Ready to Sell Your Vacation Rental Business? What Buyers Look For and What Happens Next, with Igor Simkin of Monarch Collective

When Big Aggregators Strip Local Identity

Annie Holcombe 0:00

The company that shall not be named. We saw what happened firsthand when they came in and took over companies and just erased their personality and their branding and everything. And what that did to the market because all of a sudden you lost a lot of interaction with the local community.

Igor Simkin 0:13

Fundamentally, they did a lot of things incredibly well. There's some very talented people that worked at that organization. They were incredible at building a really large business very, very quickly. We saw this incredible opportunity for local focus. We wanted to be very thoughtful. We wanted to bring on great brands that we actually wanted to build around and learn from.

Alex Husner 0:30

You guys being able to show that visibility, but then also to benchmark. It's got to be eye-opening.

Igor Simkin 0:35

So anyone that's part of the Monitor Collective can see that benchmarking data, you know, pretty directly. We think it's incredibly important to be transparent and open. We really look for great businesses with established brands that we want to invest in and build around. If the seller doesn't care about what happens with the business after they sell it, that is usually a red flag.

Speaker 0:56

My name is Miller Hawkins. I'm the president and broker in charge of Boo Realty, as well as the Atlantic Resort Group. Both are under the Monarch Collective umbrella. I was asked several years ago while I was on the VRMA board of what my exit strategy is. Kind of hit me of, you know, I'm approaching 60 years old at the time and I'm not ready to retire now, but at some point I've got to have an exit strategy. I was introduced to the Monarch Collective a little over three years ago. I did not want to sell and give them the keys and leave. I wanted to stay on board for three, four, five years. And that's what their MO is. They don't want to buy a company from somebody and automatically go in and assume operations. They basically said from the get-go that when we do partner with a company, we work with you and support you in your current role as president to uh make life easier for you. We will support you and work alongside of you until the day comes when you do decide to leave. Before acquisition to after acquisition, as far as the brand, nothing has changed at all. The only thing they've done is support it. They brought in the resources, what they brought in, the support team, everything on the back end marketing, revenue management, financial accounting, everything. They want to free up our time so we can grow our company, run our company like we've done without the burden of all the back office things. We have grown a number of owners. We've grown financially. The loyalty and the attitude with our owners, the attitude with our guests, the attitudes with our employees has done nothing but go up. The advice I would give to a vacation rental owner who is remotely thinking about selling their business in the next five years. Don't wait until that time to start the conversation with the Monarch Collective. Reach out to them now. They have an acquisitions team that will fly to your location, they will meet with you, they will get to know your business. I strongly suggest you reach out to the Monarch Collective now. The best business decision I ever made was to buy Bu Realty back in 95. The second best decision I have ever made was to partner with the Monarch Collective the way we did.

Speaker 4 3:02

If you're curious about what the next chapter for your vacation rental business could look like, Monarch Collective offers a free, no pressure conversation to help you explore your options. No strings attached, just a straight conversation with people who deeply understand this industry. Visit gomonarch.com slash partnerships to learn more.

Owner Story And Partnership Offer

Alex Husner 3:25

Welcome to Alex and Annie, the real woman of vacation rentals. I'm Alex and I'm Annie. And we are joined today by Igor Simkin, who is the CEO of the Monarch Collective. Igor, so good to see you.

Igor Simkin 3:36

Alex, Annie, thank you so much for

Meet Igor And Monarch’s Origin

Igor Simkin 3:38

having me.

Annie Holcombe 3:38

We're excited to learn more about you. We did get a chance to talk to you briefly at the Exec conference a while back, but this is the first time we're going to actually sit down and really get to know Igor and all of the Monarch Collective movement that's been happening. But before we get started, why don't you tell us a little bit about your background and then how you got to be with Monarch?

Igor Simkin 3:56

Yeah, we'd love to. So you know, my running joke and my background is if you ask me at any point in my career what I think I'm gonna be doing in the next five years, I would have been dead wrong every single time. So really started as a public accountant, actually. So I'm uh I like to refer to myself as a recovering CPA. Oh worked for worked for KPG out of school and their transactions and restructuring practice. So got to see a lot of kind of MA accounting and inorganic accounting. So, you know, uh very applicable to this space. Realized uh along the way I did not want to be an accountant and actually joined a number of startups in the Chicagoland area. So I have kind of a fintech, health tech background across a number of uh you know startups, including a company called Advance, uh, which is uh an online lender in Chicago, and you know, really got attracted to kind of solving problems, building technology, building processes and solving, you know, challenging issues and creating great experiences for consumers. And uh, you know, ultimately along the way, I worked with you know a lot of the founders of you know what is Monarch today across a number of businesses. So you see this, you know, great recurring theme of a lot of folks kind of working together across many, many businesses, many verticals uh over time. And uh was lucky enough to join Monarch uh just about two years ago coming up on my two-year mark in July

Why The Market Needs Local Operators

Igor Simkin 5:09

here.

Alex Husner 5:09

Awesome, awesome. Well, that was that was a good segue into my next question. You were talking about solving problems. And when Monarch was formed, what was the problem that was seeking to be solved?

Igor Simkin 5:21

Oh, great question. I mean, I think what we saw was a fundamental opportunity in the market. You know, when you look at the vacation rental property management space, it's obviously very fragmented, it's hyper-local, and a lot of the you know, larger kind of early aggregators in the space, you know, really struggle to scale. Um, and you know, what we saw was a clear opportunity where you know there was a clear benefit to being part of a larger organization and finding a way to have a national footprint. And then we saw you know some economies of scale in that regard. But most importantly, we saw this kind of fundamental um need for great local management. And we we found an opportunity to balance the two. So, you know, there wasn't this requirement of buying a bunch of businesses and creating this kind of like national organization that throws out the local brand and the local team, but really embraces what they have and helps them with the things that they don't really necessarily want to do, like back office accounting, you know, HR and so on, and really lean in and support those teams and ultimately help them grow. And that was very clear that there was a need for you know an operating model like that in the market, and people seem

Preserving Brands While Scaling

Igor Simkin 6:28

to be hungry for it.

Annie Holcombe 6:28

Yeah. I feel like that we've talked to a lot of other groups that are doing similar. And it feels like just having been in the business for 30 years, you watch what happened and how things evolved, and the, you know, the I always say that the company that shall not be named, but the one that went public and just, you know, kind of just flailed about for a long time. And I was one that said, you know, we have to cheer them on, we want them to succeed, because if they don't succeed, it's just a black eye on us as an industry. But I think what came out of that was that that clear delineation of like saving local brands for the sake of, you know, growing a company. Like that just was something that I think people finally like realized that needed to happen. And then Alex and I had an opportunity to meet with someone from that company a couple of years ago at VRMA. And we said we shared from our perspectives. I in the Panhandle and she's in the Myrtle Beach area. So two very strong markets, um, a lot of vacation rentals in the area. And we saw what happened firsthand when the when they came in and took over companies and just erased their personality and their branding and everything, and what that did to the market, because all of a sudden you lost a lot of interaction with the local community. They weren't participating in events, they weren't sponsoring events. It was just all of a sudden, it was just this big branded name, like all of a sudden you know, Coca-Cola was everywhere, but it wasn't something that everybody wanted to drink. So, you know, it just didn't work out. But they they didn't seem to acknowledge that that was a problem. So I feel like that's something that came out of it that everybody has acknowledged. And so, how do you think Monarch is is approaching that maybe differently to protect the local brand? But we, you know, again, with all the other players kind of in this lane, what do you think that you guys are doing specifically to to um encourage local branding and keep that in place, I guess?

Igor Simkin 8:07

Yeah, no, that's a great question. And you know, from our perspective, we very much believe that that is the right, the right strategy, the right approach. Yeah, we saw uh, you know, a clear, clear evidence of what happened to your point with the company that Sean Up you named. And uh fundamentally, they did a lot of things incredibly well. There's some very talented people that you know worked at that organization and you know, they were incredible at growing, they were incredible at building a you know really large business very, very quickly. But at the end of the day, we saw this incredible opportunity for you know local focus. So from Monarch's perspective, it it's very simple. We're we're humble enough to know what we don't know, and we don't think that we have a better solution to an individual market, particularly when we first started in the space, right? Like we wanted to be very thoughtful, we wanted to bring on great brands that we actually wanted to build around and learn from. And you know, we started with a lot of you know great anchor kind of acquisitions that you know helped us build the right to do this on you know greater scale. And that started with you know, really working with the founders of those businesses, understanding what made them special and helping their teams kind of grow and scale and helping them transition into what they wanted to accomplish after you know the transaction. But but most importantly, it comes down to investing in people, comes down to preserving the local brand and making sure that we're very thoughtful with where and how we kind of plug in to help that that um organization, but understanding what they have and what made them win in the beginning and why homeowners choose to use that business, that is incredibly important to our thesis. And we take that incredibly seriously and build around it.

Anchor Deals Versus Tuck-Ins

Alex Husner 9:44

So, from your perspective and and the group there, I mean, you're seeing a lot of different companies from different angles and different industries and things. You know, it's it's interesting from our side, I guess, is how the appetite for selling a business has just really increased over the years. And I think it's really, you know, within our space, it's from people seeing companies get acquired for heavy, heavy amounts, you know, and and which is great. But I don't think that a lot of these local operators, when they started their businesses, necessarily went into it thinking that they were going to sell their business. I mean, like they maybe realized over the years, yeah, I could sell it, but like now it's just it's it's so much at the forefront that that is the goal. And on the flip side of that, you have companies that are just getting started in the last couple of years, and that's their only goal is to get as much inventory as quickly as possible and then be able to sell it to, you know, a group like you guys. But like, so it's it's different kinds of companies. And you know, thinking about um Miller Hawkins, who we talked about before we hit play, who has built a business here in Myrtle Beach that's been around for decades, you know, and he's been a member of the community and done great things. That's a very different experience in buying a company like that versus buying something that was just set up, you know, in the last couple of years and they're just trying to get a return on that cash. So when you guys look at a business, like how much does that come into play of whether it's a historical legacy business that's been around for a long time versus if it's just literally an inventory play?

Igor Simkin 11:12

That's a that's a great question. And and and really from our seat, we have kind of two different lenses that that we apply to a you know potential company that wants to join modern. There's the true kind of anchor acquisition, which would be our first entry point into a net new market. And there's you know, call it a tucking acquisition, where hey, we have a great business, a great local brand, and we have a strong team that we believe in, and they're looking to grow faster, and there's an opportunity for business to effectively get tucked into or absorbed into that local brand. So the the former, we are much more selective with the type of business that you know we want to start with in a new market. And we have very little interest in um you know, drive-by operation that ultimately effectively is created for the purpose of ultimately selling the business in a very short period of time that is incredibly risky for you know all the reasons you can imagine. So when we enter into a new market, we look for a great brand, a great team, employees that have been there for you know long tenure that care about their local community and care about the market. Like we do not want to be the net new corporate monstrosity coming in and creating challenges because we acquired a shell of a company that ultimately isn't fit for purpose in that market. So we really are careful about that. If it's a tuck-in and we have a great team that can absorb it, we'll take a smaller business, even if it was recently kind of built and kind of you know aggregated for the intent of uh of sale, that's okay as long as we understand the inventory, we understand the team, and the most importantly, the owners would welcome to be part of kind of a more established local organization. If all that is true, then we'll do that all day long. But we really look for great businesses with established brands that we want to invest in and build around. Like my my barometer is if the seller doesn't care about what happens with the business after they sell it, that is usually a red flag.

Speaker 3 13:03

We want for sure.

Igor Simkin 13:06

They want to do the right thing for their team, their homeowners, and for their market because they want to be part of the community long after they join Monarch.

How To Prepare For A Sale

Annie Holcombe 13:12

Yeah. So uh kind of a follow-up to Alex's question, but I think a different light. So if somebody is considering they want to sell their business, you know, I think the there's been a lot of conversation at some of the shows most recently where people will say, here's the things you need to consider if you plan to sell your business. But if somebody came to you and said, look, I I've been doing this for you know 25 years, I'm getting tired, but I feel like I've established myself, what would you tell somebody about like what they should do and like how long they should plan in order to have that conversation and be prepared to sell? And then in in in like as a follow-up to that, like how would you approach somebody that came to you versus you guys vetting them out? Do you are you do you have people that come to you that you have brought into the fold or how does that work?

Igor Simkin 13:57

Yeah, no, that's that's a fantastic question, um, Andy. So so really from our seat, there's never a wrong time to begin the conversation, right? Whether you're thinking about it, whether you've been planning it for years, we'd love to have the conversation and we're very direct, right? We will we will tell you exactly you know what the state of your business is, we'll tell you what it needs to look like. And obviously you have to have your your finances in order, you have to have great legal advice. Like we want we want businesses that are well informed having the conversation knowingly because we don't want there to be any surprises. So some businesses may not be at the right maturity level to necessarily sell, and we'll tell them that and we'll help them, and we'll maybe connect them with a broker or connect them with other folks that can help them kind of grow to that level and and build you know that um kind of structure that will set them up for what they're trying to achieve. But we don't want to waste their time and and we certainly don't want to waste our own if they're kind of not ready, that's that's okay, but it's never the wrong time to start. In terms of you know what they can do to prepare, I think the number one thing that they can do is get again, get their books in order, make sure you have clean financials, um, which is easier said than done because most people in the space are not accountants by trade. Most people are trying to run a great vacation rental management business. And so when you actually have somebody doing diligence on your books and picking it apart, it just can be very challenging if you haven't thought about the business in that way over a long period of time. So, you know, we we encourage folks to you know really understand what it takes. And a lot of times, if they're smaller and you know haven't explored the process, they absolutely should work with one of the many great brokers you know in the space. We welcome that. We we get people that approach us, you know, both um kind of organically and we reach out to people you know proactively as well. In both cases, we're welcome. We we were happy to take the call, right? And and I think the real answer is as long as they know what they're trying to get out of the transaction, like what success looks like for them, as long as they have you know the expectation of getting you know clean financials and clean kind of legal docs and all that in order, we can help them, you know, work through that process in a constructive way, whether they're ready now or later.

Alex Husner 16:00

Got it. And you mentioned earlier that you one of the differences that you see of Monarch is that you guys really have a tailored approach to what that journey looks like for owners. So maybe tell us a little bit about that, like how that varies between company to company.

Igor Simkin 16:14

Yeah, no, that's a great question. So, I mean, it it really starts with what are you as an owner trying to achieve? And and really to me, that starts with are you looking to kind of step away and retire? Are you looking to, you know, promote and cultivate kind of the next round of leadership for your team? Are you simply you know sick of some of the administrative and you know kind of red tape challenges running a business and dealing with you know owner escalations or whatever the case may be, but you are really excited about one particular aspect of the business and you'd love to do it for the next five years, but you just want some help, you know, like this business is you know, both of you guys I think know better than anybody, can be very, very taxing and is incredibly challenging coming out of a busy season with you know a bunch of guests that are you know less than thrilled and and and owners, property managers that are ultimately uh less than thrilled at the end of a season with anything that went wrong. Like you bear the brunt of it, and you as a big property manager are you know right at the fulcrum of everything that is challenging in this business. And sometimes you just want some help. So we spend a lot of time really ferreting out like what are they trying to achieve and how can we create a transition plan that you know embraces that. So we've got you know cases with uh within Monarch where the owner sellers actually wanted to step away, but ultimately chose not to, right? I think Miller Hawkins is a great example. Miller and Karen are fantastic, you know, with Boot Realty. They joined the Monarch Collective and they actually ended up taking on more leadership of other parts of the collective with a seller that actually definitively wanted to step away and retire. So we figure out the right strategy for your specific situation, and we make sure it makes sense for both the seller and for monarch. But I think if you work through that really explicitly on the front end, there's no surprises. And at the end of the day, you have a very clean process and hopefully a team that is well informed in an otherwise very tricky period of time because whenever you sell your business, there's a lot of consternation from all the stakeholders kind of in the Yeah.

Annie Holcombe 18:13

So it sounds like there's no there's no like one size fits all kind of structure for how this how this plays out. It's just really what's in the best interest of everybody involved at the time.

Savvy And The Direct Booking Push

Alex Husner 18:26

Before we get back to today's episode, I want to share something that we believe matters for the future of this industry. Every property manager wants more direct bookings. You invest in your website, your brand, your guest experience, because owning that relationship matters. But travelers still need a trusted place to discover vacation rentals before they decide where to book. That's why Savvy exists. It's a direct booking marketplace built exclusively for professionally managed vacation rentals, and it's not just another OTA. When a traveler books through Savvy, you remain at the center of the relationship, so there's no platform standing between you and your guest. You communicate directly with the traveler, receive payment, set your terms and conditions, and nurture the ongoing relationship. Here's what really got our attention. Since launching in early 2025, Savvy's monthly booking growth has averaged nearly 40%. Travelers are finding this option and fast. We love what the team at Savvy is building for property managers and the direct booking movement. If you're looking for a distribution partner that's actually built for you, not around you, check out savvy at savvy.com slash Alex and Annie.

Asset Ownership And Hotel Curiosity

Annie Holcombe 19:32

In my consultancy, I work with a focusing on a lot of the smaller operators. And my intent for that was to kind of help them have these things in place because I think, you know, when I was in property management, it's like everything was like Alex said, it was like you're trying to get inventory. You're just trying to grow. I was in a condo market similar to Myrtle Beach. And so it was really about inventory grab. That was like how you established yourself to be a player in the market, to get your seat at the table, those type of things. Um, but I think a lot of these people that came in post-COVID, they're getting some bad information. They're, they're maybe not setting up something structurally. But one thing I find interesting is they are a lot more likely to own some of their properties versus actually managing somebody else's inventory. And so for you guys looking down the road, I mean, I've I there's a couple of people that I know that are in that space that they started out with one or two properties and then they bought a couple along the way they manage a couple, and now they're actually kind of going over to the hotel sector. They're picking up some of these like side-of-the-road motels and they're turning them into these little boutique ins. And so it can really diversify in their inventory. Do you see Monarch um working in the hotel space as well? Or do you think that you're just only in the lane of just vacation rentals and with companies that manage not own the asset?

Igor Simkin 20:41

No, that's that's a great question. So just to be very direct, Monarch's uh strategy is to never own the actual asset. So you but that doesn't mean that we can't work with the company where you may own part of the inventory. In fact, many of our owner owner sellers do. So in fact, we see that to your point exactly. A lot of times that's the origin story, right? You buy a second home or a vacation rental property, you manage it yourself, or maybe you hire another local manager, you don't necessarily have a great experience, you think, hey, I can do this better myself, and you start self-managing, then your neighbor asks you to manage your property for them. And ultimately, that's how these businesses kind of you know scale. And for for Marcy, that's that's perfectly fine. Typically, what we do is we'll just continue managing those properties on behalf of the seller as part of you know the go forward structure. But Monarch itself, we very much are not interested in, nor are we set up to actually own the asset. It's very much a service service play exclusively, but we can work with you if you do own some of your inventory. And hopefully that's yeah.

Alex Husner 21:39

Yeah, that makes perfect sense.

KPIs That Matter And Growth Goals

Alex Husner 21:41

Good question. When a company comes to you and you you guys start first talking to them, like what's the biggest KPI or like the one thing that you want to know more than anything?

Igor Simkin 21:49

Oh, do I have to choose one? I mean, there's there's yes.

Alex Husner 21:53

Give us your top three, give us your top two. If there's more than one and there's an explanation, that's also okay. But I think that's like Something that people want to know because it's like we hear, okay, is it door count to what Annie was just talking about? Is it um you know their their net revenue at the end of the year? Like what is it? Is it their direct booking percentage? Like, what is the most important thing for from your perspective when you're looking at companies?

Igor Simkin 22:16

The biggest thing I can point to is a strong, stable, sustainable growth pattern, right? Like, and really that dovetails into a number of KPIs because there's obviously growth in terms of like net units, of course, but there's also growth in terms of bottom line, you know, profitability, gross rents for Marcy, we're not looking for somebody that went from you know 10 units to 200 units in a year, right? Like that normally is a red flag, and we want to see a sustainable track record that you know shows you know elevation and scale, but ultimately positive momentum. So I think really like when you look at the KPIs outside of bottom line profitability, we're looking for you know a track record and sustainability, knowing that many things happen in the market. There's weather events, there's regulatory, like there's always you know an asterisk in this space, of course. But we just want to see a business that kind of perseveres through that and one that we can actually grow. The other side is a KPI that we look at that isn't even related to the business directly, but is more like the market that they're in. How much can we help them grow? How much opportunity is there, both in terms of the actual you know, total addressable market, but also in terms of how they're positioned and what they're trying to do? Can they scale and can we help them scale faster? Is a big part of our you know decision-making process that we look at.

Alex Husner 23:33

Yeah. Gotcha. Excellent.

Annie Holcombe 23:36

How many actual companies have you brought within the collective at this point? Or have, yeah, I guess um, yeah, companies, right? Property management groups. Yeah.

Igor Simkin 23:45

Companies, we we refer to them as brands, but really they're companies. So we operate today under let's call 26 brands effectively across 12 different states. You know, that really looks like, you know, call it nearly 30, you know, acquisitions or you know, total transactions, because that includes some tuck-ins that um, you know, we've done along the way. So, you know, good scale in that regard, just under 6,000 homes kind of under management today.

Annie Holcombe 24:09

And and with that, what's the five-year plan? Like what's the goal for Monarch? What's success look like in five years?

Igor Simkin 24:15

Yeah, that's that's a great question. I mean, look, we we want to grow. We that that is fundamentally what we want to do. We want to grow, we want to enter into more markets. We want to grow the business. So, you know, we'd love to get to call it, you know, 12,000, 15,000 homes within the next five years under management, both through a combination of you know, entering new markets where we don't have a presence today, but more importantly, growing our you know, existing inventory. And you know, we think there's a massive opportunity in the space, and you know, we're excited to be a part of it. We think that's a very achievable, um, you know, realistic goal for you know company of our state in the business.

Valuation Mistakes And Marketing Strategy

Alex Husner 24:46

And I mean, when when you first meet with a company, what's what's the one thing that you feel like you've seen that owners get wrong when they're trying to figure this out on their own? Like if they either come to the table and think that they were worth a lot more, like what what are the things that maybe people need to be thinking about as they start this journey?

Igor Simkin 25:03

It really comes down to understanding your business and your operation and your financials, right? I think that is like the number one thing. And, you know, in many, in many cases, particularly smaller, you know, let's call it like not quite as sophisticated or as scaled at organizations, they tend to, you know, misunderstand the actual kind of valuation metrics in the space and you know what their actual kind of bottom line profitability you know looks like. So just getting educated on that, making sure you have clean financials, that is the number one thing I would suggest in terms of you know knowing what to expect. And you know, frankly, like knowing how much the business should be worth, right? Many of them just don't have any idea of how to think about valuing their business. And that's where conversation can help. Like we can help tell you at least, you know, certainly what we would, you know, look at in terms of how we would value your company and um ultimately what kind of multiple you should expect and why. And we can help arm you with that information. So I always encourage, you know, reach out, have a conversation, you know, send us a note, go monarch.com slash partnerships, shame us one. But always, you know, a great opportunity just to see what's out there. And we we'd love to give you some feedback. And regardless of where you are on that journey, we can help.

Annie Holcombe 26:12

Awesome. I wanted to ask you about um marketing. So something that Alex and I have talked about for the five years we've been doing this show. We talk about brands and and talk about branding and really caution people to you know, really make sure that they have a brand that's not only established locally, but that can resonate um with a consumer to rebook, even you know, even if they're using OTAs. How does Monarch treat each brand in terms of like, do you do some centralized marketing or is everything left to the local market to decide what that looks like, or is it a hybrid approach?

Igor Simkin 26:40

Great question. It's it's a it's a hybrid approach. And and really, we do so we do have a central team and we actually do view this as one of our core competencies. We're something we invest in and actually um you know believe we have some interesting plays that help us really differentiate our local brands. All the marketing is done on behalf of the local brands, so in their names, right? So obviously the monarch brand is silent intentionally so. And you know, we will allow the business to, if they have a great team that they have, let's say they have a marketing leader and they are doing a fantastic job and they have a strong direct booking percentage, to your point. We won't necessarily come in and mandate that we change that. Like if it ain't broke, don't fix it. Pretty simple. If the business is, you know, really untap untap potential in terms of investing in marketing and creating you know properly optimized websites and actually, you know, spinning up you know, paid search or other channels, we are very excited to come in and help. And we have a team staff to do just that. So we figure out the right approach based on kind of the business need and you know what they have

Data Layer Benchmarking And Transparency

Igor Simkin 27:38

on the ground.

Alex Husner 27:38

And how do you take that? I mean, on the technology side though, and also have the optics that you need to be able to see what's going on in these businesses from a high level. Cause it's like if you've got multiple tech stacks, multiple different tools, not only does that create complexity from a visibility standpoint, but it also doesn't achieve, which I assume is one of the goals, is that the economies of scale. So, like, how do you approach those decisions with the brands?

Igor Simkin 28:04

This was one of the areas where Monarch actually saw a massive opportunity to differentiate. So, you know, I mentioned my personal kind of product and technology background. I think that that really runs central to our DNA. So we have a number of folks that have kind of built digital experiences that have run you know at scale like marketing platforms uh across other verticals. And we saw data as the core opportunity day one. And we we also knew that, hey, if we're embarking on this journey and we're going to welcome a number of businesses to the Monarch Collective, the one thing we can't control is what PMS you're on, what website you know developer you have, who you use for marketing, you know, and so on and so forth. We kind of knew that we were going to, no matter what, at least in the early days of a business joining Monarch, play in this area where we have many different providers. And so we invested in effectively a common data layer. We spent a lot of time normalizing, you know, track data to streamline data to guesty data and so on and so forth, so that we can actually have a common view of uh all of our businesses in in one lens. And that includes all the marketing data and analytics as well. So we've invested in building our own kind of proprietary uh you know Snowflake database with a BI reporting layer on top of it, AI enabled. And we've we've been doing this for years at this point to where we've you know, we feel really great about that as an immediate opportunity. So once a you know, brand joins Monarch, we can very quickly plug and play and provide that data and analytics back to the local team in a way that's incredibly powerful and well received. And so it also helps with if we decide together with the local site, hey, we maybe want to transition to a different property management system, or maybe we want to bring marketing in-house or whatever the case may be, we're equipped to do that, you know, right away and we have all the data on a historical basis, you know, really from day one.

Alex Husner 29:50

Yeah. I mean, that's got to be in a way, probably really exciting to people when you meet with them too, because they haven't been able to see that level, you know, of transparency and even in their own businesses. Because I mean, I I work with plenty of them that it's like, you know, they can't, a lot of them can't answer kind of basic things about what's going on in my world. I'm asking about marketing, but it's like it's not their fault. It's that their their PMS really just doesn't, you know, record the data the way that it needs to. But you guys being able to show that visibility, but then also to to benchmark to say, okay, yes, you're doing great here, but you know, this is where other companies of your size and you know in similar markets, this is what they're seeing. That it's got to be eye-opening, I'm sure.

Igor Simkin 30:29

Oh, yeah. Alex, you you hit the nail on the head. I mean, that is definitely one of the powers of being part of a you know a broader organization is you can compare notes and benchmark and see, hey, other people are doing this. Like, will this work in my market? It it quite well could. And so we not only expose the data to them, we actually expose all of the businesses' data to each other. So anyone that's part of the monarch collective can see that benchmarking data, you know, pretty directly. And we encourage that, right? We think it's incredibly important to be transparent and open. And I think everybody in this business can do better, right? Like that's simply always something you can improve. Nobody's perfect. We certainly aren't at the monarch, you know, uh level. And none of our brands are individual either. So working together, we're stronger if we can actually share that information and do better together.

Alex Husner 31:15

I've got one follow-up question on that too. How much weight do you put into a company that has a strong book direct brand and percentage of reservations coming into book direct?

Igor Simkin 31:27

Honestly, like increasingly more so the answer is we put a lot of weight on it, right? We we think it's incredibly important, not just because of the ever-evolving landscape of the OTAs and some of the you know the challenges that we all know there. But to me, if you have a robust direct booking percentage, like fundamentally that means you've got a healthy business and a healthy brand. It's a good signal. It's it shows that consumers can tend continue to want to come and stay at your properties. That's something that you can very well point to that is differentiating you from your competitor down the street. So we very much not only put a lot of uh premium on that, we help the brands build out more of a you know direct local channel so that they can actually build upon what they already have. It's very important.

AI Search And The Future Of Direct

Annie Holcombe 32:08

So on that, and you you said the you said the phrase, you the the the key word that everybody's talking about, the big shiny penny in the room, um AI. And so I would imagine as a leader, that is probably top of every agenda that you have with anybody to talk about how you're going to enable it in the business, how do you roll it out with these, uh, you know, with the and and let's face it, a lot of the companies that you probably purchased their legacy and they were a little old school probably when you got to some of their functionality. So AI is a very scary um like concept for somebody to like embrace. But how are you as a leader looking at that and and kind of it's like multi-layered because the opportunity for direct book is there? But it was if Alex and I did a show recently where we were talking about AI and kind of how that interplayed with direct booking, and we both did use our tools. She was on did CHEP GPD and I did Claude, and we asked some very specific questions and got two completely different like responses, different markets. But I got all the direct books in my market with OTAs listed second, and she got OTAs with no direct books. And so I was listening to another podcast this morning actually, and they were talking about how LLMs and the AI agents can't see certain things. Like they can't see, they can't see rates, they can't see photos. So you have to be very, very behind the the scenes descriptive. Um, so all that being said, what is like maybe your focus at this point with getting AI enabled for all of your constituents?

Igor Simkin 33:43

Yeah, that that's a great question. And honestly, a deep one with a very broad answer because to your point, and it'll change by tomorrow. So yeah, there's there are many, well, there are many layers of AI usage, right? There's like obviously how people are using AI in their day-to-day to make themselves more efficient. There's building embedded processes with AI and creating you know real automation. And obviously, to your to your point, um, you know, Andy, the the opportunity to have AI effectively find your site and you know improve your direct booking, so call it like AI, you know, driven search optimization, right? So the short answer is we're leaning in heavily to all of those things. Like we we've believed strongly from day one that you know data and analytics is incredibly key to this business and something that to your point, I think people have under-indexed on, particularly the smaller, like legacy, you know, regional players. And there's a massive opportunity, and you know, we want to be tip of the spear. So we've you know done a lot to enable like many of our employees to actually use AI in their day-to-day life. We you know leaned in from day one effectively. We have folks that have been using it for years at this point, but increasingly so. We're building a lot of our kind of core processes, all of our financial reporting, all of our back office stuff has been effectively automated with AI kind of driven tooling today. And we're investing in um in early days of kind of thinking through the optimization of our you know websites and how we can actually make them more AI searchable. So we have a lot more to do there. We have some prototypes that we're working on in the background and are always you know welcome to compare notes on that because I think it is truly changing the way that consumers are shopping. I think anyone that's seen their direct website traffic decrease in the last um, let's call it 12 to 18 months, while they've also seen conversions on their website increase. That is likely very much driven by you know AI models that are actually doing the search and bringing people to your site with a high level of intent and a high level of understanding of what they're trying to book already. So building around that and actually leaning in, something that we're doing, you know, every single day. We're having conversations about it literally today.

Hospitable And Operations Automation

Speaker 1 35:44

My name's Anthony Rollo. I'm the co-founder of Awazy Stays with my wife, Whitney. And we manage about seven of our own properties all along the East Coast, and we've been using Hospitable for about the past three years. If I'm thinking about how much time Hospitable has saved us, it's really going to be hard to quantify because it's countless hours. We're always looking at ways to improve the guest experience, and that's through upgrades in our home to special touches. So having Hospitable as our software partner really allows us to keep that guest experience focused kind of front and center. And without Hospitable, I don't think it really would be possible. Now that we're partnered with Hospitable, we feel fully equipped to continue to scale our business. In the past, we would have had to hesitate to bring on a new property. It's going to be a big challenge to kick it off. That's not even a concern anymore. And that allows us to focus the energy on the acquisition of the property and the enhancements of the property and the build-out for how the guest is going to be feeling when they arrive to the property versus any of the technology or operations challenges that we would have had to think about. That's all taken care of. Working with the hospitable team has been incredible. What stands out to me is that they're really there to listen and learn. Their roadmap is clearly derived from user feedback. And that's one of the most important aspects that we see from our partnership. A lot of other PMSs out there are growing in the ways that they think they need to grow, but they're not taking into account the actual users. And I think that's where Hospitable is light years ahead of any other platform out there. If you're thinking about switching to Hospitable and seeking a product that's driven by engaged users, looking to provide class leading capabilities, a robust community of owners and managers, you're going to be in the right place coming to Hospitable.

Speaker 4 37:27

Run your short-term rental business on autopilot with Hospitable. Alex and Annie listeners get a 14-day free trial, plus 25% off for the first six months. Click the link in the description to get started.

Retaining Employees And Upgrading Benefits

Alex Husner 37:40

I want to kind of switch directions here just a little bit and talk a little bit more about the people and the culture and how you look at when you acquire a company retaining those employees, because we all know that's something that's very important to a lot of the companies that are out there that you know are considering selling. They don't want to, you know, have their staff let go. How do you retain the employees and how do you also work to get them actually in a better position? Or what does Monarch offer that maybe they're going to be in a better state than they were if they were just on the standalone company?

Igor Simkin 38:13

Sure. Well, it's I mean it's a great question. And and look, I think the consternation starts from the minute that the owner of the business tells their team that, hey, they're exploring a sale. Like that it creates like palpable concern in the average employee that has no idea what that means for them. They have no idea what it means for their families. And you know, we we try to like get into that and just get through it as directly as possible. We work with the owner-seller to you know, kind of craft the messaging in the journey. Um, it's great when we say that like we're not assholes. And uh day one, when we come in and we prove that that's true, I think you usually people see very quickly that we work to build trust, you know, with the local team. So for the employees, that looks like we typically improve their benefits. So we've got a monarch level um kind of healthcare benefits plan, 401k matching. Um, like we truly believe that one of the greatest assets of any of these businesses are great tenured employees that you know have seen this you know day in, day out, that have you know experienced a number of busy seasons. I think anyone in the space that's attempted to kind of replace key operational resources because they moved on, knows the pain that that causes. We take that very seriously and we want the team to feel like, hey, this business becoming part of Monarch is a positive for me, right? We give them opportunity for you know knowledge um transfer and knowledge kind of builds. So we're we encourage communities across the different sites to share notes. So if you're you know an operations uh you know director, you're gonna have the benefit of talking to 21 other operations directors day one through our kind of centralized Slack channel that we you know bring everybody onto. We really try to make them feel like this is a step forward. And almost in all cases, they do, right? We we are very direct with people, we are very open with what this means, and we're not coming in trying to you know effectively take out a bunch of costs they want. Like, I think that is the connotation that comes with a large company acquiring a smaller business, like the standard MA playbook, like does not apply in this market. It really doesn't. I mean, we believe that to be true. So we do not come in and make rash decisions. We will work with the GM and we'll work in a transition plan. And many times people actually get an opportunity to step up. So somebody that you know was the GM or was an operations director maybe will be the future GM of the business. Like we embrace that, we build around it, and um, we found that to be very well received by the employees throughout the modern collective.

Annie Holcombe 40:35

Yeah, I think that's so that's so key to highlight. And I don't know that anybody's articulated it that way previously is that you know, a lot of these companies are in some, they're in small markets. I mean, they're in markets where getting good employees is hard, but where sometimes getting a good stable job is hard and it's seasonal and it and it can be challenging. Um, and then providing benefits. I mean, there are still so many companies that aren't able to provide benefits. I know me personally, I'm out of my own and I'm trying to like do my own insurance, and that I just was like sticker shock, you know. Like there's just things that just the way the world works for us right now is not not great unless you can be part of something big. So I think it's something that, you know, for people looking and like, what's the best for my future? You have to weigh all those things. And I think you articulated that really, really well. And

Transfers Resource Sharing And Disaster Response

Annie Holcombe 41:18

I wanted to ask on that, is there opportunity within Monarch? So, say, say there's somebody from uh, you know, a panhandle and they maybe their husband is in the military and they have to move to say Virginia Beach or you know, move to another market. Is there opportunity to transfer within Monarch to another organization? Do you have that kind of infrastructure set up?

Igor Simkin 41:39

Yeah, we we do to an extent. We we've not developed that program as much as I'd like. So I think that's actually an opportunity for us to lean into it more. We've absolutely kind of shared resources, you know, we're applicable and we've accommodated kind of those use cases on an individual basis. We think it's a massive part of the value prop, right? Because one of the biggest and like most important things in this industry, in my mind, is you have to have great people on the ground and you have to continue to provide them with a you know compelling value proposition and growth opportunities. And you know, the fact of the matter is those come when you grow a local market, sure. But at some point, the person that's been the GM of that local market has been the GM for years. And we see an opportunity to absolutely allow them to step up and take on more responsibility to have coverage for other markets. We certainly see opportunities for resources to kind of shift around. And we've done that in in a few cases. I see that as uh an opportunity for us to develop a more robust, call it like assistant GM training program and things like that, ultimately give people a more structured path to explore just that. But we're always ecstatic when we see somebody raise their hand and there's a need over here. It just makes so much sense. And I'd rather you know keep it in the moderate family and give you know people an opportunity to solve each other's you know, challenges. It's it's always well received.

Annie Holcombe 42:52

I worked with a lot of hotel companies over the years, and I think I always like fascinated by larger hotel management companies that they have like these task force of people that like they volunteered to say, like, okay, if I need to go into a market because there's been a disaster, like I can go help. I know like Publix, the grocery chain that we have here, they're really big on that. Is that their people have they volunteer for very specific like internal functions, but they they can activate them to go into markets for for various needs. And I always thought like that, but that's something that I think vacation rentals could benefit from because there are times when like the mountain markets are going to need people and some of these beach markets, it's opposite season. So you could, you know, share resources. So I challenge you to do that. I think that would be a really awesome, awesome thing to do. But I love that you are thinking in that light. I think that's something that's been missing from some organizations.

Igor Simkin 43:39

Challenge accepted. And you know, just to double down on that, right? I think proactively investing in that, I think is important and something that we're going to continue to do. But you know, even reactively, I'm glad you mentioned disasters, right? I think that was one of the real powers of the monarch collective. We've unfortunately had, you know, a couple of uh you know pretty serious uh disasters that have impacted some of our markets, whether it's We had the fires in Lahaina. We've got a large business in Maui. We have a large business in the Blue Ridge Mountains that got impacted by Helene. And, you know, in both of those cases, it was really challenging to see the local team go through it, but really a great opportunity for Monarch and the collective power of Monarch to come in and help. Right. We've, you know, we did everything from getting on the phone and dealing with guest cancellations and moving reservations. We were boots on the ground in those markets within call it like 24 to 48 hours after the disasters, and just we're there to help the team. It's so incredibly challenging if you're just in the market and every single person goes offline at the same time. You've got guests stranded in homes, you've got you know pissed off owners that just want to know what's going on with their property. And it's really, really tricky. And we've been able to do this a couple of times now, that I think is incredibly helpful. And we've gotten fantastic feedback from the local sites because they know that they would have been digging out for months if it wasn't for somebody being able to step in and just bring some order to the chaos while they're all offline with no power, no internet for days, right?

Alex Husner 45:02

Yeah,

Cross-Market Guests Expansion Boundaries

Alex Husner 45:03

no, definitely a huge advantage there for sure. As far as to kind of Dove Taylor Mata Annie asked about, you know, looking at the different markets, like have you had any success yet of trying to get guests to go between market to market?

Igor Simkin 45:15

Yeah, that's a great question. We we have not yet invested in that, but we we see an opportunity to do just that. So, you know, part of the challenge with operating multiple brands is you don't really have that consumer-facing wrapper to kind of bring it together and create that that knowledge. But we we think there's opportunity and we're exploring some things in the background that will unlock that for us. We absolutely envision a world where somebody could stay at you know one of our properties in uh North Lake Tahoe that would very well like to stay in the panhandle um, you know, for more of a beach kind of destination vacation as well. So we'd love to capture all of that. And we think that's ultimately going to provide value to both you know the guests, but also to you know the homeowners that are gonna get that unique kind of channel. So it's something we're exploring. We haven't done it at scale yet. We've done a little bit around around the edges and tested it, but we think there's absolutely opportunity there.

Alex Husner 46:04

Yeah, for sure. Yeah.

Annie Holcombe 46:06

Looking ahead, again, kind of going back to like what does Marnark look at five and look like five years from now? Uh, do you guys think that you'll be expanding outside the US, like into Europe or any of those markets, or do you think it's something very much the within this hemisphere that you'll stay?

Igor Simkin 46:22

We we think we'll stay within this hemisphere. I mean, there's so much opportunity and it it's it's so fragmented. If you actually look at Europe, there's actually already been a lot of consolidation, um, you know, particularly in markets like the UK, where you really have a lot of aggregation. We kind of think that's where the puck is going to some extent in the US market. And we we're excited to continue to be a part of it. There, there's so much opportunity here that we're very focused on, you know, the continental US primarily uh today. And we think that will remain

Free Audit Offer And How To Reach

Igor Simkin 46:48

the case.

Alex Husner 46:48

Yeah, there's uh a lot of companies and a lot of property managers, and you know, we all know this, but the hard part is not everybody goes to the conferences too. I mean, there's a lot of companies out there, and a lot of them at least get to listen to this show and to other podcasts out there and you know get their information this way. So uh we certainly hope that somebody listening will uh reach out to you guys. And I think you're so you're offering our listeners basically like a kind of a free audit, right? Of their business that you'll sit down, you'll meet with them, no obligation to do anything, but just to kind of get a get a gauge of if I am interested in selling, whether you sell to you guys or anybody else, you will talk to them.

Igor Simkin 47:26

Absolutely. We we we we firmly believe in that. We, you know, look, we think we have to do our part, and just like you guys are doing your part, by the way. Your your show is fantastic. And I think the that you guys have built speaks for itself. And I think you're you're exactly right. You're tapping into the the folks that aren't necessarily going to Verma and not necessarily going to IMN, but are interested in being a part of the community across, you know, the the US at least. And you know, we're always excited to have that conversation and we welcome it no matter where you are on the journey. We've got an entire team that'll kind of take you through it and you know help kind of give you feedback and guidance on what makes sense. And if the time is right, fantastic. We're happy to have a conversation right away.

Annie Holcombe 48:02

Awesome. And that's great. I think people sometimes they just don't know what they don't know, and it could be something you point out that they're just they had a blind spot for. So I would encourage anybody to take you up on that offer just to make sure that they can get their business, get the ship right at now before they really think that they might want to sell.

Alex Husner 48:17

Yeah. And if I mean if there's something that you spot that, you know, it just makes sense that they need to have something to focus on if they actually can wait a couple of years to sell, it's much better to know it now than when you actually do want to sell and you get that information that you really got to clean one section of the business up to be able to get the amount that you truly deserve. I mean, I think the more information you can have on the subject, the better, if that's something that you're thinking about in the future.

Igor Simkin 48:41

So we totally agree. We we think all ships rise with the tide. And so we're willing to do our part and and help, you know, help us help you and have that conversation. And I think, yeah, there's definitely an opportunity for everybody to really take a step back and look at their business and and see where they can improve. And we're happy to have that conversation. No strings attached.

Alex Husner 48:59

Yeah. Okay. All right. Well, uh, Igor, what's the best way for them to reach out to you if they want to chat? I I guess the website probably is the best place to go to ask about, you know, going down that process. But if somebody wants to get in touch with with you, what's the best way?

Igor Simkin 49:14

Yeah. I mean, so uh if you want to go through that process, go monarch.com/slash partnerships is uh by far the best way. We've got a you know, simple little form or a website that tells you exactly what to expect. We're always happy to kind of respond there. But honestly, if anybody wants to reach out to me, isimkin at gomonarc.com, is I m k I n at g-o-m-o-n-ar-c-h dot com is always the best way to reach me. Um, I'm happy to you know reach out to you guys, right?

Alex Husner 49:39

Awesome. Well, thank you for coming on. If anybody wants to get in touch with Annie and I, you can go to alex and annie podcast.com. And until next time, thanks everybody.