2024 Travel Predictions with Simon Lehmann

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In this podcast episode, Mark interviews Simon Lehmann, a 20-year veteran in the vacation rental industry. They discuss 2023 predictions and reflect on past crises like SARS and 9/11. Simon predicts a potential shift in the short-term rental market, cautioning against complacency despite recent successes.

Simon's background, including his role as CEO and involvement with HomeAway, is highlighted. The podcast emphasizes the universal challenges faced by hosts globally. Simon shares insights from international conferences, emphasizing the industry's willingness to collaborate.

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Podcast episode peek

[00:00:00] Mark: What were your predictions coming into 2023 for the trends? And, more importantly, what have you seen sort of come to fruition on the back of it? Those that have come true or those of haven't.

[00:00:10] Simon: Having been in the industry for 20 years, we have seen a lot of crisis changes. We've seen SARS, we've seen 9/11, we've seen the subprime crisis, where interest rates went through the roof, uh, uh, real estate markets collapsed.

[00:00:23] So we've seen a lot and we have seen how the market reacts to that, especially in short-term rental. The biggest. A trend that we have predicted in 22 and I put that in a, in a small analogy, you know, when the sun is out in the morning, you in 99. 9 per cent of the time you forget the umbrella at home, right?

[00:00:44] Having a blast. Can I get it on the Boostly podcast? Boostly like Bruce Lee cause it's so hard and the T is loose leaf, making up those rhymes. Don't write it. Just do it loosely. If you want my respect, you better put it directly. Here are the words in the podcast. That's what comes next.


[00:01:01] Mark: Good morning. Good afternoon.

[00:01:02] Good evening. And welcome wherever you're tuning in from around the world. This is a very special edition of the boosting podcast. And this is an extract that was taken from the very recent book direct virtual summit that I hosted in front of 5, 000 hosts. This section was a very special fireside chat with Mr.

[00:01:22] Simon Lehman of AJL Italia. It went down so well that I decided to clock it. Drag it out from the virtual summer and put it as a very special podcast recording for you all to enjoy So if you missed it if you watched it, but if you wanted a recap a few weeks later This is a perfect chance to do so. So without more being said let me hand over to myself And Mr.

[00:01:45] Simon Lehman And the book direct virtual summit, uh, side note, if you would like to see us do the book, direct virtual summit again in 2024, leave a comment below hashtag summit S U M I T or S U M M I T. It's been a long day.

[00:02:02] Simon: Yeah. Mark. It's sensational to be here. Yes. My Christmas hat. He's already on, my hat, um, to get the festivities going actually, and I'm lucky enough that my 12-year-old daughter is in the kitchen making dinner for me as well.

[00:02:15] So, uh, by the time we're done, we can walk into the kitchen and my other three children are going to be home by then. Uh, Simon Lehman, I'm a vacation rental enthusiast and passionate about this industry. I've been in the industry for 20 years. I had the pleasure of being the CEO of the largest property management company in the world for nearly 10 years.

[00:02:36] And as you can see behind me, I was also part of the HomeAway board. We sold that to Expedia. So I've been in the online vacation rental space for 20 years. I've invested in several different companies. And now we're running AJL. AJL is a consulting firm specialized And focused on short-term rental and vacation rental.

[00:02:54] So we help any stakeholder in the short-term rental industry to navigate in this very complex and interesting, uh, hospitality vertical, and we love STR from head to toe. Yeah, just very quickly. I joined the board of HomeAway at the time called HomeAway, which was probably one of the largest listing sites in the world and was listed on NASDAQ for You know, 3 billion U.

[00:03:22] S. dollars and Expedia acquired that in 2015 for 3. 9 billion. So, and then eventually they took that over, started to integrate, and then also rebranded it back to VRBO. So now it's called VRBO, but it used to be called HomeAway, VRBO was one of the acquisitions that HomeAway did. And now Expedia rebranded it back to, um, To, um, to Verbo.

[00:03:51] So now Verbo is entirely owned by Expedia and was acquired in 2015. Unfortunately, I didn't remain on the board. But yeah, it was a pretty big transaction.

[00:04:01] Mark: You can see the level of the guests that we have in here. And I'm so excited to be able to have Simon on my rolodex. And when I put together the idea for the summit, one of the first people.

[00:04:10] I reached out to Simon because I wanted to get him in front of everybody. Because, um, today's little fireside chat is going to be, um, about predictions in the state of the industry. So what I love about you when I listen to you on podcasts, is I'll see you speaking at events, et cetera. You, you're very, very knowledgeable.

2023 predictions

[00:04:27] And let's just dial it back to sort of this time last year. So end of 2022, what were your predictions coming into 2023 for the trends and, more importantly, what have you seen? Sort of comes to fruition on the back of it. Those that have come true or those of haven't, and if you can just sort of go down those sort of routes.

[00:04:46] Simon: So let me start this way, Mark. I mean, I've been in the industry for 20 years, and we have seen a lot of crisis changes. We've seen SARS, we've seen 9/11, we've seen subprime crisis where interest rates went through the roof, uh, really state markets collapsed. So we've seen a lot and we have seen how the market.

[00:05:05] Reacts to that, especially in short-term rental. So first of all the good news for everybody in STR, You are in one of the best and the fastest recovering travel verticals that are out there that can master Um challenges the best now and while we have seen so many, uh different crises or changes in the market from a macroeconomic standpoint, but also down to To the level of a unit or two in terms of interest rates and investment properties Airbnb type platforms have helped to fuel the real estate market.

[00:05:42] Um, but overall, I think the biggest trend that we have predicted in 22 and I put that in a small analogy. You know, when the sun is out in the morning, 99. 9 per cent of the time you forget the umbrella at home, right? Because you see the sun, the umbrella is lost in your mind. And I closed the conference last year with an umbrella on stage while everybody had record years.

[00:06:10] In terms of ADR ref par occupancy, everything was through the roof. We couldn't do anything wrong in 2022 supply growth. Demand grew. We had record ADRs homeowners were spoiled. I took an umbrella on stage. It was actually in Miami where the weather was nice. I said, guys, don't forget the umbrella because it's going to get dark out there.

[00:06:30] And when, when you, when you, when you were celebrating your successes, you should think what is happening. And we've seen it before with COVID, how, how hard it's been for the industry, you know, demand dropped immediately. Businesses collapsed. Restructure businesses. There was no cash flow. I said guys have we learned anything?

[00:06:49] No, we're not because we remain opportunistic, right? So things came back up again. Everybody was hunky dory. Yeah, we throw everything on Airbnb We have that demand but I said guys this not gonna this is not gonna repeat itself the same way The ADRs will not continue to grow, and the demand will not continue to grow because we as a short term rental industry are not capable to continue to deliver a consistent product experience to our guests and we will lose a lot of guests back to the hotels.

[00:07:21] And demand will drop. This means that supply will increase. So the first time in August this year we see supply growth. Overpassing demand growth. So that means an immediate drop of ADR, a drop in occupancy and ref parts.

Biggest takeaway this year

[00:07:40] Mark: What has been your biggest takeaway or takeaways from this, this year? Seeing that we're coming into December, we're coming into the final, final month of the year.

[00:07:49] What, what have you sort of know to be true now? And, what can you share with, with everybody from everything you've

[00:07:54] Simon: been doing? Absolutely. So first of all, here's the proof. So I've been to so many conferences for the last eight months, the only one. I missed VRMA this year in the U. S. because This year I focused on smaller events, which was quite incredible.

[00:08:09] So we've seen the first vacation rental conference in Croatia ever. We saw the second vacation rental conference in Australia. We saw the fourth convention in Mexico, Cancun. So these side events just show how hungry new markets are to learn, to share, to do whatever. I mean, one thing. So there's, there's several things.

[00:08:32] First of all, my learning is wherever I travel, Mexico, Australia, Europe, or the United States, we do the same thing. We connect guests with owners. That's all we do, right? So in simplified terms. So everybody, on the chat today and who listens in, do not worry, your pain points are universal. Okay? So anybody from Argentina or Chile or Peru, Or Mexico will share the same pain points with anybody who rents out in Paris or London uh with slight differences in terms of regulations in terms of Legal requirements how you do financial reporting or anything the like and the boys in Australia do the same thing With the difference to have their 10 hours ahead of us, right?

[00:09:16] So At the end of the day, we are in a short-term rental. And that's always for me, a nice takeaway to have had the opportunity to travel internationally, to talk to these different markets and see what their, what their points are that they're challenged with daily. They're total. Universal. Now, the second thing is each market has a different level of maturity, right?

[00:09:42] So certain markets like a European market as a lot more maturity has been around longer. The awareness of vacation rent is a lot stronger businesses. I've been here for a long time and there are new markets and I can see parallels. And for me, one of the highlights was, for example, Croatia, where the appetite for a conference was massive, to see people that have been competing with each other for 10 years, they've never seen each other.

[00:10:11] This was like, this was an amazing takeaway to see how much. This industry is prepared to share knowledge and, get people like us, we are not worried about sharing the secret sauce. We try to help each other because the industry will remain highly fragmented.

[00:10:31] Mark: Having a blast. Gonna get it on the Bruce Lee podcast.

[00:10:34] Bruce

[00:10:34] Lee led Bruce Lee. 'cause it's so hard on the tee's loose leaf. I looked up those rhymes. Don't write it, just do it loosely.