May 1, 2023

1st of the Month Bonus Episode: Mergers, Acquisitions & Consolidations…Oh My! With Simon Lehmann

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Simon Lehmann is back for our May 1st of the Month Bonus Episode! As one of the world’s foremost experts on short-term rentals and vacation rentals, Simon is always first to spot emerging trends in our industry. 

In this episode, we delve into the current state of acquisitions within vacation rentals and how the economy is influencing these deals, along with what companies should be thinking about if they’re considering selling. Join us to gain valuable insights into the world of vacation rentals and learn how to navigate its changing landscape. Tune in now!

Highlights of the Episode:
00:43 - Guest Intro: Simon Lehmann
01:18 – The state of the union as it is for vacation rentals
09:54 – Sell now or wait?
16:42 – Foreclosures as an opportunity for buying inventory
21:24 – It's a good time to sell when markets are slowing down
28:01 – Current valuations of deals
32:56 – What should we look forward to?
39:19 – Closing

This episode is brought to you byCasago,Guest Ranger, andGood Neighbor Tech.

AlexAndAnniesList.comto view our top picks for the best suppliers in vacation rental technology and services.

Special thanks to
Rev & Researchfor being the presenting sponsor of Alex & Annie’s List.

Connect with Simon:

Connect with Alex and Annie:
Alex Husner|Annie Holcombe

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ALEX & ANNIE: The Real Women Of Vacation Rentals, make sure to visit our socials, leave us a like, a comment, or share our content with the crowd! Don’t forget to subscribe!



[00:00:00] welcome to Alex and Annie, the Real Women of Vacation Rentals. I'm Alex. And I'm Annie. And we are joined today by Simon Lehman for our May 1st, first of the month. Bonus episode. Simon, it's great to see you. Hi, Alex and Annie. It's great to be with you again. Looking forward to it. Been a long time since we've been able to chat, so I know you've got a lot of things to share with us.
And I think we wanted to start by like the state of the union as it is for vacation rentals. What are you seeing from your lens? Both internationally from the US and internationally for us, from the us So within Europe. Absolutely. Yeah. We have a lot to talk about. State of affairs, where are we? I remember closing.
My executive conference in Palm Beach last year with an umbrella on stage. And I said, you know, if they, if it's sunny outside, don't forget your umbrella. And you know, I [00:01:00] think we are now needing a bit of an umbrella out there. Again, I don't want to generalize things, but you know, what we have seen in terms of growth, in terms of performance in ADRs, occupancy, and all other metrics within the industry in 2022.
We were very skeptical that this can be replicated in, in, in, in 23, and we always need to be very careful that we're not generalizing statements and say, you know, it's bad for everybody. It's good for everyone. But overall, I think the market has become a lot tougher. We've seen, we have seen quite substantial softening in performances.
We have seen reduced booking windows. We have seen softening in ADRs and, and potential also occupancies when we were talking to people on planning on 23, 22, 3 budgets, 2023 budgets that were sort of trying to go back to the numbers in 2019. And anything that is better is, is, is great. 2022 was a record year for the industry, without a doubt, in, in, in literally [00:02:00] all markets across the globe.
But now we're definitely seeing a slowdown that will affect the business. And I would be cautious right now in terms of planning for the, for the remainder of the year and then see how certain metrics macroeconomically will turn out in relation to inflation, interest rates et cetera, et cetera.
So have you seen talking about slowdown? I think that one of the things that Alex and I talked about towards the end of last year was that we were definitely gonna see more balanced out towards 2019. Like the numbers were gonna be more in line with 2019 and fearful that some people got a little aggressive.
The last two years and we're gonna think they were in a position to continue to be aggressive in terms of a d r and their policies and, and really not understanding where the market was. And so with that, I feel some people are shocked at the slowdown, the shock that ADRs following the way they are and maybe didn't.
Plan as maybe as appropriately as they should [00:03:00] have. But in terms of, I guess acquisitions and things where you sit on the a j L side, when you're consulting with people, are you seeing a slowdown in people actually wanting to sell from the property management side versus the technology side? Or is there any like big movement happening there that we need to be aware of?
Yeah, absolutely. And, and I think your question sort of has, has two pieces to it. Let me quickly go back to the first piece you mentioned. You know, I think we all would've thought that during Covid in 2020 we all realized that we, we, we need to manage crisis. And we have managed crisis extremely well.
Right? Some better than, some, some less. But overall I think the industry has rebounded very quickly. Asset, light business model. And we were able to To to rebound very quickly. Buses rebounded travel vertical is the vacation rental industry, and I was very confident that will come outta this crisis pretty strong.
But what we haven't done is we all talked about, you know, what do we need to think about when the next crisis or, or slowdown [00:04:00] comes, you know, a square old to get over the winter. We'll always make sure it has plenty of food stacked away somewhere, and, and we need to do the same, right? And, and I'm not too sure if people have really used the good times, the gold mining times to put some to, to put some nuggets under the bed to fuel cash flow requirements through slowdown periods.
You know, we are in a heavy seasonal business in most, in most destinations, and you need cash flow for 2012 months and not just for six months or for your high season. So you need cash flow for the entire time, and therefore you need capital. At your disposal also to go through times where cash flow is negative.
So you have more cost than you have, you have income. And I don't, I'm, I'm not sure yet, but I don't think too many people have really been very cautious on planning that and said, okay, we, we have now had a great year in 22, so make sure we're stashing things away. We're we hang our staff locked in, we have we have our contracts locked in and we've done [00:05:00] everything that we could to sort of.
The risk our business in terms of distribution, in terms of tech stack, in terms of automation, of what you can automate with guest experience and, and the likes. But it seems that we've been too busy to raking it in and making a a very good year, which is great. But now when things slow down, I think we, we haven't taken the, the real measures that we should have in order to accommodate also slower appearance.
So what does that mean for the m and a market? I think what we can see clearly a sign of slow down on the m and a market without a doubt. But for me, that this is twofold. If we look at the us we've had, we've had a couple of. Large companies who have invested quite heavily in m and a, which has obviously the fueled transactions going forward.
One of which obviously is the casa and the other one, I would call it v Tripps. And they have clearly slowed down. The Casaa has entirely slowed down. You know, last year they even the they [00:06:00] have dissolved their m and a team, so that's a clear statement. Hey, we're not making any acquisitions right now.
We want to. Rebound through organic growth and, and do it this way. And, and V trips has also, you know, been extremely focused in, in m and a. But, but now it's clearly saying we're, we're also going to explore some other business models such as owner operation. So when two strong buyers are coming from the market, that means, you know, it has an impact on, on all m and a activities because obviously when, when there's buyers in the market that drives up prices, if there's demand that drives up the value.
Of the businesses and if the two big acquirers are not as acquisitive anymore as they used to be, will have an immediate impact in, Hey, who do I sell my business to and what do I get for it? And, and the same ha in Europe, it, it hasn't not been the same, you know, we have not seen the same amount of transactions that we have seen in the US over the last three, four years.
You know, the market. Is different in terms of structure in the countries and, [00:07:00] and, and the large operators, they're not as acquisitive. They're all profitable. Yes. If something fits perfect in their portfolio, they might buy a property manager in Spain or in France where it perfectly fits, but they're not growing their businesses strategically just by acquisition.
So we never had this type of. You know, massive, with some exceptions. The UK market and the Danish market, very traditional short term rental markets. The, the UK market had two strong buyers, or three strong buyers in the market travel chapter sites and ways. So they were obviously buying up bmc. So we've seen a lot of transactions in the uk.
We've seen transactions in Den Denmark. It's a very controlled market. We have seen the, the local strong players making acquisitions such as Bell Villa and Oyo Don Center. These guys have definitely made acquisition in these markets, but other markets have been less dynamic in terms of m and a because there were not traditional buyers just trying to goble up pieces.
So I think what we're seeing now [00:08:00] going forward is we're seeing even a, a, a further slowdown. I think a lot of people will now think, Hey, do I still get value? What kind of value do you get from my business? And that's always the first question, talking about what's the valuation of my business when the market is not as active?
It's, it's like demand and supply, but then obviously the, the expected multiples of evaluations are not there, and therefore people say, well, I might as, as well wait, or I might as well get ready for it and, and use that time now to, to increase my, or improve my foundation to have a, a more solid business.
See, I've heard from quite a few operators in the states that are considering selling now, and similar that I've heard from a lot of homeowners that are saying they're considering selling their unit now. So you know, is it better to, on the, on the company side, is it better to, would you say it's better to sell now before, you know, we're gonna definitely have a, a, a lower year come the you know, come after the [00:09:00] off season.
Is it better to sell now before that, or. Or to wait. Yeah, great question. I think, and you've raised another very interesting point, and before I go deeper, I think we want to both agree on differentiating the market into professionally manage the R B O market, the r b market, where the owners are. So let me start with that, Alex.
One of my predictions and if, if interest rates go up, this Airbnb owner f. Frenzy is gonna stop cuz you can't serve your debt anymore, right? If, if your ADR is gonna come down, your, your, your rate of invested capital is gonna come down and then, you know, maybe, let's assume you've bought five to 10 of these units and, and you are super exposed and you had a great year because, you know, money was coming in, occupancy was highs, were great.
Now all of a sudden you pay maybe twice as much for them on an interest rate basis. So that means it hals your margin [00:10:00] on what you make out of these houses. And then on top of that, the market slows down. So I think yeah, perfect storm that for, for Airbnb it's gonna be the perfect storm because we will see this, this, this, this Airbnb frenzy of these, these Airbnb owners who used.
That platform to make the maximum, the return of their real estate investment, that's gonna slow down. So that will bring potentially not more supply in the market, but this will potentially strengthen the position of professionally management. Right? Yeah. And I strongly believe. Go ahead. No, no, it's fine.
Please. I, I, I was just gonna do, do you, do you think that they will bring their units to the professional managers, though if they're already gonna be making less than they were used to last year? I mean, now they also have to give up a commission if they do that, or, or are you saying they're just gonna sell and then somebody else buys 'em and puts 'em on a program?
I think we will see different [00:11:00] scenarios. Alex and I would never say that's the scenario we're going to see. I believe there will be certain scenarios where they'll just say, well, I'll just give you to a professional manager. He knows what he's doing and I can go back to my day job or, or whatever and say, you know, so, so I am a strong believer that we will benefit from that, and we have seen that in other financial crisis.
Yeah. You know, Unfortunately, I have a lot of gray hair, and I've been around in 2008 when we went through the financial crisis. Give yourself some credit, you're still a blonde. So when we went through the financial crisis in 2008 in Europe, you know, with the subprime crisis where all these, these, these lending markets just exploded, the, the Spanish banks were sitting on billion of assets of pre private owners.
What happened? The property, the, the professional property management market was flooded. With inventory to rent. So for us, it was great. We had, we had growth like crazy in Spain because we got all these units that we were able to start to [00:12:00] rent because, you know, if, because if, if the, if the market is flooded with more, with more homes, that doesn't mean that the real estate price is gonna, is gonna increase.
And, and so we will see different things. It depends on the market, again, on the destination, et cetera, et cetera. But we will see. RPOs who will simply sell their unit, and it will, it will go from the market. That's one thing we will see. The second thing we will see is that we will see RPOs who will say, Hey, you know, I'm gonna give these my five, 10 units that I've managed now for the last three years, four years.
I give that to a professional property manager and see if they can do a better job than what I, I, I was able to because I need a day-to-day income. And potentially go for a, for a full-time job again. You know, let's not forget how many Rbo os have given up their day jobs because the business was just incredible, right?
Mm-hmm. And then, and then and so the professional managers will benefit. From potentially having more inventory come to the market. But at the same time, it could also [00:13:00] be that certain owners that now professional managers have, have over leveraged themselves. And if you, if you as a PM cannot deliver the same amount of ADRs and occupancy that you have delivered in the last couple of years, maybe even an owner that is.
Is using a professional property managers who may be forced also to, to sell these, so to sell the unit. And if, if, I would say, if a, if a unit is sold, the chance that it's coming back to the market, I would call that 50 50. Either the owner will use it themselves or, or, or, or it will come back to market.
So I would see that being about 50 50. Do you see a company, and I may misunderstand their model, but I believe Highgate is one that's buying inventory and then they're kind of like renovating it and or like setting it up the way they want from a operational standpoint and, and. Kind of the ff n e within a unit, do you see?
Because I remember in 2008, within Florida specifically, there was a lot of short selling and foreclosures that happened [00:14:00] because again, people were over leveraged and they couldn't make their notes. And then, and then they just were like, they just knew they were in a. Spiraling situation where they, it wasn't gonna get any better anytime soon, so they just walked away from the asset.
Do you see that as an opportunity for an organization like a High Gate or maybe even v trips to come in and actually buy inventory to pick up for there to like wholly own and, and manage the inventory? Yeah, I, I'm not too sure if the timing is ideal for that, while, while money is more expensive. Number one, while real estate prices really haven't, cor haven't corrected themselves as yet, you know, if more comes to the market, then prices will obviously start to drop When people are more conscious about their own income and their disposable income to say, Hey, I might as well to sit on my cash right now instead of.
Instead of buying a an asset, you know, we have seen quite a few activities. So Ral Alpha was one who came out very strong into the industry and said, Hey, we are, we're building the largest real estate investment fund [00:15:00] and we are gonna go after buying a large number of, of units and manage themselves.
I think for me it's a matter of, it's a question of scale and do do the math end up. In the right portion. While interest rates come up, you'll still need to have very clear metrics in how, what, how much ADR you can make, and how much occupants you can achieve on a unit depending on your invested capital.
So I'm not too sure if owner operator investments and large funds are now the ideal time to come into the market where you pay more for the money that you blend on one side. On on the other side, the metrics are going down. You might need to reinvest in some refurbishment or whatever, and it's capital intensive it, it could be very tempting because you want to be less reliable.
On, on second home ownership relationships with private owners, and you want to manage your own assets. That all makes a ton of [00:16:00] sense. But that makes even more sense if you're, if that is happening in a time where the market appreciates. And the question now is really going forward, is the market appreciating over time still, or is, or do we see a correction in valuation on, on real estate or leisure real estate?
And maybe in six to 12 months time when we see prices going down, then real estate funds come in and buy up. A larger number of, of units would make a ton of sense. I think it's too early to say if, if owner operating large investment funds are now coming into the market to go up units because you know, they still need to deliver quite an aggressive performance to outperform even the long term rental market as well.
Mm-hmm. Sure. Yeah. Interesting, interesting. Before we came on the air, we or, or I commented that the notebook that I'm using is one that I had last year that somehow it got recycled, but our notes from last year on the May 1st of the month, bonus episode that you joined us on, talked about how at that [00:17:00] point, ADRs were up 15% over 2021.
And booking windows were up 14% over 2021. And you know, obviously that's, that's changed now. We've gone back, you know, much more closely to what it was in, in 2019. But it's, it's, it's easy to forget where we were and just, you know, think that just where we've been the last couple years is just standard.
But obviously, obviously it's not, and, and I think in a lot of markets, We saw homeowners that really invested back into their properties, which is a good thing. You know, they're probably a little bit upset now, like they might wanted to have saved that money, but at the same time, those are good investments for the future of the property.
But I, I would say, I mean, for companies that are thinking about selling, if you still like this business and you still wanna be in the business, this is gonna be an interesting year that you'll be able to pick up more inventory, like Simon said. There's gonna be a lot of different shifting around. And if you, if you can hang in there, this is still a great business to be in and it might be [00:18:00] too early to throw in the towel.
Absolutely. So let me get, come back to the second piece of your question, Alex. Is it a good time or is it not a good time? When you know, when, when, when? It's always. We can go back to Warren Buffet. You know, one of, one of his biggest quotes is, don't be greedy. Right? So, I love that one. Mm-hmm. And this is a challenge with any investor, right?
So when you see the market going up, you will say, oh, I, I'm hanging on. Hey, they're paying maximum amount, they're paying big bugs for these property management companies. I'm, I'm on fire, I wanna continue, and then, you know, I'm gonna sell for more. So they hold back. Others say, Hey, I'm done. The market is ripe.
Excuse me, I wanna sell, so let's do it. So we've seen a lot of that in 22. I think, you know, market was good, forming was happening and people wanted to bring that home. So that, I think, you know, when, when you're in a market where, where you overall [00:19:00] interpretation is that I'm getting good money from my business now that I've worked for, for the last 10, 15 years, never had a holiday and, and, and everything else.
It's a good, a good time to sell when markets are slowing down, then you have two type of sellers, right? One is okay, I'm gonna go through this and improve my business. To your point, so I have now, and I would agree with you, I think at the moment you have massive potential to get your business ready for sale.
Do your homework, because doing homework while you're super busy, it's very challenging, but. Do your homework while you may be not so busy is a better time. Review your tech stack. Look at your financial hygiene. Do you have everything under the control in terms of your finances and operation? Is, is everything streamlined on your operational costs and expenditures?
Do you, do you run a, be a super oiled engine and now you're ready to get more supply? Because I would assume the supply [00:20:00] growth will be there. Without a doubt. If the market doesn't recover over time, then supply grow, growth will, will drop because then units will be sold. But I think there's still a lot of bet out there that people will say, okay, let's see what I can make with an s t r and, and, and give it to a professional property manager because they can do a better job.
So I think it's a good time to oil the engine and, and wait this through and use that time to really bring your business. To the, you know, to the, to the Champions league in terms of performance, financials and everything else, and, and, and, and get this through others. And I'm not saying the market is not opportune now also to make an exit.
I think there's still a lot of appetite, but it now depends on which, so market segments. So let me quickly go there. One of the things we have seen in Covid, what, what has been the most resilient. Market segment in, in vacation rental has been the upper and the luxury end of the market, right? That has performed [00:21:00] exceptionally well cuz there's always rich people and, and normally in downturns, rich people get even richer in terms of their capital.
So they, so there's definitely enough capital to be deployed or money to be deployed and spend in the upper. Incoming level of the, of the individuals. So the luxury rental market has proven to be extremely resilient and growing. So everybody's running off the luxury. So one thing we have seen, it's interesting, we have seen a lot of in, in the mid to lower end of the market, we have seen more strategic acquisitions, either by the large guys or by somebody in the market who is buying his competitor, et cetera, et cetera.
In the upper end of the market, we have seen more external investors coming in, like private equity. We have several examples like story Lane, like Nocta with with Gladstone, and, and we have seen others, you know, like Collect is in Europe has raised 60 million. Like Cure is also backed by some private equity.
So [00:22:00] there is, in the luxury rental space, there has been a lot of appetite for investors to come in because it's proven to be pretty resilient. Because I net everything, needles, they can always travel no matter what the economical situation is all about. So I think we will see more transactions in the upper end of the market luxury and the likes.
And I think in the mid to lower end of the market in terms of portfolio, we will definitely see a slowdown. And I would more propose the companies right now to get on their homework and, and, and get a stable business and, And, and show what they can deliver even in, in a slowdown market. You know, when you sell your business, you need to provide a business plan anyway, so you can now review business plans of 23 against the actuals in six months time, and you will see that they will not been able to achieve what they've anticipated to achieve.
In terms of their business plans. And when investors come in or a buyer, he looks at what have you done in the last three years in terms of [00:23:00] business. And then they will tell you what you do in the next two or three years with your business. And, and optimism is always, has always a large discount. So I think at the moment, if you, if you, I'm not saying the market is extremely low in terms of valuation, but definitely not its best.And you can still, you can still multiple order. What sort of multiple are you looking at right now? Yeah, that's a great question again and, and really different is, is, is is still a huge variable. Yeah. In terms of size of the business, location, contracts, maturity, business management team, technology, not so much, but there's so many factors that take into the multiples.
I think you could still start at a multiple of, of a four times a B T A. Earnings before interest and tax and depreciation. I think, and every time multiple of four can still be achieved. Only if it's a super small business, maybe less. Yes, we have seen valuations of 20,000 [00:24:00] property companies of 13 times, and that's, that's not achievable.
Right? So I think if it's a good, solid business in a, in a, in a, in a, in a, in a market that. As addressable markets. So how big is the total addressable market? What is your market share in that market? What is the quality of your portfolio? What is your churn rate, et cetera. So there's so many different factors, but I would say the spread in the market today, and this is, I know not a very qualified answer in a way, but that's the spread we're seeing.
We still see a spread between four and 10, depending on all the different aspects of how somebody looks at evaluation of a business. Do you think on that, and I think we've had this conversation before, like looking at Vacasa as an example. Some of the acquisitions that they made, they paid pretty high multiples.
And I think at the time I've just, in my experience being in property management, I just thought that's just not sustainable in terms of return [00:25:00] on investment long term because the market is gonna fall back down to where it was, you know, before. Pre Covid and they were buying things at such a clip through Covid after Covid up until last year.
Do you think that that's part of the, the struggle that they have is that they bought at such a high end, just like we're talking about individual owners who have over leveraged themselves, that they may have just. Bought too much and not really thought about the long-term of those multiples. I mean, I know that they say they have a model and I would assume it's a pretty, a pretty well vetted model, but it just seems like they bought a lot at at a higher valuation that it just wasn't long-term sustainable.
Yeah, I mean, the great question, the way I see the one has nothing to do with the other. So in terms of how much you pay for a business, Does not have a direct impact in how your stock performs or how your, how everything else is going. And, and then you're potentially run outta [00:26:00] cash, you know, for a buyer, if, especially a strategic, so let's use the cost as an example, especially a strategic, what is he looking for?
He's looking at, at increasing his market share in a specific market or have a market entry. So it's either new or an add-on, and he's looking for synergies. And, and there's a strategic multiple behind, right? So, so first of all there's, there's, there's a, a market multiple or a financial calculated multiple, either over free cash flow or there's many different ways in how you can value a business also based on contract, a gross margin per contract, how much you pay per contract, if it's an asset deal.
So there's different ways in how you can value a business, but then, That's what the buyer in, in, in most cases, doesn't talk about what is the strategic value of that acquisition, which then adds to what you potentially pay for that business. And then you can say they've overpaid it, but their mask is telling them.
So if they have a hundred units in one market and they can buy the [00:27:00] competitor of another a hundred and integrate that entirely into the organization and have very additional fixed costs in making that happen. Then there's a strategic value for them that they pay for and, and a higher multiple for that business because they can return the money a lot faster.
So there's two things that are then falling off the, the truck is, you know, what is your assumption on churn? And that's one of the biggest question for strategics. When you buy a business, you need to be, you know, put a comfort zone or, or a comfort buffer into your assumption. How much units is you gonna lose?
And I think they've lost more units in their acquisitions than what they were anticipating in their models. Ultimately they pay too much for it. So if you buy a hundred units and you lose 40, you have 40% churn, right? Yeah. Yeah. And when you make your model of acquisition, you might make your model with, and I would, I always said, [00:28:00] and I've said that several times on podcast and conferences, is that if you do a, if you're a good strategic operator and you have a market presence and an existing market, you shouldn't, you should plan between a 15 to 20% churn.
That you'll lose these owners who will go throw an acquisition. Yeah. Okay. Have you, have you seen that change over the last few years or is that about standard based on if you're an existing operating? I think that's about standards. Yeah. It really depends in what is your model of taking it over, mm-hmm.
And then obviously it very much depends how different the owner contract conditions are, you know? Mm-hmm. I mean, obviously, If the previous company, let's say, had a 20% commission and the new company wants 40, yeah. Then of course the term rate is gonna be a a lot higher. And then owners will say, well, I'm not gonna go with that company.
So it really depends how you handle that, that that contract transition. From, because at the end of the day, the loyalty, and that's as still something that hasn't changed in [00:29:00] 20 years I've been in this industry. The loyalty by homeowners is still driven by occupancy and occupancy and occupancy. Right?
Yeah. And, and, and so, so there's a couple things, but I think they have not, these models have had a far more aggressive, lower churn than what they ultimately ended up with. So you ultimately pay too much, therefore, the. The value that you wanted to create through this acquisition are not gonna materialize because you're only securing.
You know, maybe 20 or 30% less supply than what you've planned in your model and what you're willing to pay for an acquisition. If somebody straightforward pays for a property manager like that, they would never pay that multiple versus strategic multiple who can absorb all the overhead and have more contracts in the destination can considerably pay a higher multiple.
Mm-hmm. But if these assumptions do not materialize, then you end up having paid far too much for it. Right. Right. Now we're gonna be be seeing you or [00:30:00] I'm gonna be seeing you very soon at the VMA Executive Summit. I'm very disappointed that Annie can't make it, but we'll Simon and I will have to recreate the, the tropical storm Alex video.
Amy, looking forward to it. Yeah. Yeah, it's gonna be a lot of practice to get that right this time. But I'm sure Simon will get to hear more about all of this at, at the show. And of course we'll have you back to share your take on what, what we all gleaned from that event and, and different things that we heard from, from operators.
But anything else exciting coming up that you're looking forward to or anything else we should know about? Absolutely. Well, first of all, thank you both so much. It's always great to see you and, and, and have this amazing conversation. I wanna congratulate you on what you have built with Alex and Annie in the marketplace, and and it's, you know, it's great to follow you.
Despite the fact that we're not seeing us on a monthly, each other on a monthly basis. Thank you. It's I, I even more enjoyed it. So thank you for that. Thank you. I think, I [00:31:00] think what we're, you know, I, I don't want to end the conversation on a bad note, but obviously one thing that I'm super excited about is that now it's again, Event time, so London next week.
Then Tel Aviv Al, which I'm looking forward to, London has 800 participant S, the S D A A vacation rental executive, BMA executive 150 200 attendance. So then we have scale up rental in Barcelona and I'm glad that I'm not. My team can now go out there and I don't, I have to do less traveling and I can be at places where others can be at the same time, which is awesome.
So we're really looking forward to the conference time. Having said that, one thing that really concerns me right now and is really what we are seeing on the regulatory horizon. Mm-hmm. And, and we need to stand together as an industry more than ever before. Do you think it's getting worse or, you know, I'm not.
Is it good enough? I can speak For Europe, we are seeing London [00:32:00] cranking down. Like it literally looks like they want to totally get rid of it. Wow. In Portugal, the gov the government will literally make vacation rental and apartments impossible. So we we're seeing some massive changes out there and, and we need to be aware of them and we need to, we need to, you know, and we can see what the individuals can actually happen.
So we've, they've raised a lot of capital in terms of. Yeah, at the VMA advocacy and, and, and other organization, which is great, but I think it's not just capital, it's individuals. Like you and us mm-hmm. Who are influencers in this industry, we can contribute a lot more than just cash. Yeah. In, in having the right conversations out there to make sure, number one, we vacation, rental property management is seen as a professional business.
That we're taking care of the service and we deliver everything for the guests, number one. Number two, we are creating more value than an average hotel room. It's a fact, you know, [00:33:00] people shop in the destination, they consume the destination, they go outside to restaurants and everything else, so they spend the average spend of a vacation.
Rental. Gas is substantial and people need to understand that the value creation for a local community in vacation reason a little higher. And number three people need to understand there is there. This industry is not just the Airbnb real estate phenomena that was created professionally managed business has been around for years, and we need to stand up for what we have built because this is a professional business that should not be put down by regulation just because regulators and lobbies don't understand the value creation and the quality of the business that we're delivering to the community.
Yeah, and I, I said on the advocacy fund for V R M A this year and, and you know, just the focus on trying to reach outreach to people to get them engaged. And I think to your point, the money is really great and we absolutely have to have the money to offset the, the expenses. Sure. But [00:34:00] the engagement is, is crucial.
There are markets where there's just not enough engagement and people aren't standing up until it's too late. They're not being proactive. And I think organizations like the VMA advocacy. And then also like rent responsibly with Dave and his team, like what they're trying to do at market level. Like that's so important and I think that there are a few people that are very active and very vocal, but we need to get more people involved in it.
And I think that's one thing that Alex and I recognize that through our podcast and through other podcasters, like we can absolutely further that conversation and bring more people to the table so that we can not necessarily fight regulation. Cuz I don't think all regulation is bad, but make sure that the regulation that is being.
Put forth is, it makes sense because, again, to your point, just in Florida, there's so much regulation that's out there that they wanna shut things down and it, we, we thrive. I mean, our state thrives off of tourism and the fact that they would want to shut some of these down, it, it would literally cripple some communities and they're just not.
Understanding that. Yeah. And that's why, I mean, smart [00:35:00] regulations is where we all need to be focused on. Cause it's like, I mean, Florida, we were just talking about that at our Chamber of Commerce meeting this, this morning. There's no barrier to entry for Florida at all. You don't have to have a a license.
You don't, there's you, you can really jump through a thing. You don't do trust accounting. I mean, you can get. Started very easily and you know, sometimes having all of those levers just on go ends up being that you, you then have to backpedal and make these restrictions that are not gonna be for, for the better good of the destination and, and the good apples like we all are.
Yeah. But, but yeah, definitely. You know, we support VMAs efforts and rent responsibly use efforts in this. We were just on a panel this week with rent responsibly. They always bring a lot of great content and attention to this, and hopefully we can get more of the s t r crowd involved in these conversations because there's, there's so many people out there that we just don't even reach within the professional organization.
I mean, there's 35,000 vacation rental companies in the United States, and I think. 3000 of or so are v RMA members. So there's [00:36:00] still a lot of a lot of opportunity. There's, yeah, there's a lot of opportunity. Let's stay positive. There's a lot of opportunity. Yeah. And then when you combine that with all the individual hosts that are out there, I mean, it's, you know, in the, probably hundreds of thousands, if not millions.
So a lot of opportunity, a lot of work to be done. But we are on top of it. And Simon, we appreciate your insight and intellect on this subject. And look forward to chatting with you again. Soon. If anybody wants to get in touch with you, what's the easiest way for them to reach out? The easiest way for for them to reach out is obviously find me on LinkedIn or my email address, Simon Lehman, l e hn
Perfect. Sounds good. And come to the conferences. Yes, and come to the conferences. I mean, you gotta be present to you know, to, to be part of these conversations. But by the time this airs, Annie and I will have just gotten back from the N W V R P event in Reno. So we're looking forward to that. But anyways, if anybody wants to contact Annie and I, you can go to Alex and annie
And [00:37:00] until next time, and Simon, until the next first of the month that you're coming on in, in a couple months now. We will see you soon. Looking forward to it. Thank you ladies, everybody. Saturday well,

Simon LehmannProfile Photo

Simon Lehmann

CEO/Co-Founder AJL Atelier

Simon is one of the world’s foremost experts on short-term rental and vacation rental. He leads AJL Atelier, a specialised vacation rental and business consultancy while also advising multiple companies as Board Member and Executive Chairman.
A sough-after speaker, panellist and moderator, Simon loves to broach high-level and technical topics alike, from the future trends of short-term rental to the specifics of online distribution in the top 5 OTAs.

Previously, Simon was the Co-Founder & Chairman of Vacasa Europe, former President of PhocusWright and ex-Board member of HomeAway, to name but a few. He’s also an accomplished operator, having led Interhome as CEO, Hotelplan Group as Deputy CEO and Swissport as EVP.