And they're through this. I need to see how all my assets are doing. I need this in a specific format and so that led to a lot of churn. Totally. And then there was this constant struggle of migrating these new hotel assets to the Ambridge IT system. Yeah. So, you know, that usually takes a lot of time. That's a lot of struggle. And so, you know, and you lost a lot of the local needs through that migration. And so that caused there. So really, you know, we saw a consistent theme come up through all our banter views that centralizing operations really fails in terms of local execution. Yeah. I mean, I can hear that too because like my homeowners, these second homes that they have. And again, I know that this is somewhat intensified by the fact that I am in, you know, upper level luxury and so their higher property values. But all of my homeowners feel that their home is the best home in the area where they're house. Like at this almost in every meeting that we ever have with homeowners. Even if it's like a town home, they'll say, well, my town home is on the end. It's the end unit. So, like this is better or mine. So even if I'm talking about a property that's one of a group of properties that are similar, my homeowners, because they're spending multiple millions of dollars on their property, they find their home to be very unique. And I would assume hotel owners can even be the same way where they put all this money into this investment. And they, they feel like this is just really this really important unique asset, whether or not that's actually true, according to whatever factors you're using to compare. And so if you were to do reporting and conversations with your owner, whether they're a hotel owner or a property owner, if you were to kind of standardize the conversations that you're having in a way that's just too much treating it like a unit instead of, you know, and like their home, then that's where you lose them. Because they're like, you don't even care. You just consider me customer number 272 or whatever. And that's not what any homeowner wants to be. And really, if there's a homeowner that owns like a $300,000 beach condo or a $3 million homeowner mountain, whoever they are, probably that investment is, you know, according to like the ratio of that compared to the rest of their wealth, probably significant enough that nobody's going to be happy with that. And I think that's been proven over the years. But this again, it's just another way to explain it like within the bigger framework, which makes it so helpful. Yeah. Yeah. And then the last key insight was large M&A, large scale M&A does not generate returns and actually puts a company at risk. So if we look at Aembridge, you know, they kept growing their debt. And as they continue to acquire more and more companies, those debt balances kept increasing. And that was not sustainable. And eventually they had to, you know, basically they they conducted an ad of court bankruptcy restructuring where they had to write a holler at. And then the Casa, as they continued to acquire more companies, their cash balances kept decreasing. And they essentially were running out of cash, and that's what led to their distress sale. Okay. So, you know, really Aembridge and the Casa failed because of the financial performance, never met expectations. So Aembridge, you know, when when they purchase Interstate, the number two property manager in the US, they were supposed to achieve synergies. And they were supposed to do about 150 million EBITDA. Their estimated EBITDA for this year is about 30 million. Oh my gosh. That's crazy. And then Vecasa continued to miss on their on their projections. You know, they were supposed to be they were targeting to be cash flow free a free cash flow positive in 2023 when, you know, they were actually down 64 million and then had had even similar declines in 2024. So, you know, really the reason that they failed is because they missed their financial projections drastically. Yeah. Well, and I mean, I do feel like that's been my question a lot as I see a lot of private equity come into the vacation rental space. There's there's parts of it that make sense. And then there's always this other side of it where you're like, how can that much influx of money and then, you know, the amount of churn that can happen and the reduction in revenue and profit. And how can that all work out in the end? And it seems like it has become this like really difficult proposition. And so again, like I keep repeating myself, but it really helps for me when you guys do this reporting and you can explain it in this way. It's like, again, I feel it in my gut when I look at how things turn out. But once you lay it out and compare it to these other parts of the hospitality industry, it really makes sense. So there you have it. Those are our six key insights. Obviously, this is a continuing project. This is not the conclusion. We continue to research. But, you know, these were the clear findings we found through all of those in-depth interviews that we conducted. I think it's so cool. I think it's so helpful. I know the people that were there, like at your roundtable discussion, at your, there was a couple dinners you guys put on. I know and I was at one of them and I feel like all of us in the room were just like so enthralled and like grateful to have someone kind of who spent the time to do the research and then report and kind of analyze all of that and, you know, put it in a way that's helpful for all of us. And I think it makes a huge difference. I don't know. Did you get like feedback from people about people that were there and what they thought about all this? Yeah, we got excellent feedback from the fireside chats. A separate favorite session of the three day or two and a half day event. Yeah. Okay. You know, and everyone wants a copy of the presentation. We're just working through it, making a couple more changes to it, but we'll get it out there shortly in the next couple weeks. Awesome. And what's next with all this work that you guys are doing? Oh, that's for our next conversation. You're like, what do you like to know? You know, so we have ideas on how you can create scale nationally and excited to share that. Awesome. Well, I can't wait to hear it. I'm very excited. I feel like this has been one of the more complicated episodes for us to record because I've been traveling. And so anyone who's watching, you can tell that I'm sitting somewhere weird. I'm actually sitting in a phone booth like a like a, what is this called? Like a quiet booth? I'm in the Delta One lounge in the New York. Legorities that look where he has that room? No, which airport. I'm in the big New York JFK. I'm in JFK. Thank you. I'm in the JFK airport in the Delta One lounge. And I have my whole family were traveling to Italy. So we flew from Salt Lake to JFK and then in a few hours, we're going JFK to Milan. But we really want to actually, I really wanted to get this episode recorded. So I just like shoved myself in this little booth. And, um, and after executive summit, I was really tired. And so I sort of felt this cold. So I've been like hack coughing and luckily, will slickers and his team and his wonderful associate Michael from Hospitality FM will hopefully be cutting this episode and editing it. So none of our listeners have to hear me hacking, but I feel bad for Ashley. She might go slightly deaf from me coughing in her ear. But, but yeah, I'm glad we got the opportunity to do this. And honestly, I would have gone to the end of the earth to do anything I had to do to get us to be able to record this because I don't want to keep this information out of people's hands any longer. I feel like anyone who listens and there might be two of you or there might be two million, but I feel like there's no way that you can't hear this. If you're in our industry, invocation Reynolds and not find it valuable. I know for me, like I've said over and over, I'm supposed to say it again. Like this stuff, it's not groundbreaking in and of itself. These six points, none of them are like, what? But when you lay it out the way that Ashley and Mike and in Haven have, and when you take it and you're laying out based on actual research, not only for vacation Reynolds, but comparatively over the history of the way that hotels are managed and restaurants, like that's what makes this all make so much sense and also like have so much gravity for all of us. And then, you know, of course, it's like the way that I am. I'm like, okay. And then what's next? Tell me what to do next. But even just to take this information, it's just, it's so important. And I'm so grateful for everything that you and Mike have done. So thanks, Ashley. Well, thanks Rachel. Yeah. And what your flight to Italy? Yeah, it should be good. It's like me and Rob, my husband, Rob, and then our three kids, you know, 12, 10 and eight and then our O'Pare, who's from Italy. So we're going to see her family while we're there. So it should be fun. But yeah, so this is technically like our last episode of our, um, certainty served weekly with in Haven, but I'm sure we'll have more conversations going forward. And so for all of our listeners, like don't, um, I might, there might be like a week off for the podcast. Like it's possible that there might be a week or two in between when I get back on and start the next season because of this Italy trip and whatever. But I will be back and we'll have another episode. I another season. I think the next season's going to include my husband, Rob and I and then a bunch more interesting conversations, probably including Ashley again, because I am obsessed with all these topics. So thank you to everyone for listening. And we hope that this whole season was super informative. I know it was because I actually heard from people at executive summit who literally like stopped me and hallways and elevators to tell me how much they love and literally Ashley. People have said like they specifically love these episodes with you and Megan. And so I'm just grateful that we all got to do this together. So fine. Thanks for including us. Of course. So anyway, everyone come back and listen next time and until then, um, thanks for listening to the host, Alie Raycroom. Bye.