← The David Greene Show
The David Greene Show
David Greene Show I Building A Badass Site For Your STR (and how to save when traveling) I Episode 125
01:18:15
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- [00:00]
A
Welcome to Real Talk Real Estate, the show where we cover how to build wealth in real estate with no fluff, no BS and no sales pitches. I'm David Green and I've been doing this for over 10 years. I've seen the ups, the downs, and everything in between. This is the show where we pull back the curtain and show it to you too. So if you want to build wealth through real estate, or you just love learning about it, you found your home. What's going on, everyone? Welcome to Real Talk Real Estate. I'm David Green and this is the David Green Show. And I'm joined today by by a Vanguard frontier person. What would you call yourself? Gil Chan of Crafted Stays. Describe yourself to the audience of how you see yourself in the STR space.
- [00:41]
B
I would say maybe a disruptor, innovator. I come from the tech space, the startup space, so I feel like I'm not that unique. But maybe to the STR space, I look at things very, very differently than other folks. Yeah.
- [00:54]
A
And that's why you're here today. Not just because you're a disruptor, but because you're disrupting something that needs very badly to be disrupted. And that is, frankly, in my opinion, the guests that stay at a short term rental that hold the owner hostage because of the five star ranking system in Airbnb's algorithm. Now, I don't want to speak for you, Gil. Maybe you don't see it as bad as I do. So let me just give a disclaimer. That was my opinion, not gills. But why don't we just start off by you explaining what problem you saw in the industry and why you started crafted stack days.
- [01:23]
B
Yeah. So I think we, my wife and I, were property owners, property managers, ourselves too, or hosts. And back. We started during the beginning of the pandemic, I think 2020, 2021. And we bought our first cabin and we had probably 95% of our bookings coming from Airbnb. And that was good. It felt great because what other asset class can you, or even asset that can you buy? Put it in service and immediately get revenues just like that. You didn't have to do any marketing, none of that stuff. But over time, we felt like we were at the mercy of the OTAs, primarily Airbnb. And we wanted to build our own direct booking website. And we either had the choice of building it on the pmss, a lot of them give you free websites. And if we wanted anything better, we would have to pay an agency $6,000 to $10,000 if sometimes even more to better website. And I come from tech and that just made no sense to me. I was working in E commerce. My biggest partner was Shopify. And it hit me one day, it was like if I wanted to build an E commerce store, I wouldn't go and hire a bunch of developers and have them build our E commerce store. I would sign up for a Shopify account, add our products or properties onto it, and by the middle of the day I'll have one of the highest converting websites. And I look back at our industry and hospitality, there wasn't any type of tools like that. So I coded this first version, I shopped it around with a bunch of my STR Mastermind peers and they collectively convinced me to leave my W2 and go all in. And I hired the best engineers I've had a chance to work with over the last 15 years. And it's been amazing. It's been absolutely amazing.
- [03:02]
A
Now you said pms, that stands for. Why don't you just explain what a PMS is and how they're used in this space?
- [03:07]
B
Yeah, so PMS is property management system. It's typically used by property managers that want to manage their listings across different channels there. So if you're one property, you might be listed on Airbnb and one day you might want to do vrbo. And you can do it somewhat manually. You can create a new listing on VRBO, you can connect them through iCal. But as you grow and as you operationalize things, it's really, really difficult to manage across different channels and make sure you don't get the bookings and make sure your rates are synced across. And that's where the PMS steps in. A PMS allows you to basically centralize your entire operations and they all have very similar functions where they'll do, they'll make sure that your listings get populated across the different channels. So when you want to go booking.com or any other channels, you can easily just add a new one on there. They make sure that your rates and availabilities stay sync across all of them, all your descriptions, all that stuff. And then they have centralized messaging so you can go to one inbox and see all your messages. So that's kind of the primary use case. And that allows you to do a lot of automations. It allows you to really almost put your short term rental on autopilot in some ways at least the operation sides of things. And so we connect into a lot of those. Those are, we have five PMS partners that we work with to help them build better direct booking websites.
- [04:30]
A
So this would be. If you've got a property and you want to put it on Airbnb and vrbo and booking, you don't want to have to worry about, I just got a booking, but is my calendar open? Did somebody else book it?
- [04:41]
B
Yep.
- [04:42]
A
Or maybe messaging. And you don't want to check three different apps and worry about missing one. They all come into this property management system and then you just check that one app and your calendars are synced, your messaging is synced, your listings are synced, your pictures are synced, all of that.
- [04:56]
B
Right, exactly, exactly. And it's very helpful when you go from that first property, the second property, and as you kind of scale up there, almost like, I don't know how, like from a data perspective, like how big the concentration is, but typically if you have more than three units, you're gonna want to put PMS in place. Yeah. Especially if you have a team as well, too.
- [05:15]
A
Yeah. Because then your team doesn't have to check all these different apps and then you get, oh, sorry, boss, I missed that one. And well, now we got a two star review instead of five. And now no one's going to see our property for the next six months. It could be devastating with the way it's set up now.
- [05:29]
B
Yeah.
- [05:30]
A
So you saw this problem because you're an owner operator yourself. You're. What's that? There used to be a saying for the guy that did the men's hair club. It was like, I'm not just the owner, I'm a user or something. I need to look that up and not butcher it. But you're dealing with the problems that property owners deal with themselves and you thought, okay, I've got my pms. And most of the time your PMS gives you a direct booking website, which sounds great, but when you hear what I just said. But why don't you explain what that direct booking website actually turns into when it's free?
- [06:02]
B
Yeah. And it's, it's different across the different PMSs. But almost all PMSs will give you the ability to build a direct booking website. Some of them charge, some of them don't, some of them have fees. But they give you a pretty basic website to start off with. And basically what they do is they'll give you a landing page that has your hero image and some tagline they could put, and then they list all your properties out. And that's pretty much it. It's very functional. So if you have someone that has stayed with you before you've given a good relationship and you just want to get send them a link to book again. That's totally functional for that. But if you wanted anything more, if you want to talk about the things to do in your area, you want to rank on SEO, if you want to tell them about your story and really ultimately build trust with a brand new user. It's really hard to do that on a kind of cookie cutter website. And so typically what you do is you end up building or going to an agency and say I want a direct booking website. And hopefully you go to an agency that only specializes on direct bookings. But the challenge there is that they'll charge you a ton of money to do it. And so that's kind of where we step in and kind of why we're different. So you get all of the perks of working with an agency, you get really well polished websites, you get mobile navigation. We take it a step further where unlike building it with an agency, a lot of times if you go to an agency, they'll build out your website specifically for you. So it's bespoke for you. The challenge is that things are constantly changing. So anytime you make a change, you would have to then go back to the developer and maybe you'll have them either on retainer or you'll pay them to do it because it's time and energy for them to make those changes on us. Whenever there's a change, we make the change and everybody using the platform get benefits from that change. So an example was in February of last year, Hospitable opened up their APIs to allow third parties to pull reviews. And so before you would have to manually add your reviews to your direct booking website. And so after that change we made an update to the Hospitable connection and everybody using Hospitable had the reviews automatically synced to the website. They didn't have to use plugins, they didn't have to use anything extra. It just worked for them. So the, the platform is constantly changing
- [08:20]
A
and you don't want to get left behind because you have a really cool website. There's a change that takes place and you don't have time to deal with it. Or maybe you didn't even know what happened. You're busy dealing with other stuff. A lot of short term rental owners, this isn't the only thing they do. This is a thing they bolted onto a different business or a life that they've already built. So unless you're paying a lot of money to Be in a group that's telling you about all this kind of stuff, you might not even know that there was a change that happened. And now you're marketing DirectBooks and you don't realize it.
- [08:46]
B
Yeah, I think like, like, like a very practical example is everything that we've seen with how ChatGPT is changing how people are searching for properties. And some folks do it well, like the big hospitality brands, the big hotels, they, they know what to do, they're keeping a pulse on it. They have full marketing teams thinking about this. But for a smaller operator, how do you make sure that when someone searches for a stay specifically in that area, that you even have a chance to show up in the search? And so we on our team, we pay very close attention to a lot of the changes inside the industry. And so for one, for instance, one of the changes that now ChatGPT and some of the LLMs are starting to surface products and properties inside the chat. So you'll notice that if you ever do a search on like what's the best product for or what's the best coffee grinder, you can now have this little card view of what the different options are, what the pricing are, what's the image of it, what's the title. And the way that those brands are able to do is that on their website they're packaging information so that LLMs can pull that directly from their website. And we're now doing the same thing for all of our properties. So anyone that's on craft of stays, we've already really organized all that information so that ChatGPT, Anthropic and Gemini can pull that information directly from your website. And so we made that change third, fourth quarter of last year. Yeah.
- [10:13]
A
So what you're getting at here is we are not always paying attention to the fact that the way people are finding a place to stay isn't static. It started off with, hey, Google, I want to find a place to stay somewhere. And you had to be at the top of the Google search. And then these online travel agencies, OTAs came into place. You had vacation rental by owner and then you had Airbnb and you had to learn how do I win with those algorithms? What do my pictures have to look like? What are my reviews have to be? What should my listing description say? How do I trick that person's brain to look at my property and book it? And now people in their never ending pursuit of being efficient and Lazy are asking ChatGPT, find me a cabin that's this big in this area. With the best possible price and whatever. And that's a mystery as to how Chat GPT is figuring out where do I go find that cabin. But it sounds like what you're saying is Chat Gemini, these different large language models are searching maybe the Internet and they're finding direct booking websites, whereas a human being maybe wouldn't have found them buried on page 27 of Google.
- [11:20]
B
Yeah, I mean, and we're also packaging where even Google is able to pull the same information there. So Google Vacation Rentals and a lot of those, like, little cards that you might see, like location recommendations, those are because that website has tailored information for search engines. So it goes to all the lms, but it also goes to very traditional search engines. Google, Bing, so on.
- [11:45]
A
Yeah, I was very pleasantly surprised to see that when I launched my website, which is with you guys crafted stays, I got a direct booking almost immediately. And I think it had to do with what you just mentioned. Google Vacation Rentals, you have to actually put your property on there. I don't know if Angela did it for me or if you guys facilitate that. Maybe you told her she needed to do it. But we got a direct booking and the lady put her email in wrong. And this is how I found out about it, because she found me on Instagram and said, hey, I'm really worried. I tried to book one of your properties, but I never got a confirmation email. I don't have a check in code. Did I just get ripped off? And I was like, what? How did you find us? Like, she's like, well, I found you when I was Googling places to stay in the Smokies and I booked on your direct site. And then when I didn't get an email, I got scared. So I found your Instagram and then I messaged, I found your number on your Instagram and I text messages you. And I was like, well, props to you for being that aggressive, like you're a pit bull. But yes, you're fine. We're not it. We're not scamming you. She had just put in her email wrong in the landing page. And so she never got the email with the confirmation details. But this is amazing for several reasons. One, I saved about 18 and a half percent that I would have had to pay Airbnb, which is significant. That's not even the best reason. Two, I don't have the fear that she's going to show up and take a picture of the air handler and the vents and the deck and any dry rot she can find. She's not going to be moving the couches and looking for some dust underneath them, or opening the oven and looking in the very back of it and trying to find if there's some grease back there, and then saying, I want $1,800 off my stay. I don't have this place where I'm really just stuck with, do I give you a bunch of money and hope you leave me a good review? Which, guys, if you don't know, this is what the game is on Airbnb. Every host out there is throwing money at guests that, frankly, I think you'd be better off to throw into marketing your own properties and avoiding this. And I get a potential person who's going to come back to my place. They're not going to go back to Airbnb and look to see who's on sale, who's got a discount, what's the new place? Am I going to stay at a Disney theme place or a Marvel theme place? They're just like, I like them, I like David, I like his team. And then we offer people discounts when they book direct. So now they're thinking that they get a big savings. I win, they win. The only person that loses is the online travel agencies. And that's what I love about direct bookings. I'm sure that had something to do with why you wanted to start the company. Do you want to just share a little bit about your experience with why booking direct is better?
- [14:16]
B
Yeah. So it kind of goes into the fear side of things. So you mentioned the commission savings, you mentioned the autonomy ownership. For us, it was in the very early days, it was really that we had too many eggs in that one basket. If at any point we dropped from page 12 to page 12, like, we have revenue targets, we originally got into this very early on as an investment, and we need to make. Make sure that our investments pay off there. And we just felt like we had too many eggs in that one basket. And over time, we just started to diversify, not just direct, but on the other OTAs as well, too. And I think that that's a much healthier way, because at the end of the day, this is an investment, this is a business, and you need to make sure that the money that you put in that you can get returns on it. So it was really that fear that, oh, if we end up getting deranked, are we still going to be able to meet our revenues? And if we had relied solely on Airbnb, no, we would not have. And that was even before the changes in 2025 there's been a ton of changes. In 2025. You mentioned the commissions like that commissions was a much more pleasant, like much more palatable before where it was shared between the host and the guests. And now it's all on us and the guest doesn't feel like, oh, can
- [15:32]
A
you share the numbers on that for people that maybe don't own a short term rental?
- [15:35]
B
Yeah. So in the very early days, or not early days, but in very early of 2025, we as hosts pay, I think it was like three and a half percent on commissions, meaning $100 booking will pay $3.50 in order to get
- [15:50]
A
the booking from Airbnb or VRBO.
- [15:53]
B
Exactly. And then the guest also pays a fee as well too. And then what ended up happening is Airbnb said, no, we're now going to. And I think it was like that the whole, the guest fee was like in the, in the teens. Like I think it's 12% on average, but it kind of varies market by market there. But that was shared. So a guest would see that Airbnb is charging them a fee and they understand that. But now that fee is completely hidden and it's all on the host. And now hosts pay a combination of around 18 and a half percent fee that the guest never sees and that we eat against our, our top line revenue. There's. And what that means is that our cleaning fees have increased. Now it looks more expensive because now we have to make sure that we pad against it. And so because we don't make any revenues off of our cleaning fee, we pass on exactly what we get charged from our cleaners there. We're not, that's for us, it's not a money making business. But now if Airbnb is taking a cut, we now need to charge a higher cleaning fee on Airbnb.
- [16:59]
A
Yeah. Now the problem is if you go too high, because I've heard a lot of people say that, well, I'll just pass it on through the cleaning fee. Well, Airbnb changed the way that guests see the pricing. So now what they see is the total price. So you may be priced less per night, but your cleaning fee is higher. To the guest, you look more expensive than the other property and so they just pick your competition. And now not only did you lose the 12%, but you lost 100 because you didn't get a booking at all. And with, with the market being as competitive as it is for short term rent rentals, this could be devastating to people.
- [17:34]
B
Yeah, yeah. So there's that change. And then they also changed like the chargeback policy last year. They where is if a guest, if they're not able to get money from the guest, their credit card was wrong or whatever it is, then we end up eating it. We end up basically giving a free stay out because Airbnb is not able to reconcile that payment there. And then it was like they also introduced experiences where they're now allowing other people to have services inside your property without really your say into it. So all in all, like, they're making a bunch of changes, which is good for the guests, which is good. But it comes at a very unbalanced compromise of the host. And I think that's why there's such a big boom in direct bookings right now.
- [18:19]
A
Yeah, I don't know in my life if I've ever seen a company as hated as Airbnb is among short term rental operators. If you don't have one, this might be surprising to you, but in a very short period of time, it went from, this is the best thing ever. People can find a place to vacation. They don't have to stay at a hotel. It's super easy. I can take my house and throw it on Airbnb. I can buy a house in a neighborhood I never could have got into, and I can make it an Airbnb. I can use my design skills and my rehab skills and my hospitality skills in real estate for the first time ever. Where before it was all just about, are you a rehab person and do you new numbers and can you just get on a phone and call people all day to find a deal? Now a whole new skill set comes in and it has shifted insanely fast. Their customer service is terrible. There's, there's literally videos going around that guests are teaching other people. This is how you can get a free stay by threatening complaints. And like you said, there's been this mass demand for I need a direct booking site so that I'm not held hostage by all this.
- [19:19]
B
And I think that's what, that's ultimately what it is that like, if you are a host on Airbnb and you've been there for the last five years, you slowly feel like you're being held hostage there. That's what it really feels like. And I think you're absolutely right about the whole, like, the customer service has gone down. I don't know if you've had to dispute a review, but now a human's not even reviewing a review dispute. There's an AI in there and you get two tries and you don't do it. Even if you get a human that agrees with you, that bot now says, oh, that review cannot be removed and that review will stay on your. Stay on your platform or on their platform indefinitely.
- [20:01]
A
I had a story about a month ago of a gentleman, let's call him that, that showed up on my property and immediately sent 10 pictures of everything he saw that was wrong. And Gil, it was like the picture was hanging crooked. It should have been straight. It was. I picked up the rug and I found that there was some dust under this huge rug. He had to move the coffee table so he could get to pick up the rug. It was an obvious. I might as well. Oh, there was leaves on the deck. He felt like somebody should have gone to sweep up the leaves before he arrived. This was somebody that we had just dropped the price pretty significantly to get like a last minute booking. That's usually when these happen. So I tell, we ask Airbnb and we're like, oh, we send a cleaner. The cleaner says, this guy was so rude to me. They were absolute a holes. I cleaned stuff and he started telling me to get an extension ladder and climb to the roof and he wants me to clean stuff. That guy's crazy. We tell Airbnb we're not comfortable with the guests. We would like them to leave. Airbnb says, okay, we'll facilitate that. We say, will he be able to leave a review? Two different people say, no, he can't leave a review if he doesn't stay the night. And we are facilitating this. So he gets to leave. He gets all of his money back. And I'm like, dude, just go. I know what you're doing. You're not going to extort me for money. Go find somebody else to play your games with. Well, guess what? He leaves a one star review. And Airbnb says, we're so sorry, but we can't take the review down.
- [21:19]
B
Yeah, I think that the rule is if they, if it's past the check in period, like 4 o', clock, then they can leave the review. So, like, if you had canceled them before and you wouldn't have, like, that's not going to happen because they have to like walk into your property to even, to even have.
- [21:33]
A
But why would Airbnb staff tell me on the phone, yes, we will not let them leave a review. And, and then when we talk to them, they're like, sorry, don't know who told you that.
- [21:42]
B
Not our problem. Yeah, I think that's a miscommunication. On their side or mistraining on their side.
- [21:46]
A
And that's costing tens of thousands of dollars to me. Getting a one star review is going to decimate it. Right. And that's what people need. All the hosts are understanding if I don't tell the guest, yes, you could have whatever you want. I may. I don't want to give them a thousand bucks, but it's better than losing $20,000 because it tanked where I showed up in the algorithm. And you may have just dropped 50 grand into fixing your place up. And no one sees it if you're not showing up high enough in the reviews.
- [22:12]
B
Yeah. And I think it's a lot of what we call, like, extortion. It feels like ultimately, yes, we're doing this as investments, but the hosts that do really well are hosts that really care about the state. My wife and I, we care about the state. If there's something that we did wrong, we'll send them treats, we'll send our cleaners out there and we will make things right because we ultimately want them to have a good vacation. But there are bad actors also in there that will take advantage of the system. And unfortunately, there's not a lot of tools, abilities, or even support in helping with that. VRBO is much better at that. And I think that they're slipping towards Airbnb's way, but they're still way, way better than where Airbnb is and kind of where they're trending towards. And I don't know if Airbnb is going to change their tune on things, but 2025 was. It was a rude awakening for a lot of folks that now feel like they've helped. They're held hostage.
- [23:10]
A
And I like that you brought up vrbo, because that's the typical first response that I'll hear from the operator operators is they'll say, well, we're just going to try to get more VRBO bookings. But what you just said is the problem, because if VRBO realizes everyone's going to book on Airbnb, if they can go there and get the discounts and they can hold the host hostage, they're not going to book on vrbo, they're going to go book on Airbnb. So now VRBO is in the position where either we adapt and we become evil, or we try to stand our ground and we just lose our business because nobody goes here. Like, everyone's always going to take the downhill road, which is why eventually you're going to have to have a direct booking option here or there's going to be no way to avoid being taken held hostage.
- [23:52]
B
Yeah. Who knows? And each OTA is a little bit different. And though I can, we'll adjust over time, but I think as an investor, as a business owner, you want full control over your business. You want to know what metrics you can control, how you want to train your team. And it's scary having such a big actor have such a big influence on your entire revenues. There's, there's very little in other businesses that have that much. I think a little bit in like Yelp in the early days with restaurants, like, if you had a bad, bad Yelp page, like, it could really hurt you in restaurant business, but you still got a lot of foot traffic there, so.
- [24:25]
A
Yes, that's a solid point.
- [24:27]
B
Yeah. And. But in here, if all your revenues are coming from Airbnb and they, there's
- [24:31]
A
no foot traffic, it would be like if the only way you found a restaurant was you went to Yelp. There was no other way. That's how pretty much everyone's booking properties.
- [24:39]
B
Yes. Yes. And I, I think that that's changing. I, I don't know the, the latest stats, but I think it's hovering around 34% of bookings are direct. And that's upwards from the beginning of the pandemic in, I think it was low 30s, like 31 or 28 or so. It's kind of depending on like, whose stats you're looking at. It's, it kind of ranges there, but it's starting to trend upwards.
- [25:07]
A
Yeah. Now, one of the reasons, or another reason I should say that I really like direct bookings is they're also better for the guest because you can literally offer someone a 15% discount and you would still make more money than if they had booked.
- [25:21]
B
Yeah.
- [25:21]
A
On Airbnb. And you don't have to worry about being. I would much rather give the guests the money than give it to the online travel agency that's doing nothing to help my business. I want to get the word out that when you're traveling, you shouldn't be looking on Airbnb. You should be searching to see who's got a direct site and where should I go? Which is why it's so important that we all have a place that people can find. What's your thoughts on just how important it is for the person who's going to be using someone's short term rental to, to be booking direct?
- [25:52]
B
I think there's, there's benefits in both, both, both ways. I, I Think what's really nice is that, like, as a guest, you have a lot of trust that's kind of built within the OTAs. So I kind of give the OTAs that, like, if you're on Airbnb, if anything ever goes wrong, you don't have to worry about being scammed. But at the same time, I think the hosts that are doing it really well, the hosts that we build websites for, they're all very professional. They're all connected to their pms. Like, these are real listings there. You can't. Like, you can't build a direct booking site and not be connected to a PMS and be listed on one of the other OTAs on there. So for a lot of our users there, you get a lot of the same kind of protections there. Even some of the PMSs that we work with, like Hospitable, for instance, they have damage protection, they have insurances, identity verification that kind of helps on both sides of things. So you know that you are working with a legitimate host there. Um, and then you get the added benefit of saving on fees. Like, you're not paying commissions to an OTA as a guest, you are saving that, and you're more likely the next time. Like, you're not only saving on that one, but, like, next time. David, I'm. I'm booking. I'm booking with you directly. So I. I book with you once directly, I feel really comfortable with. I'm going to indefinitely do it if I ever travel to that area.
- [27:06]
A
Yes. Yeah. And then the host feels like, ooh, I remember you. You were great. I can spoil you. I don't have to worry about being taken advantage of.
- [27:14]
B
It's so different. It's so, so different. And I bet you you've already experienced this with your direct bookings, but I've had a guest at our Missouri property, and we have Schlage locks, which are known to be one of the best locks for. For. For smart locks. And one day the deadbolt just went dead, like you couldn't turn it even manually. And had that been an Airbnb guest, it would have been terrible. We would have a one star review. Will we be marked because the guest isn't able to check in? So we'd be taken off the platform for some amount of days until we proved that we were able to service the property. But that was a direct booking, and the person called me directly. It goes to my line still. We still manage the communication on our side. We don't have a VA to do it, but she called Me. And we're able to get a locksmith out there. She was super welcoming. Like, it didn't. I didn't feel like there's a middleman in between. That controlled me. Anyway, I just took care of the guest. I didn't have to worry about the review and none of that stuff. And again, like, I'm a host that really wants to make sure that people have a great stay and they're. They're really happy. Like, they ended up asking, like, oh, can we leave you a Google review? So I. I completely agree with you. The tone of guests that you get from a direct booking is very different than Airbnb. And I. You think even, like, the different OTAs, like, the guests that you get from a VRBO versus Airbnb are different as well, too.
- [28:43]
A
Very different. You know what I've noticed on Airbnb, because we just had Christmas and New Year, so it's a very busy time. People are going to chat GPT and asking it, how do I get a discount from the owner? Because I'm seeing very similar messages that were all coming through several of them over the last couple months. And it will always say, specifically because this amenity was the reason that we booked your property. I've saw that phrase over and over and over. Right, well, this guest was a very large person. They broke my toilet when they sat on it. It busted the flange and it's leaking now. So we send a plumber and he goes there, and he goes, this is a problem I can't fix. I have to cut in from the ceiling above. Above or from the bathroom underneath that I have to cut in from the ceiling and then I can get to the plumbing. I'm going to have to come back tomorrow. This is a Christmas booking, the most expensive time of the year. And they come back and they're like, we are so inconvenienced by not having a toilet. What are you going to do to help us out? And we're like, well, we've done this, we've done this, we've done this. My property manager still offers them $700, even though they're the one that did it. And I get back that message that says, that's not enough. It's, like, very professionally worded, like ChatGPT does, but it basically said, that's not enough to compensate us for the disruption that we've had during our stay, especially considering that this amenity was the reason we booked the property. And I was like, the toilet. The toilet's the reason that you Booked the. Like, I knew these people are just masters at figuring out how to get the money, and they wanted $1,400. Now, unfortunately, like, once they get it in their head that there's an option to get money from you, the human psychology turns away from enjoying your Christmas, and it turns towards, how do I make a big stink about it? So you have to give me what I want. When there's a direct booking, that's not even an option. It doesn't even pop into their head to do that. You can be the good host you want to be, and you can say, I'm so sorry, the lock is gone. Why don't you do this? Go to a restaurant, have dinner. We'll pay for it. We're going to call locksmith while you're having dinner. It'll be ready when you come back. We're so sorry. You could do the things that you want to do in a common sense environment when you haven't introduced the fact. I mean, Gil, if you tell somebody, hey, if you complain enough, you might get 2200 bucks. Who's not going to do it?
- [31:02]
B
Yeah, yeah. It's getting much more prevalent there. We had something very similar where the guest said that the hot tub wasn't filled enough and we have a hose right next to it, and they complain. And I was like, okay, I'll send a cleaner out there and we'll take the hose five feet away and we'll fill up the tub for you. And then they said that the jets aren't working, so we send the cleaners out there again. And then, of course, they use the same statement that this is an amenity that we. That we. That's the one of the reasons why. And I know it's not because there's a lot of other things to do at that property. There's a mini golf out front. There's a fire pit out front. The hot tub photo is way, way in the back. Even though it's. It's. It is an amenity that's nice to have in this, especially in the Smokies,
- [31:43]
A
but nobody books it just because of the hot tub.
- [31:45]
B
Yeah, but you're right. They are phrasing in a way where it feels like, okay, now, an Airbnb by default will give you one third of your stay back if any primary amenity is not met. So they know that.
- [31:57]
A
That's why Chat GP knows to use that phrase.
- [31:59]
B
Yes, yes.
- [32:00]
A
Yeah. Now, and that's just. We're not wanting slumlords here. We want hosts like you like me that care deeply about that person having a good Christmas. And the way that I see it is Airbnb has unknowingly created an environment that you are rewarded for ruining your stay in. Five years ago, anyone would have picked up the hose, put it in the hot tub, turned it on. They never would have even messaged the host about it at all. But in today's environment, you need to build your evidence for discovery when you take your case to Airbnb to go get your money. So then they have to be like, oh, shoot, he fixed my pots of problem. Where else can I find something? Is the knob loose on the stove when you go to turn it? Can I. Is there a. Is there a spider web on a third story window that I can. Can take it? Like, what can I find so that I can get money back? And I just kind of ruined it for everybody.
- [32:50]
B
Yeah, it's. The hospitality has just gone away out there. It's not focused on that. It's sad. It's sad because in the very early days, beginning of the pandemic five years ago, Airbnb was a really good platform again, like we talked about, allowed a lot of folks that didn't have the skills to market their own property to put a new asset class out there and get revenues almost instantly. A lot of times, people will put their Airbnb listings and they'll get their first three stays booked out within the first 24 hours. And that's because Airbnb does a lot of boosting in the very early days, like when you first have a new listing out there. But I think a lot of us have just taken that for granted for a long while. And now folks are like, okay, how do I combat this? How do I become more independent? A lot of folks are getting much more savvy on the different tools, and I think a lot of the new tools are getting introduced right now because of what's happening on the other side.
- [33:45]
A
Great point. Now you guys can see my direct site. It's coast to coastgetaways dot com. You'll see some of the properties that we manage. Some of my own properties are on there as well. You can see some of the work that Crafted Stays does. We love it. That's why we have you here, Gil, talking about it. What are some things that you've noticed make a direct site better versus ways that people maybe aren't doing as well, that they can improve? Improve?
- [34:09]
B
There's a lot. I think a lot of it has to do with two primary things. One Is are you empathizing with your ideal guest avatar who's staying at your properties? Are you really speaking towards them? So for us it's really family friendly states. We found that when we scraped all of our reviews, we pull them off of all the OTAs and all the other areas that we have our reviews and we found out who stayed at our properties there. And we found out that most of our stays are with families and specifically people with that have children in them. And when we looked at the reviews, it's typically younger children. Some of it has to do with kind of how we designed it, the amenities that we put in there. But once we learn that it changes the way that we message on our website. So you'll see pictures of kids on our landing page, you'll see messaging in there. If you look at FAQs, it talks about some of the high chairs that we provide and all the kids utensils and all that stuff. And that's also in our listings. So just the messaging and even the pictures and all that has changed. And so I think like really making sure that you're relevant to that guest there so that they know when they're booking that place. Oh, this property or this portfolio is made specifically for me. You see this, I see us a lot with dog friendly stays or couple retreats and things that stuff. If you can really pin down what you want to build your portfolio around, that really helps you. In direct bookings. I have seen folks that are now on the property management side that will turn away properties to manage because it doesn't fit their brand. So as a property manager, you're constantly thinking about, okay, if I'm bringing on properties, I need to have a good fit with the owner because if I don't match up with the owner and we don't align with how much we want to spend on the property, how we want to maintain things, the guest experience, that that's like a lot of folks, that's not, that's a non starter. Is the property in a good state? Can we get into a good state? But you're also now thinking about like, does it fit in my portfolio? Especially when you're going direct, because if you're messaging all your marketing, all your emails, the website copy, talks about dog friendly stays and you start bringing a property that's not dog friendly, that's going to start to go against your brand there and start going to dilute it. So the really big property managers that do really well in direct bookings, they have something that kind of Stand behind and they know who you're doing. Their ideal guest avatar is.
- [36:32]
A
Ideally, that is why a property that does well, booking direct is a safer bet, because the only way you can really get away with direct bookings is if your property's in a really good condition. If you're a property management company, if you're an owner, you can probably scam people. But if you own a property management company and you are booking people direct and the property's in bad shape, you're going to be getting nonstop phone call complaints that just ruin your profit margin, because your employees are going to be running around trying to make people happy all day on properties that aren't that profitable for you. Nobody wants to pay property managers, just like nobody wants to pay real estate agents, and no one wants to pay anybody. Right. So margins are kind of thin for everybody. The guests don't want to pay, the owners don't want to pay.
- [37:16]
B
The.
- [37:17]
A
The property management companies have to pay wages to the people to get them to work. That's increasingly more difficult in America to get somebody that wants to, like, work all day long, not work for half of a day. And so if you're managing someone else's property in your direct site and it's in bad shape, it's broken, there's a lot of things that are going wrong. You're going to get rid of it. And so I, I would think that if I'm booking with a property manager company on a direct site, the odds of their properties being in good shape are significantly higher than if I'm booking some other way where they can. You know, you book it on Airbnb and, like, they're just gonna, okay, throw money at you and they're gonna be fine.
- [37:51]
B
Yeah, I agree with that.
- [37:53]
A
So do you. There's also people that will be looking on Airbnb see a property that they, like. I kind of think this is, like, really clever. And they'll notice that the owner has signage about their company. Can you just explain how that process works and how people can benefit from having a direct site that way, too?
- [38:12]
B
Yeah, there's actually a term for it. We call it the billboard effect or breadcrumbs. Basically, what you want to do is on a billboard, you see the same billboard everywhere. You have the same branding everywhere. But I think a better analogy is breadcrumbs. You want to leave little breadcrumbs that lead them back to your website. So you'll see people on the TV on signage, put their property management name on there. So it's Very discreet. But what I have seen people do is actually put the property management name in the description or even as deep as the title itself. And I was surprised that the title was so effective. So for me, our properties will say hosted by Explorestate today. And so on the last line of our 500 character short description, in the very beginning, we say, welcome to Cozy Creek Cabin in the Great Smoky Mountains and we talk about the property. And then the last line says hosted by Explore State today. And so now they have the property name and they have the property management name. So they ever do a Google search, we will be the one that dominates on that. Like it's very easy. Folks will even go, the more savvy folks will do a reverse image search. They'll right click on the hero image or the first image and they'll do a reverse image search. And the website will pull up as
- [39:30]
A
well too, so that the guest can book direct and they can save on all the fees that they would have had to pay normally. Right?
- [39:36]
B
Exactly, exactly. So I think guests are getting a lot more savvy, especially since there's these big commissions now from the OTAs. So that's been good. But I think one thing on the more technical side, we did this for you, David. I don't think you even knew about it, but when you created your site on crafted stays, we actually registered your site with Google search and base. And so what that means is if someone searches for your property management name and your property, you're going to show up. What a lot of people don't realize that is if you build a site on WIX or on Squarespace or anywhere you, Google doesn't know about your domain. Google is not scanning every single URL out there. That's not how it works. Google needs to know what the website, what the domain is, is it active and what's the site map, meaning what are the pages on the site that it should crawl? And so we submit this all to Google so that when you launch your site with us, would take care of all that stuff. You probably didn't even KN know about it or even realize that we did this behind the scenes.
- [40:44]
A
No, but what I know is that I get direct bookings that pop up. And so I don't know if it's because you did that. I don't know if it's because when they were looking at my Airbnb listings, they saw the property management company or they went to the website. I just know that my PMS hospitable, which is actually a Sponsor of today's show, they just said, hey, you got a direct booking. And so I'm gonna let you continue covering this because I think this is really good for people to realize it's not only about paying for Google Ads or something, that there are guests that are out there that know if they contact you directly and they ask for a discount, you'll say, yes.
- [41:20]
B
Yeah, yeah. And you have to be very smart about that. Don't. Don't make a mistake of sending them directly to your website. You gotta.
- [41:27]
A
In the chat option.
- [41:28]
B
In the chat? Yeah. In the chat. Yeah. If a guest asks, like, oh, I just booked this on their Airbnb, or I'm thinking about. Just stay. Can I book with you direct? Be sure. Like, Airbnb knows they. They have keywords that they're looking for. They look at every single message.
- [41:41]
A
They have AI that crawls their site that tells you, hey, don't take this off platform. You'll get punished.
- [41:45]
B
Yes. And they'll find you fast. They'll find you super fast.
- [41:48]
A
100% they do. In fact, I've often wondered, and maybe I need someone that works at Airbnb to confirm it, but if I worked at Airbnb, I'd have an algorithm set up to be like, what percentage of people that DM you end up not booking and looking for ways that they think that you're pushing them off platform? And I'd punish them in the algorithm, I'd put them a lot lower. Have you heard about that happening?
- [42:11]
B
No. Because they don't really know whether or not they booked with you directly. They just know that you didn't book. And there might be a lot of reasons why they didn't book, but I think maybe if they didn't book another Airbnb. So if you're a guest and you looked at different properties and you messaged a host.
- [42:30]
A
Yeah.
- [42:30]
B
And then you didn't book at Airbnb at all. That's probably a signal for them. But they're ranking so many different things on the algorithm already, and their engineers don't even know how to, like, make yourself land on page one. Because they're constantly making changes. I think I bet you at this point, AI is making changes, micro changes for them. Yeah.
- [42:51]
A
So a couple of things that you can't do. If you're listening and you're interested in this, you can't tell somebody in their DMs, hey, call me at this number. Email me here. Look me up at coast to coastgetaways.com. you can't say things like the word direct call, their AI will catch it and they will stop it. You can't put in the descriptions, as far as I've seen. Go book direct at coast to coastgetaways.com. the minute that they see that there's a website in there, they'll stop it. Some. Sometimes you can't even put a phone number in the chat. But what some people do, like you said, is they make the company name, the title you could put in the listing description, you know, hosted by coast to Coast Getaways. I don't think you could put the dot com on there. I don't think you could put an AT sign. They'll catch that if you're trying it. But if the person's savvy and then they go look up the cabin name or the property name, we've got some that way too. So we'll get a direct booking. And I always make Angela ask, like, how did you find us? And they'll say, oh, I saw Big Sky Lodge and I googled Big Sky Lodge or Big Sky Lodge, Coast Coast Getaways, and it popped up. And then the direct price on my website is significantly cheaper than what they saw on Airbnb because it doesn't have all the fees. So they're happy because they saved money. I'm happy because I got a direct booking and I actually am going to make more money if they book direct. And I can spoil you without worrying about being taken advantage of stuff. I would much rather spend the money on sending you firewood and a s' mores kit and a gift card. And we have, like, branded teddy bears that we like to give people, like, all kinds of fun stuff if you make the effort and you're staying at my property. And like, I had a couple that stayed at one of my. Not a couple, a family that stayed at my really big cabin. It's like 8,000 square feet. And they took this cool picture of their whole extended family sitting on this really big staircase from the bottom to the top. They filled it up well. I got their address and I sent them a canvas picture that I had made of that and I sent it to them. And their kid lost a teddy bear that we couldn't find, so we sent them a teddy bear in exchange. Right. I'm hoping that they book direct again next year with this gift, but I would way rather spend a hundred dollars rewarding the guests that did a great job, took care of my property, had a good attitude, and booked direct versus throwing $500 at somebody hoping that they don't leave me a bad review.
- [45:16]
B
I think that that's what hospitality should be like. If you look at the big hotels, they look at longevity. I think that that's one of the big differences between getting a booking on the OTAs versus on direct. Airbnb is very transactional. You're. You're basically fighting for the next booking there. But the difference between that and really building your marketing engine, your own direct booking engine, is that those things compound as you go through time. You're building out your email list, you're getting better at your branding, your follower counts increase, your messaging is better, your targeting is better. Like, those things compound over time. So we see, like, a lot of times, folks will. They'll struggle the first year of direct bookings because they're putting all these things in place, place. But year two, year three, they're hitting double digits. They're hitting 30, 40, 60% direct bookings, and they're. They're the ones that are reaping the benefit out of it. It is the long game, though.
- [46:13]
A
Yeah, it is definitely the long game, 100%. I couldn't agree more. And I've told Angela because she's unfortunately the one that has to absorb all of the buttheads that are out there. Right. It doesn't make its way to me as often as she has to deal with it. And I've said the plan is to use the online travel agencies as the front of a funnel. You come in, if you're terrible, you're not going to come back to us. We're not going to market to you. Get out of my life. If you're great, we spoil you. We send pizzas to these peoples. There was a YouTuber that I really like to follow, Elijah Zilke. He makes content that I really like, and he stayed at one of my properties, and we dropped off a cake because it was somebody's birthday. So we had, like, a cake made with their name on it, and Angela went there and she dropped it off. Right. He's going to be coming back to stay at my place. You do this for four, five, six years in a row, and the percentage of direct bookings will keep going up, which means the percentage of OTAs will be going down. And not everyone on an OTA is terrible. So if you can get to where only 40 to 50% of them are coming from an OTA and 30 of those people are rough, now you only have to deal with 10 to 15% of your guests. That are tricky. When it used to be half of them. And I think what you just described, that long game, that's what the people who are in this need to be thinking about. About.
- [47:25]
B
Yeah, if you think about it, even a small portfolio, we have just a handful of properties, we pay five figures in commissions every year. Five figures is a lot of money. That's a lot of gift baskets that I can send out. It's a lot of marketing dollars I can spend on other, other ways I can run ads. I can even do like really like nurturing emails like everybody should, Everybody in the direct game should be nurturing emails. Like that's, that's, that's a given. That's something that you should have from the very beginning there. But that's a lot of commission dollars that you can spend on hiring a va, running, running that independently and growing that over time. Because again, you're going to be paying that five figure commissions every single year. Whereas if you build it on your own direct booking engine, that stuff starts to compound the SEO impact that you have now kind of just runs on their own. The email list that you've been sending out that has a thousand or plus email subscribers, that continues to run on its own. So you're able to reap that benefit year two, year three or four.
- [48:27]
A
That's it.
- [48:28]
B
That's, that's, that's really the long game.
- [48:30]
A
Yeah, I, I want to, I have a vision where I want to give like ATV rides to people that are booking an expensive cabin that have a lot of people and there's a company out there that provides it. I have the money to do that. If they're booking direct and they're, they're thrilled. They're like, these guys are awesome. I want to go back there. We want to go the same place and make memories every single year. If you just think about what you said, you're paying five figures for a bad guest. It's a terrible model. It's like paying a lot of money for fast food. That's killing you. Right. It's too expensive and it's bad for you. Your business is going to die if you do it. And because the OTAs are unfortunately not providing like a healthy experience, it is pushing people into direct booking. That's why I'm so glad that we were able to have you on and I'm glad to hear that you're doing what you're doing because the, a healthy business attracts good clients, it builds trust with the customers and then it puts all of its effort into making the experience better. You want to be putting money into improving your properties, adding amenities, fixing them up, redesigning better furniture, better stays, better views. Like, I'd like to put a telescope on all of my properties that have really nice views and just like bolt it onto the deck so that you can look, look at the stars at night. You can see that stuff. I don't know how I get there if I'm just throwing money at the guests that want $1,400 and they broke the toilet, but they don't want to pay for it, so they're trying to jump on me first.
- [49:50]
B
Yeah. And I think that that goes to another point. Like, the folks that I've seen do the best in direct bookings are the hosts that are five star hosts. They are the ones that really care about the experience. I don't have a lot of customers, actually. I don't. I can't remember a single one where they're just, they're. They have shitty properties, they don't have good service, they have low rankings on Airbnb. Those are not the ones that do well on, on, on direct. Um, they may pay for ads and get some, but it's not, there's no longevity in that. It's the hosts that care about the experience that want to up level every single year that continues to invest into their business. Those are the ones that get double digits. Direct bookings.
- [50:30]
A
Now, you've always managed your own properties, right? Yeah. So people like me, we're managing properties for other people. So if I'm managing your cabin or your house somewhere, I'm going to treat those people the same as I'm describing when they come to my cabin. Because it's kind of the same thing. Like, I want them direct booking again, coming to your property if I'm managing it, because that's where the money comes from. If I don't have direct bookings, I got to throw money at these idiots through Airbnb and I don't want that. I want the direct booking experience. But not everybody's doing this. You got some people that are doing their own thing and they're kind of unplugged from this type of information. You've got some people that gave their properties to a bad property manager. That's very common right now. I'm taking five properties over this week from someone who came to me. He's been paying 15% thinking he won. And they had cell phone pictures up of his stuff. Horrible. Gil, you would throw up if you saw what these pictures look like of these beautiful properties. And he didn't know. He's not looking at it. He's busy running his business and he's just trusting. These people are managing them and they're not. You've seen some stories, you've talked to people. Can you just talk a little bit about what people need to be aware of if they want to be successful in today's STR model because it's so competitive.
- [51:41]
B
Yeah. So a lot has changed. Like, I got in during the golden years of you could put up anything and you can do really well. And over time, we found that the properties that are doing really well, the ones that are on page one, page two, are the ones that have beautiful pictures. They have great amenities. They have great wording. They have like. Their descriptions are very well crafted. They just. The caliber of property managers and hosts that are on those first few pages are very well crafted. And I think that a lot of folks that had set and. Forget it. Maybe some of the old property managers that had really old photos. I've seen like one of my neighbors in one of our smoky properties. We have a pool cabin out there. There's two cabins on the block that are basically identical to each other. Our cabin, and one that's run by an old property manager. That old. That other property. Same footprint, same design in the listing descriptions in the listing pictures. It's not done by a cell phone. It's done by. It's like some really old camera. It's better than maybe an iPhone, but not that much better. They still have an old CRT TV. Remember those old tube TVs.
- [52:50]
A
Oh, they're heavy as hell.
- [52:51]
B
Yeah, it's still hanging there on the top there.
- [52:54]
A
Does it have the VHS cassettes underneath it?
- [52:57]
B
I think it does because I don't. You can't really get much signal on the Smokies, but they have like bears still all around. Very old flannel sheets. Like, it just looks really, really dated, as if you were still trying to book a place.
- [53:12]
A
Doilies on the couch, arms and.
- [53:14]
B
Yes, exactly Right. And our property before we took over management on it, before we purchased the property, it was probably doing 60 something in. In the Smokies. It's a one bedroom. It's a one bedroom pool cabin. So there's a pool, like a. A legit, beautiful pool.
- [53:33]
A
By the way, if you guys haven't seen this, it looks like a. Like a professional spa when you see.
- [53:37]
B
Yeah, yeah. It's not like huge where you can do like a. Lots of laps, but it's enough for the kids. But it was probably doing 50, 60. We took over after a full year. We raked in 140 on that property. So that's a huge difference. A lot of pictures. We spent a lot on, on design, but we made all the, all the money that we invested back in the first year and the second year is, continues to do fairly well. So that's like a contrast of like what we face before the property was under our management, but also what it compares to by our neighbor as well too. And now that property, now that neighbor's property is listed on, on the MLS as well too.
- [54:20]
A
Yeah, of course. And that's an example of someone who bought a property, it did well. They stopped paying attention, the market shifted and they didn't keep up.
- [54:28]
B
Yeah. And they're using one of the, in the Smokies. There's several big property managers out in the Smokies there that they have several hundred cabins under their management and they just, they just go through it. They just, it's by numbers. It lacks a lot of quality. I think that that's where kind of to your point, that's where a lot of new property managers that know what folks are looking for, they know how to deliver great experiences. They care about the property, they care about the owners. The ones that really like, really want to deliver a good product. Those are the ones that are taking over and, and really like reviving some of these markets. And it also makes it more competitive too.
- [55:06]
A
Do you think there's property managers out there that are not looking at the properties they manage the way that you're looking at yours? They're not invested in it. What's your experience been like? Just hearing some of the stories of when you hire a property manager and you have the conversation, you work out the commission because that's everybody's biggest concern. They're always wanting to, you know, pay less. And I don't think they talk about what you're going to do to manage more revenue, but can you just share some of the stories of people that might have a short term rental, they've turned it over to someone else and they're not really paying attention what might be going on.
- [55:36]
B
I mean, you see this a lot with the big, big PMs. Like Evolve is probably like the, one of the very most well known ones that if you want someone to manage a property, be listed on the OTAs and do a decent job, that that might be okay. But if you. We've seen a lot of hosts that are considering moving off Evolve and they're looking at the Numbers and they're looking at their neighborhood competition and just the revenue difference there can be too.
- [56:03]
A
Yeah. Can you describe how Evolve works, if you don't mind?
- [56:06]
B
Yeah. So Evolve is a property management company where like you can basically give them your entire listing. They're basically taking over for you and you pay them some commission. They're actually pretty cheap. I think they're on like the 15% side of things.
- [56:17]
A
That's I think what I've heard too.
- [56:18]
B
Yeah. So they'll take over and they'll, they'll list the property out for you just like a property management will. But they typically don't upgrade it and they don't push for upgrades. They'll basically you can consider like if you had a timeshare, you want someone else to like rent it out for you, they'll do that for you. But it's very like bottom level quality stuff there, which is different than how you would want to like the vision that you have of like the amenities that you want to build in over time, how you want to build your portfolio, which property manager you want to bring in. You're selective. Evolve will take your property. You can self sign up and do everything pretty much online. Like you really, there's very little vetting there.
- [56:58]
A
Here's the problem with the 15 evolve model. The assumption that people have when they do it with Evolve, I'm speculating, is it's going to get booked. They're the cheapest. I'll just pay 15%, no big deal. The reality is it's going to sit there and it's never going to be booked because Evolve is going to hire virtual assistants to do the communication or they're going to make you do it. Evolve is not going to make sure that they get the best pictures taken. You're going to have to do it when something breaks, they're going to throw duck. They're going to make it as cheap as humanly possible for them to keep that car running. And over time it's going to get broken down and then eventually you drop out of the algorithm altogether. Nobody's booking your property. And if you're not paying attention, you have months go by where the only time you book is in the store, super busy season and for not that much money.
- [57:46]
B
Yeah, yeah. That's the same kind of model that we've seen especially in the Smokies with some of the really legacy property managers. And like the one my, my, my neighbor is at, it's no different than, than Evolve there. And I think like vicasa is a little bit like a step up when Vacasa was still around, where the properties that they choose are a lot more selective on it, but they. The quality is not the same. As a local expert there, and I find that good property managers, they have the sweet spot of how they want to grow their portfolio and what capacity they want to have. They only want to manage maybe 20, 50 properties, and that's their limit because they know that if they went above that, the quality starts to diminish.
- [58:28]
A
And maybe such a good point.
- [58:30]
B
And they may graduate over time as their skills increase, as their team increases. But the good property managers, they know what they want to do, who they want to work with, what portfolio size they want there, and they're really selective on it. And in the very early days, as a property manager, you're going to be. You're going to take whatever you get, but over time, you're going to start to start to get rid of properties that just doesn't serve your portfolio.
- [58:53]
A
You have to. And as a business owner, I can tell everybody unequivocally, you can't grow healthily past the point of, of staff. And it is as hard as it is to, like, make a business work, it's even harder to hire people right now. It's crazy hard. The one brokerage, we could be twice as big as we are, it is so hard to find a good loan officer with a really good work ethic that we can train that has integrity. Like, we're as good as we are because we've invested so much in good people. But I could generate more leads. I can't generate more people. That's my slowest thing is I'm always like, who do you know that's a good human? We can teach them how to do this if they've got a good work ethic. But it's harder and harder to find them. Property management companies are going to hire somebody who is going to get burned out. It is so hard. I mean, Gil, you've got a handful and you just attest to just the mental burden it is getting pooped on all day long. Yeah, right. Like, it's terrible. So you, you have to hire employees to do this. You want to manage 100 properties, you're going to need like three minimum rock stars, probably four or five to be able to possibly do that. And they're super hard to find. So like you said, you limit yourself to 30 because that's what you and your assistant that you can trust can end up doing. And then you get the crap service, the, the properties I'm taking over, they're from a legacy cabin owner in the Smokies. They have got about 80 to 100 properties they manage. We looked at their Airbnb reviews. They have zero reviews on the four cabins I took over. It has never booked on Airbnb. So what they're doing is they're, they have a direct booking website, they're paying for Google clicks, they're booking people direct. And you're missing out on all the OTA traffic that you could possibly get because it is so much effort to look at. Like, to keep someone happy that books through Airbnb, they figured out we'll just throw marketing money and get direct bookings and then we'll give a shitty experience to the guests. But that's okay because we got our money and the owner doesn't need to hear about it. And every time something's breaking, they're just taking it out of the money they give you. And if you're not looking at your statement, you're not realizing. I mean, when I had that same company, they were trying to charge me $2,500 for a new pool table that the guest broke. And I was like, how on earth are you coming to me to. If we wouldn't have said no, they would have never gone to the guest to get the money. And my, my guess is a lot of people have properties with these companies that they were happy with the commission split that they got, and it's performing really badly. And either they need to take it back and do it themselves, or they need to find a better property manager.
- [61:30]
B
Yeah, and kind of going back to our. Our last topic of what's changed in the industry, specifically in strs, is the maturity level. And you need to make sure that your listing has been updated. We put in a full own, like a full mini golf course at one of our properties in 2023, because even then it was starting to get a lot more competitive. And I'm so glad that we reinvested those dollars into it because it's paid itself back year after year.
- [62:00]
A
Oh, yeah, you have to do that. I mean, if you aren't doing it, everyone else is. And that's the dangerous thing with the short term rentals. If you're not paying attention to your listing, someone else is. They're getting better reviews than you are, they're going higher and you're dropping off. Even if you think, I didn't do anything to make it worse, you're just falling behind the competition. If they're adding mini golf. I've been doing a ton of decorating. I'm out there all the time for the cabins. We manage and we're painting and we're getting new furniture and we're building out arcades and we're doing mini golf and I'm putting cafe lights everywhere. I'm like, it's never ending what you got to do to improve the property. Because somebody else is doing the same thing and you're in a competition and if you don't understand that and your property manager doesn't understand that, you're falling behind.
- [62:46]
B
Yeah. And I think that's one of the challenges. Like if your property is not performing well, you may not have the cash flows to put in those. Um, so it's kind of like a chicken or the egg type of thing where like, you need to bite the bullet and you have to invest into it and know that it'll pay off. And you gotta put it, either do it well yourself or pay an expert to do it for you. But you just can't set and forget it and, and hope that it's gonna go back up. It's, it's, it's not gonna be like that. You need to build your reserves. Like, if you're gonna be reinvesting into that property, you need to make sure that you have some allotment. And a good property manager will say, every year we want to budget this much to do upgrades or to do replacements of furniture, because those things, those bigger items, they do still wear out. Like our couches, even though we have nice couches. They do. They go through a lot more wear and tear than long term rental or even your own home.
- [63:37]
A
Absolutely. And the same applies for your direct booking website. Your company's looking at what's changing, how do we improve, how do we stay ahead of the game?
- [63:45]
B
Yeah, I didn't talk about this, but we just filed our patent for native AI search. And so, David, later this year I want to make sure that we get this on your website. But basically what it allows us to do is if someone's on your portfolio, say they're on your website and they're searching for stay. Right now you search for stay and you put in what dates are you visiting, what area and how many people are coming. We have made it where someone can basically describe what they're looking for. They can say, we're looking for a cabin for our two young kids and their grandparents to join us. We need something that's ada accessible. We want to be close to the mountains. And so they're giving you a very descriptive intent on what their vacation is all about. And then we take all of the data that we have on your listing descriptions, all the amenities that where it's nearby, and then we'll start to prioritize that based on their needs. And so we're not just showing all the properties out there, but we're showing them in the order that we think that is best serving them. And then we're also changing the listing description. So if you are looking for a property that's ADA accessible, we want to make sure that within that 500 character description that it mentions that very early on there. So we're changing the way that we position each property so that you can see the highlights of each one. Because you may care about different things. Like we may amenitize our properties with a bunch of different things, but depending on why you're visiting it, you may care about different things for different reasons. So we started building this out, we started testing with some of our smaller property managers. And building on AI is not as easy as it seems. And we learned that it works really well when you have a portfolio of five properties. We use Gemini kind of behind the scenes, but when we started working with some of our larger property managers, I have hundreds of doors. It's just too much context for that LLM to keep up with. So we now have multiple micro agents that will take care of understanding what the intent is, the availability, the prioritization of our properties, what to surface over to the property onto those pages. So we basically re engineered it over the last few months and we're launching it in the first quarter this year is our goal.
- [66:17]
A
That's fascinating. Yeah, I know. You and I were just talking before we started recording about some improvements to make on my site, like a way to display the properties a little bit differently. Is this a thing that you're mostly coming up with these ideas on your own or is this because you have a company with people that are constantly coming to you and saying I need something to do this, I need something to do this. That kind of gives you the direction?
- [66:37]
B
Yeah, I think the nice thing is that we work across different size property managers. So we, we have lots of property managers that, or even hosts that have anywhere from like three to 10 properties. And that's kind of where we started, like the very early days of cactus days, like we were best for that. But we've built such a robust platform that's so deeply integrated in the PMSS that we, that we work with and it just works so well that over time that word of mouth has kind of driven us up market. So we now have lots of property managers that have hundreds of properties on our platform. And the difference between that is that they have full blown marketing teams kind of driving it. So they're not just looking at a website that I can make pretty, but they're looking to do retargeting ads, they're looking to write blogs, SEO optimizations. So they're asking for so many of these different things. And the nice thing is that since we're building it on the same underlying platform, when we enable a feature, it gets enabled for everybody. So that's kind of why like you as a property manager that may have a couple dozen doors, you have the same set of tools as a property manager that has hundreds of doors. So that's kind of like what's driven us. But then also, this is my seventh startup, I've been at six other startups, this is the first time I've founded this one. But I'm in the heart of Silicon Valley. Like it's hard for me to avoid what's changing and how to think about things. So I spent a lot of time doing a lot of proof of concepts and just playing around with different things and seeing like where the industry is headed. I also come from E commerce and because of that I have a very different perspective on what's available, what's possible, how things are being done. E Commerce is like 15 years ahead of us. Shopify existed 15 years ago, before craft estates, it was even alive. And the amount of tools that you have, the email marketing tools that you have there, the tactics, the retargeting, cart abandonment stuff, those are all things e commerce platform had or e commerce industry had. But our industry still doesn't have that. If someone went to your website, maybe you had some pop up that says enter for free. Chance to stay or download our free guide to the best things to do in this great Smoky Mountains. You've collected that email, right? You now know also which pages that person looked at. If they didn't book with you, you should be able to target that person and send them back to your website. These are tools that exist in E commerce. Like if you went on, on, on any website that's a Shopify store, you put something in your cart, you left, you probably got an email eight hours later that says you left something in your cart. But in our industry we have nothing like that. So I just see like there's just a lot of these different use cases that E Commerce has figured out really, really well. And what my goal is to really bring some of those knowledge but also build tools for larger property managers and bring that to the entire industry. There's so there's a bit of that mix that kind of leads to the a lot of innovation that we have.
- [69:39]
A
That's fascinating. If people want to reach out to you, they want to hear more about crafted stays. They want to talk about if they should get their own site. Where's the best place for them to go.
- [69:47]
B
They can find us at CraftedStays co. You can find us on Instagram as well too. We're pretty high touch. I still, at least to this day, I still onboard every single one of our clients. I still, I'm very, very like, maybe this is part of like me being a host. I still like to talk to all of our customers, understand why they came to us, what they tried like to help them onboard. And that helps me improve the product. So if I hadn't had every one of those calls, our product wouldn't be where it is today. So definitely, if you have a chance, check us out and maybe we can get a chance to sit down and help you build out your website.
- [70:26]
A
Awesome. And if you guys want to get a hold of me, all you got to do is go to davidgreen24.com and use a chat feature. You can get a hold of me directly. We have people that have been reaching out from these shows, asking if we can manage their properties, getting in touch with the loan officer, finding a real estate agent across the country for wherever they want to buy, or even saying, hey, I'm stuck. I don't know what to do to move my business to the next level. Just like Gil, I'm here for all you guys. If you're listening to the show, if you're loyal to me and the David Green show, I'm here to help. Gil's been fantastic with all the problems that we've had and the things that we've needed worked on. He's been great. So I'm a big fan and I highly encourage you guys if you've got a short term rental or if you're thinking about getting one to talk to him. It's a very cost efficient thing and it will pay for itself many times over if you bring it into your business. Gil, thanks for coming on today. I'd like to have you back again and maybe we can talk about some of the tweaks that we made with my website and you can talk about what you did, and I'll talk about how it helped. Is there anything that you want to say before you go that you think we didn't cover?
- [71:24]
B
No, I just encourage folks to think about the long game and really make sure that they're investing in, really think about how to make this a real business. I think a lot of hosts just fall under the kind of the trap that Airbnb has kind of left out for us. But the property managers that really care about hospitality, they're starting to build their own brands. They're starting to think about how do I make this a very sustainable business? And I think, like, two, three years from now, those are the ones that are going to win more business. They're going to get more properties, they're going to have a much more sustainable business that they control on their own. And I just. I'm super happy to be part of that story.
- [72:01]
A
That's awesome. The last thing that I've been asking people that I don't tell them is coming, so it's always a surprise. What's something that you've always wanted to ask me but never got a chance to?
- [72:13]
B
Oh, I don't know if it's a question, but I've always been. I've always been inspired on how you are able to take the context from what we're talking about and really rephrase it. I've listened to hundreds of episodes of the Bigger Pockets podcast, and I don't know what skill you learned along the way throughout the years, whether or not it's in podcasting before or before podcasting, but there's something that you do and something that you think about on how to phrase what you're going to say next and really make sure that the users stay engaged. And I'm a podcast host myself, so, like, those are skills that, like, I want to continue to hone. So, like, if you have any tips on how to really engage with your, your podcast listeners and your, your guests, like, I'm. I'm open to those.
- [73:06]
A
A compliment. I will take it even better than a question. Thank you for that. I never thought about it, but as you were saying it, I'm pretty sure that I just now realized I developed that skill because I started with Brandon Turner and he never let me talk. Sometimes it'd be like, three quarters of the way through the show, and he'd be like, david, you're here. And he'd try to, like, throw me a bone. Right? So I realized, like, I don't need to ask questions of the guests because Brandon's asking all the questions. And then later on, when I started asking questions, Bigger Pockets stepped in and they said, hey, these are the questions that you have to ask. And we kind of were like, well, am I doing the interview or am I just doing a scripted show here? And so the only way that I could bring value was when I heard someone say something that I thought was really insightful or smart. And I realized if. If the person listening doesn't use that verbiage, or if this is an industry they're not familiar with, it went over their head and they were going to miss how that could benefit them. So I'm always almost like a. Like a translator or, you know, like, you're bringing great crude oil, but I got to turn that into something that can work in a car. That was how I learned to bring value to the Bigger Pockets audience. And then that prompted me to say, I need to come up with analogies that a person could use.
- [74:21]
B
Your analogies are spot on. You have. I don't. I don't have that arsenal. I don't have the. I don't. I don't want to say I don't have that skill set. I haven't tuned that skill set of figuring out analogies. I'm just not that great at it. But, like, you do an amazing job at figuring out what analogy fits that best. So kudos to you on that.
- [74:38]
A
I really appreciate that. One of the things I've learned doing this, having several different businesses in several different industries is you can't be good at everything. It is so important that you find the person like you that is having these conversations with property owners and seeing what their problems are and actually implementing a solution that will work in an area that I don't understand. I will never want to know how a large language model works. I don't want to even step into that pool, Right? And so I need the guys like you to figure that out and then come to me and say, david, this is what we need to do on your website. This is what we need to do in your business. This is what hosts are. This is what property owners need from a property management company. I need you to go do this. And then I like when I get that, and I could go work on that problem. Just like people bring problems to you. And so one of the things that I think is really important if you're trying to create a successful portfolio business is not just knowledge. It's the right humans. It's the right mix of people that have each other's back. It's knowing who you can trust and who's going to rip you off, who's working with you, and who's working against you.
- [75:36]
B
I 100% agree with that. Like, we've started craft of studies, like, a little over two years ago, and in the early days, you're doing it all. You're pretty much the sole person outside of, like, maybe our engineering team there. But I had to do it all. And over time, you just don't have that capacity there. And you're probably not the best person. Like, I thought I was really good at customer service, and then I hired our customer success manager, and he answers questions way better than I do. He's much more intentful about it. I'm like, let's get the answer right to the customer right away. And that's just my attitude on it. And he spends a little bit more time, but he's just much more graceful at it. And like, if he. It feels warm on the other side of things. So, like, I completely agree with you that, like, come to your earlier point, like, hiring the right team is really, really difficult. But if you find those right folks, that's really good. But also, like, that's one of the things that I need to learn better as, as we're running and growing this business is how do I lean on the network? How do I find the right people that aren't just employees, but also partners and people that I can rely on?
- [76:38]
A
And then how do we be the right person? Right? Like, half of it is how do you find the person? And half of it is becoming the person that you need to be to have success in that industry. Like you just said, it's very important to you that your customers get an answer right away. You didn't say this, but I'm pretty sure that's because you were formed and molded by the hospitality industry, where the guest wants an answer right away. And so your brain has been wired to understand when they get frustrated, when they don't get an answer. And so you molded yourself to provide what other people needed. You made yourself a servant of those people. When you found an employee that does the same thing, it's really good for the customers. Every one of us knows what we want. We want the quick response. We want the warm answer. We want someone that cares. Let's all go forward through our day. After we listen to this, think about how do we be that person for somebody else? How do we provide what other people want and not just think about how we can get what we want out of life. Gil, great show. Definitely want to have you back. Really appreciate you sharing everything you did. Guys, go check out crafted stays. They've been amazing. And go check out coast to coast getaways. And then let me know through the chat option at David Green 24. What, you think I should change about the site? Maybe. I'll see if Gil's team can put it into place.
- [77:44]
B
Yeah, let's work on it.
- [77:45]
A
All right, man. We will have you back again. Thank you. We'll see you guys next week on the David Green Show.
- [77:50]
B
All right,
- [78:01]
A
Sam.