Airbnb is going nowhere and neither is the short term home lettings market, so is it time to consider how best to start "disrupting" this new / old paradigm?
One firm that likes to be ahead of the game has already begun the process, creating a subscription service that allows homeowners to use a bespoke tablet to post videos, recommend services and keep track of their guest's movements all through an app. They say they are in it for the long haul and can roll their product out not only on a B2C but a B2B basis via hotels and managed apartment lettings agencies – meet YourWelcome.
Paul Loram and Henry Bennett have run businesses before but none quite like YourWelcome, which is their first move into Property Tech, or Prop-Tech as it's become known as the industry has gathered pace, particularly when it comes to the disruption of mobile and online services, and the customer experience.
The two co-founders joined the Pi-Labs accelerator at Second Home, the creative entrepreneurial and startup hub near Liverpool Street station, which gave them a chance to work with Faisal Butt, the property accelerator's founder. Bennett says he thinks they must have "got through a year's worth of work in just over 3 months."
YourWelcome's plan is to provide their customers, people or businesses offering short term accommodation either through Airbnb or a similar concierge-style service, with a free tablet in exchange for signing up to YourWelcome; the tablet comes with just the YourWelcome app built in which offers a range of features and services.
You start by recording a welcome message for your guests, posting instructional videos and providing links to local services and events such as restaurants, theatre tickets and taxis – YourWelcome has a number of cut price deals in place with service providers such as London taxi firm Addison Lee and hope to provide customers with an additional revenue stream this way.
The team recently raised £400k at a valuation of £2m – Bennet says that they could have taken as much as £3.2m in the first round but decided to give less of the business away by taking less investment although there is a possibility they will complete a second fundraising round later this year.
The USP and differentiator is the device – YourWelcome have their own devices built – around 1,000 are being shipped across the Atlantic as we speak – at a substantially lower cost because they only require a simple operating system to run their app.
"Asking a guest to use their own devices to download a bulky app or trying to hold a conversation with them across 3 different platforms; texting, WhatsApp, or the Airbnb interface for example, just to tell them the Wi-Fi code or recommend a restaurant makes for a terrible service for both host and guest", says Bennett
"Our vision is that the guests arrive and on the table there's a bottle of wine or some kind of welcome gift, and also the tablet – once the guests have logged into the tablet they can signal their arrival to the host who is probably worrying and wanting to check if they have arrived safely – this way they can know straightaway that everything is ok. Every aspect of the trip can then be handled from within the tablet and the YourWelcome app. It's a fantastic, homely and welcoming 2-way service."
Hosts are encouraged to post information about the area – local services and things to do as well as house rules, adding a personal touch to the stay and also giving them the chance to make recommendations about places to eat, see and visit and possibly earn some commission if guests choose to follow them. Feedback showing what guests searched for and which links they followed can also help hosts adjust their recommendations to match different guest's profiles.
Bennett has his own property on London's South Bank where he lives with his wife and 3 kids and says the YourWelcome app has helped him understand what his guests really wanted to do and see "it really wasn't what I expected", he says, "I found I was recommending all the wrong services before the data told me what kind of suggestions I ought to be making".
YourWelcome has just signed a deal with serviced apartments provider Skyline to trial their tablets in Skyline's properties. "People always assume YourWelcome is targeted at Airbnb users but the use cases are a lot wider than that", says Bennett; "the prop-tech sector is very hot right now and we have a significant first-mover advantage in this space – nobody else is doing what we're doing currently."
Creating a more personalized relationship between guests and hosts – whoever they might be – is at the core of the service. Subscribers pay £9.99 per month – not far off the price of a Netflix subscription. Meanwhile the team have remained at Second Home and are now numbering 7 in total.
Bennett has always been entrepreneurial and has run several digital agencies mainly around the acquisition of licenses for gameshows and television programs and later building branded mobile apps for the entertainment industry including the BBC, achieving more than 40m downloads worldwide. He, alongside long term business partner Paul Loram, has personally invested in YourWelcome.
"Obviously we think it's a pretty strong business model", says Bennett, "it's a huge industry – the fact that 20-40% of the Hotel Industry's revenues come from value added services gives you an idea of the market potential."
Expansion into Amsterdam, Paris, Barcelona and possibly New York is planned. The talent pool in London capable of helping the business scale as fast as the founders want it to is not unlimited and is expensive, Bennett says; "the aim is to provide the customer and end users with the richest experience possible, that's something we've been passionate about for years having built hundreds of apps at our previous businesses."
It's certainly easier to use a neutral device rather than clogging up one's own devices with data full of pictures showing where to leave the bins or where the best local supermarket is located. "It's the easiest way to communicate with a guest if you cannot be there face to face", says Bennett, all the services required, laundry, delivery, tickets can be purchased safely through the app and information shared that will help new guests enjoy the best the area has to offer by learning about other's experiences".
Then there's the Airbnb factor; it's estimated that Airbnb arranged more than 80 million home shares or lettings in 2015 and that the average guest spend per visitor to London is £1,231 excluding the room fee. This leaves a sizeable market for value added services for YourWelcome and hosts to tap straight into, saving their guests money by using vouchers and money off deals.
For an additional fee guests are given access to YourWelcome's data from all of their hosts combined, revealing trends which can help guests know which services to offer.
So far there are more than 1,000 households using the service across London and the device has been occasionally mentioned in Airbnb guest reviews – will YourWelcome be looking to partner with Airbnb long term?
Over the Christmas period YourWelcome say that more than 1,000 guests were using the app whilst staying in London and that their data also reveals guests spent on average around 1hr 20 mins interacting with the device; an age from a marketer's perspective, with more than 7 links to external services clicked. The level of trust is clearly high.
As the sector matures and hosts start to demand better services and benefits it seems YourWelcome is well poised to exploit that demand and make home sharing a more polished, professional and personal service – and it all starts with a video greeting.