From National Scale to Local Strength: Bob Milne on Vacasa, Casago, and First Chair Destinations

Bob Milne  0:00  
Vikasa went public on the NASDAQ, for crying out loud. That's kind of where things started to erode a little bit, because we started to sell ourselves as a tech company. The

Annie Holcombe  0:08  
whole industry was able to learn from why that wasn't a good way to operate. I mean, unfortunately, Picasa was doing it in front of the whole world.

Alex Husner  0:15  
When we look back, even just in a couple years from now, what AI is going to do for individual companies and for the OTAs it'll be fascinating, you know, if you can't beat them, join them. We'll start the show in just a minute, but first, a word from our premier brand sponsor.

Speaker 1  0:30  
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Speaker 2  2:13  
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Alex Husner  2:29  
Welcome to Alex Danny, the real women of vacation rentals. I'm Alex,

Annie Holcombe  2:33  
and I'm Annie,

Alex Husner  2:33  
and we are joined today with Bob Milne, who is the president and COO of First Chair Destinations. Bob, it's so good to see you.

Bob Milne  2:43  
Great to see you guys. You know, I think we were talking earlier. It's kind of nice to kind of get the group back together, so we run across these - our paths cross all the time. So, good to see you all, and thanks for having me.

Annie Holcombe  2:54  
So, I remember I was at my first VRMA board meeting last fall in Vegas, and I was sitting near you, and at the end of the meeting, they said everybody said their goodbyes, and it was like, oh, Bob's riding off into the sunset, and I remember thinking he's not going anywhere, like he's going to be back, like in some form or fashion. So, why don't you catch us up on what you've been doing? So, you maybe give a little bit of background, because you have a really extensive background, you've been in the industry a long time, lot of great DNA in you, and so we want to share some of that, but give us a little background on Bob.

Bob Milne  3:22  
Yeah, sure. Thanks. So, I mean, yeah, I've been in the industry, as you know, for a long time, and had the pleasure of serving on the VRMA board for a number of different terms, but started my career actually in Colorado, started a company called Steamboat Resorts, and we were a small vacation rental company in Steamboat Springs, and that was, you know, I branched out from Steamboat and went to Vail, and then to Breckenridge and Beaver Creek, and we ended up growing that portfolio to just over 1000 homes. I started that business that I think it was in probably 1999 or so that I started that business and grew the business to about 1000 homes, and then I ended up selling it to Wyndham, so that's when I kind of, you know, you mentioned the DNA, that's when I started kind of the with Wyndham Vacation Rentals, and we, you know, again, same thing, we built that portfolio up, I moved to New Jersey, so that was a big move, so I moved from Steamboat Springs, Colorado to the main campus of Wyndham, so I went from, you know, the small vacation rental atmosphere of Steamboat Springs, Colorado, to the publicly traded company atmosphere of Wyndham, and so moved to Parsippany, and we grew the Wyndham vacation rentals portfolio, I think, over a period of time to just about 10,000 homes, and then you know, I think we all know that Eric and Cliff, and so I got to know Eric and Cliff, we were friendly competitors at Vicasa, and Eric and Cliff said, "Hey, you know, you don't like New Jersey, why don't you move to Portland? so I. Uh, I moved up to Portland, Oregon, and started working with Eric and Cliff. I mean, at the time, Picasso was just a pretty small company. We had 5000 homes or so, and again, you know, grew the portfolio over over the time. I've been actually, the time flies at the Casa for just about nine years. So, but that's kind of how I kind of, my career has morphed and started like a lot of us, you know, started with a small vacation rental company, and kind of moved around, and and it's kind of like I've come full circle, almost. And I mean, I really have. I mean, you think about it, I'm actually back now. We were managing 34,000 homes at Picasa in our first chair portfolio. We're about 3500 homes, and it's primarily in the ski destinations in nine different states.

Alex Husner  5:44  
Wow, yeah, there's a, there's a lot to dive into here, Bob.

Annie Holcombe  5:49  
Yeah,

Alex Husner  5:50  
and you know it's funny too, because I was on your, your LinkedIn, just make sure I had your title properly, but you need to update your LinkedIn because you're missing a big section of those years if you look at your career history that doesn't line up, but we were, we were with you for them, so no, I know for sure they happen, but so you know in this model now of, okay, there's obviously Costco bought Vacasa, and at that point the opportunity came about for you to stay on with Costco, and maybe tell us a little bit about that experience, and how that then led to where you're at now.

Bob Milne  6:26  
Yeah, good, good question. So, again, everyone, everyone knows Steve Schwab and the Casa Go story, and I think you know Steve really saw an opportunity. I mean, look, with the Casa, it's no secret, I mean, you know, publicly traded, we had some struggles, you know, from on the financial side of the business, and I think that, you know, Steve saw a great opportunity, and so he was able to buy the business, it was, you know, I think it was just about a year ago, or little May, April, May of 25 and you know, Steve's vision was, hey, because he already had the franchise model cooking and working successfully, and so I think he saw an opportunity to get, you know, 34,000 homes, and then start to kind of, you know, build and branch out and move those into a franchise model, which is exactly what happened. So my role kind of changes SVP of operations, I kind of changed from actually kind of grow the business and run the business to actually help the team find the franchisees, and then make the transition from Vacasa over to the franchise model with Casa Go. So it was during that process, it was during that process that, of course, the light bulb went on for me, is, "Hey, here might be a great opportunity to kind of do something and get me back to, you know, to my roots in Colorado, and I'm a passionate skier, and, and so that's kind of how, you know, I started to say, hey, this might be a good opportunity for myself as well, and for others. So that's really kind of how it came about, and then again, like, like we were saying earlier, I mean, it's funny how all of us like someday we could just start to look at the DNA and where everybody kind of laying,

Alex Husner  8:05  
yeah, yeah.

Bob Milne  8:06  
I went back, and of course, you know, I've connected with my with with Rishi Nigga, who was I worked with at Wyndham, and some of his other other Wyndham colleagues as well came along with us. So Tim and Emerald and Dave all came along, so we've got to get, and then, and then the Vacasa team. I was so lucky to get, you know, some of the great players from the Bacasa team that had worked with me for the last nine years. So it was kind of a blended group here, if you will, kind of form first chair.

Alex Husner  8:36  
It's funny because it's like, you like, I mean, your whole career has been built on building inventory, and then you had, you just like reversed it, like let's get rid of the inventory, but then you're coming back in again, you know, it's back and forth, back and forth, a lot of motion there, but actually, I remember as you were telling that story, my first board meeting in Vegas, this was in 2022 you and I were chatting, and I told you I just made the move to go work for Costago as their CMO, and I remember you saying the franchise model is brilliant, you know, and that you believed in it, and I remember a lot of people saying that to me at that time, and you know clearly it was and has worked in in a lot of ways for companies around the country, but would you have ever expected in a million years, though, that this is what would have happened. I know I wouldn't know.

Bob Milne  9:27  
Yeah, I'm very blessed to have such a great opportunity, because I've been in this industry for a long time, and I've seen like almost every aspect of

Alex Husner  9:36  
it. Yeah,

Bob Milne  9:37  
and so it's been good, because yeah, you're right. I mean, I, you build up to 34,000 homes, and then I think you know my last day, the last day for effectively for Bacasa was june 1, and I don't have the exact numbers, but you could probably look, we probably were down to about 10,000 homes on june 1, because they had all been dispersed out to you know. Has to go franchises very successfully, I might add. So, yeah, I'm

Annie Holcombe  10:04  
curious. We talked a little bit off camera, but how your, how first chair is set up, because you, you're kind of explaining you guys don't have the traditional franchise agreement, it's a little different, but maybe explain that, because I think there's, there's some, there's some lack of clarity with these groups popping up, seemingly being franchises, but not, and so, why don't you explain that to

Bob Milne  10:25  
us? Yeah, I mean, so the thing with Casa Go, with Steve's, you know, Steve's vision was, you know, to have, you know, all of the inventory put out into, into Costco franchises, and, and quite honestly, probably, again, I don't know the exact percentage, but 95% of the inventory probably should put out into franchises, and then there's been a couple that have been unique, kind of one off, and then, and then first chair, we really kind of wanted to do more of a license agreement versus a franchise agreement, and they're very similar, I mean, they're not that different, but we really felt with first chair, because we're kind of unique, primarily in the ski destinations, not only in the ski destinations, but primarily we felt that there was an opportunity to build off that first chair name, and kind of that, you know, ski destination, that kind of, you know, mystique, if you will, about being in, you know, ski markets only, and so that's kind of why we kind of went down the license agreement, gave us a little more flexibility with how we market, and again, I want to make sure that everyone's, because I'm going to get, get hit with this all the time. We're primarily ski. We do have some beach markets in New England, some of those in that coastal community, southern Maine, New Hampshire, Massachusetts, but primarily the portfolio we acquired was in the ski destinations in the we're nine states, you know, primarily you know the names that you all are familiar with in Colorado, Aspen, Vail, Steamboat, Breck, Beaver Creek, you know, Jackson Hole, Wyoming, Big Sky, Whitefish, so Sun Bath, Sun Valley, Crested Butte, so we're in the ski markets of Colorado and the West, Idaho, but also in New England, so in Vermont, in Maine, in New Hampshire. So it's kind of a cool product that we're trying to build and really cement around that name of First Chair, right? Catch the First Chair.

Alex Husner  12:16  
Yeah, interesting. And I mean, so with the franchise model, there's a lot of things that go along with that, as far as the software and the platforms that you know, all the locations operate on. Is the licensing agreement in this version of it? We used to have a different one, but in what you guys are doing, are you still using the same tech stack, or is the difference just that you can have your own brand and market?

Bob Milne  12:38  
Great, great question. So, I think one of the things that Casago and Steve did well was they gave the franchisees, as well as the license, like we have that you have a kind of a choice that you can use, so they have their kind of preferred, you know, clients that they, that they recommend, and we follow that, so we're we're using our primary tech stack is the word we're using streamline, so if you go on those streamline, we're using, we're using Breezeway on top of that, and then we're using Topkey as kind of our financial kind of, you know, what we do to kind of pay the bills, and so it's really three platforms: it's Streamline, Breezeway, and Topkey are our primary platforms, and that's not indifferent, like a lot of the franchisees are using Streamline, some of them are using guests, the lot of them are using Breezeway, so we're very similar in that regard, for sure. But that's a big difference, you know? I mean, because you know, you think about with the cost, I get, I get asked all along, hey, what, you know, what happened at Vacasa, and, and look, Vicasta did a lot of things really well, and I mean that, I mean, if you look at operationally, I mean, and even just, you know, with Airbnb, with our guest review scores with 34,000 homes, I mean, I think our average guest review score was 4.6 on Airbnb, and our peer set was maybe 4.7 but you know, again, think the peer set wasn't at the time, there wasn't anybody else that had 34,000 homes, so the operations team, I think, did an incredible job at Vacasa, and a lot of them are still out there, as we were talking about earlier, Andy, I mean, that they're out there in working for the franchisees, and that wasn't where we kind of steered off the tracks, I think part of it was we had our own proprietary tech stack, right, and in order to do that, you have that's that's an expensive venture, right, that's an expensive venture, so you know we had a, we had a tech team in, in, in Prague, we had a, we had a tech team in Chile, so I mean it was expensive for us to try to maintain that tech stack, which is why when, when you know, we were talking about building the first chair. The first thing we said was, "Look, we're going to be, we're going to be a buy it, not a build it company. And I think that's.. I've already seen the benefits. Look, there's pluses and minuses, of course, but think about trying to maintain a tech stack for 34,000 homes and the cost of that, right? And I think that. That's one of the areas that I was able to, I feel fortunate that I was on the inside enough to say, okay, here's what I know works well, I know how to the operations, I know how to take care of owners, we know how to take care of the guests, but some of those administrative things and the decisions that were made not close to the door that were made, you know, either in parts or in Portland, that really weren't necessarily the right decisions for their local team. I think that's where we kind of got off base a little bit.

Annie Holcombe  15:29  
Yeah, I think there was a learnings from that, from like the boots on the ground, you know, that like when you saw things didn't worry me. I think the whole industry was able to learn from why that wasn't a good way to operate, I mean, unfortunately, you were doing it, Pica was doing it in front of the whole world, so everybody was looking for, you know, an excuse to see, you know, see the organization trip up, and you know, unfortunately, there was quite a few people that were just of that mindset, but I think I always was a proponent of, like, we needed them to succeed to show that vacation rentals could be a large operator, and I think you know mistakes happen, but you know, I was gonna, I wanted to ask you, like, what do you think were your biggest learnings that you knew that you, you know, you learned in the time at Vacasa, and even going back to Wyndham, that you have now at First Chair, that you've incorporated?

Bob Milne  16:18  
You look, I think a lot of us, and both of you being in the industry now, I think a lot of us learned the success when we were really small. We learned what really mattered when we were small. We learned that it mattered that you make sure that you treat every single owner like they're your only owner. It makes sure that you treat your employees exactly how you want to be treated. Make sure that every guest feels special. Those are things that you can only do locally, and you can only do if you have a spirit of hospitality. And I think that as you grow, as you grow, that gets lost a little bit, a little, not all at once, mind you, just gradually. And then, as you get to be really big, all of a sudden those things that were really important and near and dear to your heart, terms of hospitality and service erode, and then we find yourself making decisions that necessarily aren't, you know, aren't the greatest ones, you find yourself making decisions that are maybe bottom line oriented, because you're a publicly traded company and you've got to make numbers for the quarter, and suddenly those decisions that first don't seem like they're that impactful, but over a period of time they definitely erode that kind of culture of hospitality within, within, you know, your local market, so even though, look, you guys both know, like I used to fight the battles with Steve Milo all the time, like, oh, you're not local, you're not local, but we were local, that wasn't it. It was that just that I think that when you get this big company mentality, whether it was Windham or whether it was Bacasa, you start to lose that feel and touch that the local teams really make, make you genuine and make you unique. And so it wasn't any that we weren't local, I think it was that we started to make decisions that were not local but impacted the local team. If that makes sense,

Alex Husner  18:09  
yeah, for sure. And I feel like, you know, over the last several years post Covid, it's like there's just been so much focus on the technology side of the business, which, you know, has been a good thing in a lot of ways, but in some ways it's like, you know, we talk about this a lot, that you know, the hospitality focus has dwindled out, and to some extent, that some operators and some companies are thinking, you know, the technology can really replace a lot of things, and yes, AI can replace or make some employees, you know, stronger and be able to work on more things efficiently, but at the end of the day, we're still in a hospitality business, and the companies that have stood the test of time and have been in their markets for 20 3040 years, they didn't succeed in those early years, and they're not still here right now just because of technology, they're here because they were good business people and they provided good hospitality at the end of the day, but I'm curious on the technology side, because that's kind of one thing that everybody was wondering over the years, of like, if Picasa was to, you know, go under or sell or whatever, what are they going to do with the tech, because they've put so much into this tech, like, has anything happened to it, is it even, is it

Bob Milne  19:22  
salvageable, or what's the look look? I don't believe I don't believe that they're using their tech right now. I mean, look, Picasa has a, has a great website, like there's no question about a lot of traffic, and that's one of the nice things. I mean, part about, you know, with our, with our agreement, our license agreement, whether you're a franchisee or license agreement, we still get to distribute our product, all of our inventory on casago.com as well as vicasa.com and I really think that, again, you go back to Vicasa, there was a lot of things that were done right, I think that website is a classic example, our tech stack, in terms of the tools that the teams in the field had was actually pretty. Good, and I mean, again, I know, because that was my team that was all using the tools, but I think the point that you make is a really good one, is that look, Vipassa went public on the Nasdaq, for crying out loud, right? Like, so we marketed ourselves as a tech company, you know, why, because tech companies were valued more, and so, but the reality of it is, it goes back to the question you were saying, like that's kind of where things started to erode a little bit, because we started to sell ourselves as a tech company, and when you do that, of course, we use the technology, and there's a certain ring of truth to all that, but if you're an employee and a team member in the field delivering that service, you know, you have to an owner, to a guest, etc. and you're using technology for one part of your day, and the most of your day is everything else that, that we, that we do on a daily basis, as you all know, kind of be a little bit misaligned in terms of your, your messaging in your culture. Yeah,

Annie Holcombe  21:01  
yeah, for sure. I think that it was definitely interesting to watch, and you know, like, you, you mentioned there were people that were naysayers, and it was just unfortunate. But I do think that with Steve Schwab and kind of his vision coming in, it sort of allowed Vikasa to have a soft landing, you know, instead of like an because I think there was people that were certainly betting on a full on implosion.

Alex Husner  21:26  
We'll be back in just a minute, but first, a word from our premier brand sponsor.

Miller Hawkins  21:30  
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 345, 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 make life easier for you, we will support you and work alongside 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 Boo Realty back in 95 The second best decision I have ever made was to partner with the Monarch Collective the way we did.

Speaker 2  23:36  
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Bob Milne  23:56  
I think Steve's coming in the tie, it couldn't have been a more perfect kind of acquisition, if you will, like they were the right buyer at the time, and you're absolutely right. Look, this plane maybe wouldn't have crash landed, but it certainly would have been a much bumpier landing, and it would have been a hard landing, and you nailed it. It was a soft landing, and it worked out great for for everybody, because the nice thing about the franchise model, and even with the light, like, we, the majority of the team members have all just moved, so it's like they're still doing their job, they still have the relationship with the owners, etc. And that's that wouldn't have happened necessarily if it was a different kind of outcome.

Annie Holcombe  24:38  
Yeah, take me, take me to the phone call that you made to Rishi, and I always say his name wrong, I'm sorry, Rishi, I'd always say it wrong, but the phone call you made to him, like, I mean, he had been kind of on the periphery, I know he'd been doing some things, he'd pop up every now and again, so I see he's still kind of in the industry, but he wasn't day to day, like in vacation rentals that I knew of, but like you, you call them up. You were like, hey, want to get the band back together. It

Bob Milne  25:03  
was actually reverse. He called me, and he said, "Well, what happened was he said, 'Hey, you know, I've reached out to Steve and the Casa Go team, and I'm trying to get this kind of portfolio together, and I said, 'Oh, that's interesting, Riche. I'm actually trying to do the same thing, maybe on a smaller scale, so that's when we started to kind of put, put our heads together and talk about, okay, you know, maybe instead of me trying to do just something smaller local for what I want to do, he said, "Hey, I've got a bigger vision, maybe we can do something that's broader with all the speed markets, so that's kind of how the, and we'd been being look, Rishi and I have been good friends for a while. We've been in touch, and I knew kind of what he'd been up to with Urbane and what he'd been working on, so it wasn't like it was that big of a stretch for us to kind of, you know, get together. Yeah,

Annie Holcombe  25:55  
yeah, I love that. I love that, because it's all like just all the people that I ever encountered at Windham, and then obviously you know way back to the Resort Quest days, all just such great leaders, and it would have been a shame had you guys gone away, because again, you have all the basic foundational leadership qualities that this industry just craves and needs more of, and so I'm very thankful that you guys are all back and excited to see where First Chair is going,

Bob Milne  26:20  
I mean, thanks. I, yeah, I appreciate that. I think, look, what we're, what we're really trying to accomplish here is to take, and again, you can, you don't have to look very far, like, again, I think I'm very, very lucky to be in the industry. You don't have to look very far, there's so many successful operators that are out there, like, we know them all, and they're all there, they're doing the things right, it's local, they're making the right decisions, and that's what we just want to make sure that we, that we do again, and that's what I really love when I got my business started in Steamboat, like I mean, I, and we have, you know, one thing that is a little bit unique is that we really have all of our HOA clients as well, so we brought on 39 HOA clients, which are, you know, again, that's part of how I cut my teeth in the business was, you know, managing HOAs that were also short-term rentals, so we've.. it's so funny, we have some of our clients were clients that were mine in the Steamboat Resorts days are still with us, and that's what, to me, is really fun, you know, so yeah, it's all about making sure that you have that degree of hospitality that's blended with giving your local teams what they need. I mean, I think when I started Steamboat Resorts, I had second generation, when by the time I sold it to Windham, I had second generation employees with us, so parents that had their kids working with them, so that's the kind of excitement that gets me going, is saying, hey, let's build something unique and special here that blends my passion with skiing as well.

Alex Husner  27:51  
Yeah, no, I think you found the perfect, the perfect role, you landed well, that's great to see, but curious for your thoughts on what's going on, as far as you know, ownership of companies across the country, that there's a lot of the PE groups and you know collectives that are coming together and buying up the companies, and you know there's been conversation of what does this look like in 510, years, I mean, is everybody just are there just five companies that own all the vacation rental companies, or is that going to be the primary, you know, ownership model? Is those big groups, and then there's just some stragglers that are left, like, but what do you see as far as what would you predict on the acquisition front?

Bob Milne  28:33  
I think, again, I do think you'll continue to see some consolidation, for sure, right? For sure, I mean, and I, we have a, we have a private equity partner, baseline private equity partners, and they're great, like, so the thing about private equity is that they, they allow you to kind of do a lot of the things that you want to do when you, when you're kind of in this kind of period of growth, right, so that, that's I think what fuels a lot of it is having that, that, that private equity behind you that allows you to do some of those things, I think they'll always be in this industry, they'll always be that group. It's just the way it's the nature of the industry. There's always going to be that smaller company that thrives and does really well and has a unique niche in, and that can be anywhere from 50 homes to 1000 homes, even like in our case 35 I think our niche will always primarily be ski with some unique beach markets, but I think you're going to still see some consolidation. Absolutely, I don't have the crystal ball, but I also know that look, I just think of a lot of these franchisees that Steve has cultivated, they're not going anywhere. They're going to, they bought the franchisees so they could actually be more hands on and do the things that they want to do, but I think there'll be a little bit of both, Alex. I think there'll be some, definitely some consolidation in the coming months ahead. That we'll see, but I also think there's room for everybody to kind of have that smaller unique business as well.

Annie Holcombe  30:06  
Yeah, for sure. And on that note, one of the things that I think we've been talking about a lot is, and you mentioned a little earlier, is like the hospitality component of all of this is so important, and so wanted to kind of go over into like the shiny penny in the room right now is AI, and how AI is going to allow people to be more, you know, streamline their operations and be more effective in their day, and go out and do the hospitality, but then you see some companies that are using it for like everything, all their guest communication, so it's kind of removing a little layer of the hospitality. Where are you finding within first share that balance, or have you even decided what that balance looks like?

Bob Milne  30:44  
Yeah, no, we've started a course again. You know, our Vice President of Guest Experience, Nate Thomas, and he was the Vice President of Guest Experience for Vacasa, and so he has come along with us, and same thing, like our Vice President of Operations, Kristen Taylor? She was with me at Vicas, and we had already started to implement some of those, you know, those things with AI, but primarily, primarily, where we were using the AI tools was with respect to, again, guest experience, how to streamline, you know, the guests that, you know, calls and needs something. How do you streamline that? But we were also using it more in terms of our inside technology, with respect to how you track a ticket, and if a guest puts in, or an owner puts in something in the ticket, the Had AI can immediately recognize what it is that they're trying to get, get, and then know exactly who the LLM is, the local operations manager for that, and then automatically assign that ticket, so try to circumvent that, so we were starting to use AI from an operation standpoint, not just the guest X, like, because yes, everyone see it's a bot communicating with a bot, honestly, in business that you can do that for sure, but everyone will tell you that you know with all the channel distribution, whether Airbnb, VRBO, a guest sometimes doesn't know exactly where they're who they booked with, and so you may have a AI bot tool to help. A lot of times they need somebody that can actually speak with them, so nothing that we aren't using it for that, but we also found that where there's a great opportunity is in that operation side, and just what I said, like the ticketing, like knowing, okay, this person just typed in in your Breezeway app that they needed a, you know, they needed towels or whatever, all of a sudden you don't even have to type it all in, it knows, okay, Bob is the LLM for that, and it sent me a reminder or ticket that says, hey, you need to go take care of this, so there's some things that I think that AI will really help us with, from an operational efficiency standpoint, not just on the guest experience side.

Alex Husner  32:51  
Yeah, I agree on that completely. So now, Bob, with the team that you're managing, of roughly 450 people across these different markets, I mean, you're, you kind of sit in the head chair there from a culture standpoint. What are your key initiatives to make sure that those people, you know, still feel like they are, you know, part of the local team and part of the bigger collective? And like, how do you go about making this successful on that side?

Bob Milne  33:16  
You know, that's probably good. Again, it's one of the harder things that you have to do as a leader, is to try to, you know, make sure that the culture that you believe in and that you want the company to kind of operate under is spread out without the organization. It's easier when we all, again, we all know when it's just one little, you know, you're one company and everyone meets at the same place, but we're such a diverse, you know, industry to kind of keep that culture is hard, and so I mean, I think one of the things that I really try to make sure people understand, it's like right now, if you to look out to my left here, I'm right in the office in Steamboat, where our housekeeping vendors come, our operations team comes, our dispatchers come and I think being in the, in the thick of it every single day helps keep me grounded on what's really important in the business, and I think that's what I'm trying to do with First Chair and the entire organization, and I know that even with I go back to the Wyndham days when Rishi and I were there, we really tried to instill that as well, is that you know, make sure that the teams realize that the people that are doing the heavy lifting are the people that really matter, and I think by being in the thick of it here, I mean the teams know that hey, I can just walk into Bob's office and if I need help with anything, you know, I'll go out and clean a room. I'll go out and do whatever, and I think those are things that I think keep me grounded in making sure that our culture is hospitality first. I mean, you know, owners, we have board meetings right here in this office, so even though the housekeeper, housekeeping team, maintenance team, property caregivers are coming in and out of my office, I'll be sitting right here. Are having a board meeting with with owners or board members of an HOA, and I think that helps people realize, okay, what we do is really what we do, and it's not about being up in a corporate, you know, corporate environment, and that to me is something that I'm going to be working really hard to make sure that I don't stub my toe on that for the team, because that, I think they deserve it, you know.

Alex Husner  35:22  
Yeah, absolutely, absolutely.

Annie Holcombe  35:24  
I'm just so fascinated by all this, because you've seen, you've seen it all, really. I mean, I think you've seen all sides of the business, good, bad, indifferent, large, small, growing. What is, what is the future look like for first chair? You know, you mentioned you're going to stay ski, and maybe some some specific beach markets, but do you think that you guys are looking just for organic growth? Are you going to acquire some things like what is the future look like?

Bob Milne  35:51  
Great question. So it's probably a little bit of both, right? So we were able to take some of the had some of the key sales executives from Vipassa join our team, so we've got some really solid sales execs that are, you know, helping us grow the business, but I also think, again, with, you know, you know, Rishi's background at Windham, my background at Windham Emerald, who came along with us, led, led us through M and A as well, we'll do some acquisitions for sure, yeah, we'll do some acquisitions for sure, and I think that there's probably some that are on the horizon here that you'll see even before we get into next key season. So, definitely going to look at doing some of that, but also the organic growth, I think, is really important, and that's again another thing that Vacasa did really well. Our M and A outshadowed kind of what our sales team did, but I will stack up the sales team at Vicasa against any, I mean, they crushed it day in, day out, and so I think, and you've seen that any, when you go out and look at a lot of these franchisees, they took some of the key salespeople too, so I think we'll continue to grow organically, strategically, but also mixed in with some M and A, for sure. Yeah, M and A, right now, is, you know, as you know, I mean, it's, it's competitive. There's a lot of, there's a lot of, you know, deals that are out there, and people that are kind of, you know, you know, wanting to know whether, hey, what's my exit strategy? Do I want to be a franchise? Do I want to sell? I mean, away days out there, they've got, they've got some great operators out there, so I think you're going to still see the M and A kind of be active in my view in the next, you know, six, 912, months.

Alex Husner  37:28  
Yeah, and it's going to be interesting to see on the M and A side, I mean, where just investors are more interested. I mean, with what's happened with AI, I mean, from what I've heard is that, you know, investment coming into technologies is slowing down, and that there's more of an interest in, you know, investing in property management companies again now, because, you know, you AI can't just create these homes, but with technology and things changing, and people being able to do, you know, build more things that are still not proven, it's not focused on on that side, but any insights from what you've heard on that?

Bob Milne  38:03  
Yeah, look, I think that that's probably an accurate statement. Is that look this industry is attractive for a lot of reasons, and you all have been in it for a long time. I've been in a long.. it's attractive for a lot of reasons. I mean, if you do it right, you mean you think about from a cash flow standpoint, it's a great business, has good, great cash flow, from a, you know, just from a optic standpoint, it's kind of fun to be in a hospitality, vacation rental type of business, and if you, if you manage your business well, you can grow it, and you can also be very profitable, so I think there's a lot of pluses for people wanting to kind of, you know, take another look at the vacation rental business. I think what happened was, look, we all know post-COVID, it was, you mean, all you had to do was put a sign on, said, and your ADR was going up, and all it's like, going, wow, this is awesome, look, look at my ADR, and you were full, then kind of things have quieted down and stabilized, but we're starting to kind of get back on more of a what I like better, and we know what the peaks and valleys, I mean, they're they're kind of fun if you're skiing, but but as far as your business, I kind of like that more standard trajectory where you can kind of, and that's kind of where I see us at now as an industry, we're not going to have then 12% 15% growth. We're going to kind of keep chugging along, and I think that by using some of the AI tools, and again by taking care of your employees, you'll still see steady growth on the bottom line as well. So, I can see why it's attractive. I really can't, but don't get me wrong, I mean, we all know it's still competitive, right? It is still competitive out there. This industry has always had a low barrier to entry, right? I mean, you can, you know, we all know, I mean, you can, you can start a vacation rental company with low capital, and you can go out and say, hey, guess what, we can do it for less, and we're going to manage your home for less. So, there's always been this low barrier of entry. I think that will. Always be there, so really the people that are going to shine are the people that are going to be able to capture what you talked about earlier, a little bit of AI. We haven't touched on the distribution channels, but I mean that's all changing as well, in terms of how people search and how people kind of, because the distribution channels, I mean, look, we're all guilty of it right now. I mean, you go to go to Google, you say, 'Hey, I want to go to.. I want to go to Vail, Colorado, and you're going to get, you know, some results right there. And as you start to use whatever AI agent you use personally, and that starts to know your, your habits, suddenly when you say, 'Hey, I want to go on vacation, your AI bots going to tell you, 'Well, hey, I know your habits, here's where you need to go, and I've already checked the inventory, and

Annie Holcombe  40:41  
yeah,

Alex Husner  40:42  
and book on VRBO or Airbnb, because in the

Annie Holcombe  40:45  
past, yeah,

Alex Husner  40:47  
it's got to be interesting, and we just had an episode that came out today, the day that we're recording this, actually, of the great AI debate with Richard Vaughton and Mark Simpson, and we talked a lot about this, but I mean the property management companies that I work with, I mean, I'm seeing across the board, even ones that were legacy, very strong percentage of very high direct booking rates, you know, OTAs are really gaining ground, finally, you know, I mean, they're really people, the mass public has now done what we were afraid of, you know, six seven years ago, that they really do associate vacation rentals with Airbnb, primarily. You know, and right after that, VRBO, and so the tough part is, you know, if you can't be beat them, join them, you need to use the OTAs to be able to use that as a way to generate new, you know, customers, but to be able to get them to book with you again in the future, and I think even that premise, even if you're doing all the right things, is still becoming very hard, because you have, like, VRBO with one key and the rewards and everything, that it's like they're making it stickier on that side, that somebody might, even though they know they could book direct for less money, if they know that they're getting points from a stay that could still be more persuasive to them, so it's going to be, it's going to be hard at the end of the day, but I think you know when we look back, even just in a couple years from now, with what AI is going to do for the individual companies and for the OTAs, it's going to be fascinating. We don't know, it's going to be fascinating,

Bob Milne  42:18  
it is, and that, and I think you knew that's where you're going to start to see AI really impact, but look, Airbnb, VRBO, Expedia, booking, like they know what they're doing, like we can all.. oh, I wish we didn't have to pay them, but they know what they're doing, they have great insight in terms of, you know, all the data that they have in terms of trends and how people vacation, where they vacation, so I think, yeah, I mean, you go back, what, how many years ago, we probably were on some panel at VRMA, where we were talking about, hey, we wish we could all just have everyone booked directly, and who are the Airbnb,

Miller Hawkins  42:53  
and

Bob Milne  42:53  
the reality of

Miller Hawkins  42:54  
it is,

Bob Milne  42:55  
they've invested so much money, I mean, look, you can't look at any national sporting event, and you don't have Airbnb or VRBO as one of the sponsors, so of course you have to think that's the challenge, like we all have to learn to how we're going to have our business be successful with them as partners, and I think that's, you know, part of why I think having, you know, good leadership that understands that is going to be helpful, and I think that's where again I go back to our Wyndham days, and all the things that that Rishi and I learned at Wyndham with distribution, I think is going to help us be successful as well.

Alex Husner  43:32  
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Annie Holcombe  44:52  
In my consultancy, Annie and Co. like the conversations about distribution are so different, you know, there's people that are like I'm only on. On that one channel, and I, you know, and I understand. I now understand the volatility of doing that, that that's just wrong. And I've seen people who've, like, they've done the hard work to go get a brand and build a website, but then they never put any attention into it. And then one day they wake up, and they've got 25 properties, and everything's booking through one channel, and they're like in a panic, trying to figure it out. And I think that that's to your point, is like really understanding that there are channels that can bring you business that you never had before, but also different types of guests, and understanding what every, you know, what every channel could do, and you're kind of to your point about the, the, you know, you can't, you can't go anywhere without seeing a channel. I was just in DC last week@booking.com they had their annual click event, and that's typically just their top tier partners, but they let me bring in some hosts to, like, have some roundtable conversations about the industry and stuff, but they're sponsoring Major League Baseball, and so one of the things that we got to do was go stand out on the Nationals field and hit balls, and like, that was incredible. Like, I've never done that before in my life, and so I'm not going to get a.. I told my husband was like, the Dodgers aren't calling me anytime soon to come play for them, but I can now say I hit a ball on a major league baseball field, because this, they did that, but it's, I think it's just they understand where the American audience is, you know, they know where we are. I always, I tell booking all the time, if you guys could sponsor college football like VRBO does, I mean, you, you would be in everybody's mindset for sure.

Alex Husner  46:20  
Yeah, yeah, and then

Annie Holcombe  46:21  
the thing is, that's just money that these, you know, like operators can't spend, even at your size, or even at Vacasa size, I mean, that's just money that you don't have to spend, and you really need to be putting into operations, let them, let them drive that distribution engine, and then you know, again, you're going to build up a reputation, first chair is going to become a brand in those ski markets that people are going to recognize, and as they go back to rebook their ski trips for future, sure, they're going to come, but like, let them bring you the new guests, and like, balance it out, and I think that that's just so important that a lot of operators focus so much on direct, and that's just not a winnable thing right now. Look,

Bob Milne  46:56  
the other thing that the component of this is that we sometimes forget about is our owners, right? So the owners, they want to see their home on VRBO, they want to see their home on Airbnb, they want to see their home on Expedia, they want to see their home on booking, and so again part of this whole transition. I mean, one of the, again, we could do a whole nother podcast on the actual transition, because taking the all the reservations, what you know, we call these carve outs, you know, all the reservations that were in Vacasa, moving them over to first chair, and then getting them all out on the distribution channels where they actually were, and then getting your all of your inventory live on the distribution channel. The first, your owners are the first ones to tell you, hey Bob, I was just checking my inventory, and I didn't see my home on VRBO. What's up with that?

Annie Holcombe  47:46  
Yeah, exactly. Yeah,

Bob Milne  47:48  
you can't lose sight of the value of that as well. So, I think there's, there's, there's a lot of interesting things happening, but I don't think people would have, would have figured that that the channels would be as important to your owners, who are your ultimately your clients, in terms of visibility, right?

Alex Husner  48:06  
Yeah, for sure, they want to see that. And I think for a long time, property management companies, I mean, they used their direct booking success and what they had built, as you know, they kind of looked at it as a moat around the business that if you were really good in your market there, you know, nobody else has been able to achieve what you've gotten, if you're that high in direct bookings, and that you have so much traffic, and everything else, but these days, you know, it's like that, that the playing field is leveling more now, that you know, you could start a property management business tomorrow, and you could be really prepared, and you know, know how to do these listings, and have the right tech behind it and be able to compete with somebody that's been doing this for for much longer, but at the end of the day, it's like, okay, if, if that's not a selling point, anything anymore to say we put your properties on all these sites, because we all do that now, like, what is the selling point? And you know, you can still say, of course, that if you do have a lot of direct bookings, and you do drive traffic, that's for sure, is still valuable to say, but as far as just looking at the OTAs, it's like now that argument needs to be stronger, of yes, we put, of course, we put your properties on all those places, of course we do, but what are the things that we do to optimize that, like what is it, what is our secret sauce, or our, you know, special formula there of how we, you know, get you the bookings on those channels, how we keep the guests happy, how we get the guests to come back, and I think that's more of the story that's going to start to play out as you look at homeowner marketing and how people are positioning their companies

Bob Milne  49:34  
in reviews, like I think ultimately, you know, that you've got to have those review scores, because we're all guilty of that. I mean, the first thing you say is, "Okay, what's the review score look like? So, to me, it comes down to, I mean, you know, we joke about it, but I mean, I remember operators that would tell me, "I'm not going to list on the channels, I'm just going to do it myself on my deal, but ultimately, once you get out through all the distribution, I think it really comes back to what we. Talked about in the very beginning of your show here today is the hospitality side of it, because however that guest gets to your home, however they get there, you doggone well better make sure that you're taking good care of them, and that they remember the name of that home and where they stayed, and the only way you do that is if you inspire that local team to deliver unparalleled hospitality, because otherwise, then you do, because look, a lot of times the guests will say, oh, I think I booked with Airbnb, or I think, but they don't necessarily know, but at the same time, if you deliver that unbelievable service, they'll remember, oh, I stayed at that home, and it was, it was, you know, view, you know, the they pay by the view home, and I'm going to stay there again, and that's what they'll search on. So I just keep coming back to, you've got to have your distribution, but man, if you're not delivering that, that really cool service, and you don't have that local team inspired, then you're going to be out and competing for that guest again, and that's what we want to try to capture.

Annie Holcombe  51:02  
Yeah, and it's goes back to that thing that everybody's trying to build, and the OTAs already have it, is the trust, and so you have to, we, you, you have to build that trust when they get to the property. My sister is a great example, she just booked a stay over Memorial Day weekend up in the Tinker Tink area, and she booked with Lance and Lane Stitcher, but she booked through Verbo, because she was just looking for a place, but she's going to go back and she's going to book direct with them, but as far as she was concerned, she booked with them, like, she, that was, that was the connection, because she said, I booked with them, and they looked at it, like, oh, she came through Verbo, but you know, I think that that's that's what we have to understand, is like, they've already got the trust capital out there, you want to tap into that, but before we wrap up, I was kind of curious. I mean, you have just the breadth of your knowledge in this industry, breadth of experience. What do you think is something that right now people maybe aren't talking enough about or paying enough attention to that they should be?

Bob Milne  51:57  
I think one of the things probably that we should all be kind of thinking about, and it's starting, you're starting to see it is the changing demands, if you will, of the traveler, and what I mean by that is that you know, you think about, you know, the vacation rental industry and the hotel industry, and the hotel industry was way out in front of us, and we kept kind of playing catch up, but more and more you're seeing that it's not just the home, it's what are what. How do I go about booking it? And we talked about the channels, but more and more guests want the flexibility of really easy cancelation policies, right? They want to be able to, okay, I'm going to book this, and if I cancel, I still get my money back. So, I think we need to be aware that that consumer is changing in the short-term rental. There's remember, we used to be Saturday to Saturday, Sunday to Sunday, seven days old, and then we started to kind of, oh gee whiz, wake up, that's probably not going to work. And I think we're starting to see that there's changing demands in the traveler and the consumer, that the vacation rental industry needs to kind of make sure that we're staying up to speed with, you know, the cancelation is one of them. I think service delivery is another. The point, you know, you just talked about the loyalty. I think people also like to be able to say, hey, you know what, if I'm staying, do I get points? What do I do? That's become, you know, a thing, and it's not like it's new, but we're starting to see it. You know, travelers are wanting to kind of not demand it, but they expect it. So, I think we just get ahead of some of these things that the consumer, the consumer, whether it's a consumer for hotels, airlines, or whatever. What are we kind of staying ahead of, or being on top of? Because it's not, it's not the seven day, it's not. Hey, you cancel, you pay 30 days out, you don't get any, any relief if you cancel. Those are the kind of things that we're seeing. We have to be kind of on top of more and more, same thing. More and more of our guests are wanting to see the ability on the site be able to package, you know. So, again, packaging used to be some, the hotels were marvelous at it, you know, booking.com marvelous at it, Airbnb marvelous at it, but the short-term rental people, I think we need to start having some of those options for guests as well. How do I put a package together that's really simple, not difficult, like, oh, I've got to go to the West, let's say, yeah,

Alex Husner  54:19  
they want choice, they want simplicity, and I think you kind of said this in different ways, but it's like, you know, Airbnb and VRBO, I mean, all the OTAs, they've, they've invested millions and millions of dollars in testing on their sites and their UX and UI, and I mean, conversion rate optimization, all of that stuff that, you know, a regular property manager can't come anywhere close to that, but it is behooven upon the website providers within our space, I would say, to up the game a little bit, because that you can for sure tell a difference between Airbnb versus, in most cases, a local vacation rental site. They don't look the same, so it's going to be interesting

Bob Milne  54:58  
to see, for sure, Alex, we hear. Launched our first chair website, and you're welcome to go to a first share.com and look, I can tell you that it was, it was far more challenging than I thought, in terms of because that bar is up here now, right, and like, like, again, I'm pretty bullish on the Vicasta site, like, we have a Vicasta has a really good sites, the Costa, though, does well, because they got the two technologies talking to each other, but the bar is higher, right? So, before, if you, your small vacation rental company, you said, "Oh, okay, I'm just gonna get a website, and if you can, if you can actually search and book home run, home run, ding, ding, ding, but now you go to VRBO, Airbnb, Vikasa, book - those sites are pretty darn good, you know. Let's be straight, they are.

Alex Husner  55:48  
Yeah, yeah. And it's in the little details, you know. That I mean, you tell a website company that you want the font size one point higher on the bedrooms on the search results, and they think you're crazy, but it makes a difference. yeah,

Bob Milne  56:04  
we ponied off of, I think, y'all know, like, so inhabit own streamline, streamline, and as well as, as, as blue tent, so we were able to pony off of and use blue tent because of our streamline connection to help us with our website on first chair, so I mean, I think I'm out ahead of it, but at the same time I think you're absolutely right, like, like those websites, those, the big channels, the big distributors, they're putting a lot of money back into their technology as well, and it shows, and I think it's, it's, it's a bar that we're that we're going to try to keep up with, but it goes back to what we said earlier, you know, if you've got your, your inventory out on all these channels, and you've got your own website, you're kind of in the best of both worlds there.

Alex Husner  56:47  
Yeah, exactly. Yeah. Well, Bob, this has been just wonderful to have you on, and I can't believe that we've never had you on the show to this point in all these five years we've been doing this, but I think it was, it was aligned that we were waiting until something big like this were to happen, perfect opportunity, but super excited for you, and congratulations again to the first cheer team, and we're gonna be rooting for you guys, and wish you the best of luck this year. But if anybody wants to reach out, what's the best way for them to get in touch with you?

Bob Milne  57:19  
Well, they can reach out on LinkedIn, though. I find, and then probably need a little bit of a little bit of a update on that link on that deal, but they can also just reach out to me on my, my email. So, yeah, that's Bob dot Milne at First chair.com Go to our website, our website, you know, be anxious to get feedback too, if you go to go to our website, firsthere.com I really would love feedback, because it is kind of a, it's kind of a new deal, and we'll see how we're doing, but I'd love some feedback on that. And look, I really appreciate you having me on. I mean that, I mean, it's.. I've known both you for a long, long time. Respect all you do for the industry, and who knows, maybe I'll, maybe I'll put my name in the ring for another stint on the Verma board one of these days. I

Annie Holcombe  58:10  
mean, it's, it's, you know, the, the opportunity to apply is open right now. Get your resume in there. Yeah, I would not be

Alex Husner  58:21  
surprised with that, but no, for sure. I'm already on your site anyways, as you were talking, but I'm excited to roll through it more. But if anybody wants to get in touch with Annie and I, you can go to Alex and Annie Podcast. And until next time, thanks for tuning in, everybody.

Unknown Speaker  58:37  
Bye.

Transcribed by https://otter.ai