Jasper Ribbers:
Welcome back to Get Paid for Your Pad. Today I have a special guest on the show, Mr. Lucas Kraus. He's the CEO of Sky Renification Rentals with over almost 1,200 units under management. And Lucas has a pretty extensive history and experience in property management in general. So excited to pick his brain on what's going on in the industry and also on… How do we scale a company to that kind of level? That's a super interesting topic. So Lucas, welcome to the show.
Lukas:
Thank you, excited to be here.
Jasper Ribbers:
Awesome. You want to share a little bit of your background before we dive into it?
Lukas:
Yeah, I'll try not to put everyone to sleep. I got a collective set of experiences. It's funny, I spent a little time in financial services and realized that was not the space for me and did a little time in telecom. And then I got in this crazy world called franchising, working for the capital group that owned Quiznos and wore almost every hat under the sun for them. And it was a great experience in building and kind of scaling businesses. Then ended up in the property management space, as you just mentioned. And 2011, and with a company called Real Property Management, let a turnaround for a group there and really helped us scale from a few thousand homes to 65,000 homes under our belt. And to be the largest single family property manager in the country, I did that through a franchise system. And it was just a lot of fun helping small business owners really scale. And, you know, we had people who had thousands of properties when it was all said and done. So, you know, as we talk about the purpose here, that's kind of what I do in living in franchising and helping people build businesses. And so, you know, just recently got into the short-term space and it feels eerily similar to the long-term space, you know, 10 years ago, huge opportunity, big investments in technology and still very fragmented. So I've had a lot of excitement and just really helping our business start to ramp up in scale and learning more and see a bright future on the horizon for this space.
Jasper Ribbers:
That's great to hear. Yeah, I'm interested to learn a little bit more about your perspective, because I started in 2012. So I feel like, wow, the industry has matured so much, so much more professional, but I'd love to hear your perspective as somebody coming in from a related space, but slightly different space, just two years ago. What was your first observation of this industry, and where do you think we are at in the general
Lukas:
It still
Jasper Ribbers:
spectrum?
Lukas:
feels like it's an infancy. I mean, it doesn't mean it hasn't matured and evolved. And so when I was in long-term management, I kind of thought, oh, well, this has been around forever, it's mature. But then you look at like multifamily management and the sophistication and precision, and it was like, we, we aspired to get there. And I kind of see a similar thing in the short-term space where you can see this evolution of the business, but I will tell you it's far more tech forward than where the long-term was. And I think the reasons are around that. is because of the sophistication and pricing that you need to compete. And so what I like about this, not only what I see in the space is there's so much investment in technology making these things more accessible because now there are a lot of pricing solutions. They used to be maybe only a few select people could afford it. Now, given there's more competition that's bringing the pricing down, I think that's a great thing. You're also seeing a lot of elements of… specialty cleaning solutions or specialty operational elements to add on to the property management systems. And ultimately, I see those getting rolled into, you know, the longer term PMSs, but you can see that there's still efficiencies on the PMSs that aren't being completely solved. So
Jasper Ribbers:
Mm, yeah.
Lukas:
I think they're still ripe for a lot of evolution, but we're just seeing, you know, this is a very vibrant, successful industry that is getting more competitive and more sophisticated.
Jasper Ribbers:
Right. Now one thing that's, you know, that's a huge trend right now, not just in our industry, but outside as well is artificial intelligence. Are you guys focused on that at all?
Lukas:
Focused, I wouldn't say yet. We're going through a major reset. We're rebuilding. We have our own custom property management software system, and we're launching here this summer. And that's big in our future in leveraging that. So I'd say, given our old platform and the age of it, we haven't really adopted as much as we can, and we are going to. In my former world, we did use it for reading invoices and things like that in the long-term space. But really excited about we have so much data with you know. 15 years plus of history and all the inventory and hundreds of thousands of guests of leveraging AI for guest interactions and communication and really try to remove, I'd say, unnecessary human intervention. But we really value and our success is a little higher touch and customer focus. And so we're going to strike that right balance. That doesn't mean we can't use it for really efficiencies. I am really interested in how we can leverage that for pricing. I think there's some great tools there. So I know your question was directly, are you using it today? The answer is no, but we have a clear roadmap and a very intentional plan to really start to engage that.
Jasper Ribbers:
Yeah. Let's see, like what, what's your view currently of the industry? Like, you know, late 2022, there was this, there was this thing, I don't know if you, you know, read these articles about like the Airbnb bust and, you know, the hosts are going bankrupt and all that stuff. And, you know, we, we didn't really, you know, our perspective, we had a little bit of a different perspective of like, yeah. You know, nothing goes up in a straight line. I know
Lukas:
Yeah.
Jasper Ribbers:
you were in finance before I was in finance before. There's all these ups and downs, but you know, since you have close to 12 on the properties, you must have a pretty good view of like, you know, what's, what's happening in this year? Like, do you, do you see a slowdown or a burst
Lukas:
Yeah,
Jasper Ribbers:
at all?
Lukas:
it's a great question because I mean, I think our demise is well overblown, right? Because you hear this like, what's happened is this industry, first off, we were riding all time high, a perfect storm of elements, right? This revenge travel, you know, these subsidies where individuals had more discretionary income to spend as we were trying to stimulate the economy. And, you know, I look at it as a few things. This has helped been catalyst for our industry to grow and reach new peaks. Right. You know, internet was huge for Verbo and things to move to this, you know, these online platforms and bring this in, you know, space from like basically to classify ads to technology Airbnb opened up urban markets and the app world has created a new high and COVID helped a lot of people try our product. And so to your direct question, we're still up from where pre-COVID 2019, are we seeing a little deceleration in, you know, compared to the all time peak? Yes, but we've grown actually as a, that's when we compare same store sales equivalent like booking, but since we've grown our inventory, we're up as a system. So we've taken a bigger piece of, I'll say a little smaller pie, but the other thing I think people really discount is there's more inventory. This given that there was so much excitement and demand, Individuals saw this as a great way to have a second home and be able to use it a little bit and access it. And then you also had inventory convert from long-term to short-term. So there is, you know, you're competing. So I do see a slight softening when you kind of compare, but it's, it's very subtle and it's, and it's, you're competing for more inventory. And so, you know, a console is obviously stay on top of your pricing, but it's also making sure you're providing great service and doing all the right things to stand out because it is more competitive because there's more.
Jasper Ribbers:
So, you know, the competition is increasing. That's something that we're seeing is you can't really, back in the day, you could just throw something on the Airbnb and the bookings would just roll in. Those times are gone. What do we need to focus on right now, you know, to compete?
Lukas:
Well, it's knowing who you are first, your identity. I mean, if you are a high end, right? I mean, it's tailored to who your audience. We kind of play above average homes in our kind of our sweet spot. And so, you know, guest reviews, you know, great service are very important. And so we want to make sure, you know, on the platforms, the Virgo there, there can be and all the other OTA channels. We're providing great experiences because that's really factory and that's optimizing how we're positioned and generating the bookings. The other is, you know, looking at your listings. Do they need to be refreshed? You know, look at the, you know, the images, the things you need to do. I mean, it's the basic blocking and tackling. And then as you mentioned, the pricing, it's not set it and forget it. You have the bright dynamic pricing tool and those things are powerful. But what's more important is you're going to need to be, someone needs to be managing and using that data and direct it. And I feel like those are kind of those core things. You know, you do see some of these other very creative people who are creating unique experiences and standing out. And so whether it's tying in amenities or they have themed homes, it's knowing who your audience is really going all in. So I, as I tie back to my first point, know who you are, but you've got to do all the foundational elements.
Jasper Ribbers:
Yeah, you've got to really like cross all the t's and dot the i's in today's environment to do well. And, you know, the revenue management side is interesting because first everyone was just, I remember the days where in Airbnb people would just set one price. Like all right, my home should be worth about 150 bucks a night. Let's set that price for every single day of the year. Right. And you would see that quite a lot in the beginning. And then you saw people starting to… You know, make some adjustments like, you know, the weekends may be a bit more expensive Christmas, Thanksgiving. We'll check up the price a little bit. Then came the, you know, the beyond pricing, the wheelhouse, the price labs, and people started using those apps. And I feel like now, like most people are, you know, aware that they, they should be using one of those apps. Cause it's, you know, without, without data and without the algorithms, it's very hard to price competitively, but I think there's what we're seeing now is The next step is like, okay, now we have the tool, but now we also need somebody who understands how to use the tool. And I'm seeing companies hiring revenue managers and signing up for different services that are out there. So what do you see when it comes to revenue management and how much upside is there, do you think, like actively managing revenue?
Lukas:
Well, there's a ton. I mean, it's probably one of the most vital parts of the business, outside of the service side. And you've captured it well, I'd say this life cycle. And I imagine, we experienced it with local managers and operators and things were going so well during that COVID window that there's almost a complacency of leaving money on the table because you're anchoring to historical norms. And so not managing it as scientifically as you could. Well, guess what? Now, as things may be level off a little and there's more inventory and a little more competitive, it's even more important that you're identifying those trends. I will tell you, if you're slow to move, you will see it and feel it. You will see, you will be behind the market. And I'll tell you, our markets where we're seeing it, it's amazing where you can see groups dropping prices in the comp sets and staying on. And it's like, if you're not on top of it, you're going to stand out and you're not going to get the book. And so it's funny, you don't, people probably didn't feel it as much during the, I'd say the peak tailwinds of COVID because they didn't realize how much maybe they weren't benefiting because they were not, you know, optimally priced and, you know, driving their ADR higher, but they're gonna really feel it now when it just softens maybe a little because people are making different buying decisions. You know, preferences are changing, booking windows are shortening a little. And so you have to be on top of it. And so… Like you said about revenue management and dedicated resource. That's important. This is an easy stuff to distill the data, to look at the compsets. And, you know, you know, when you're smaller, that, that can be a challenge because you're wearing a lot of different hats. And so it's one of the biggest challenges when you're trying to scale your business, dedicating enough time and mind share to those things that are just mission critical, because it, you know, I don't say you have to be a PhD to understand all the pricing. But it's not the easiest thing. And, you know, I always like to say it's a nice blend of art and science that you're taking the data and then you're making informed decisions to it. Um,
Jasper Ribbers:
Mm-hmm.
Lukas:
there is no set it and forget it today. It's just way too dynamic. It's way too much competitive. We are almost at a level where the hotels are, the airlines are. And if you're not on top of this, it's going to show you're going to, you're going to struggle and your, you know, your homeowners are going to see less returns on their asset and that's going to impact their confidence in you.
Jasper Ribbers:
Yeah, yeah, 100%. So what about the future? I was reading a report that the short-term rental industry is predicted to be at, what is it, 300 million or something by the end of the decade, which will be a 50% increase from where we are now, I think. What do you think in terms of the industry in the next three to five years?
Lukas:
I think we're going to see some continued growth. This is something that you can tell the demand is there. You see a lot of the hotels starting to hedge, participate, because when it's done and delivered correctly, this is, in my opinion, a superior experience. When you have everyone under the same roof and you have families together, you can cook, you can do these things. So I'm bullish on the long term, and I think seeing the large hotels. you know, whether they're building purpose built on their own inventory or having leveraging online and being their own, having their own booking engines tied to inventory is a good indication that they see it's here to stay. Um, so at a macro, I'm very bullish about it. I do think the competitive set is going to continue to grow and evolve, but I don't see major consolidation. I just think this is a business that you can centralize the elements of it. but you still need local boots on the ground. And so I think the key is, is just raising the standard of industry as a whole, because our industry is facing reputational challenges when it comes in the form of regulations, where in a way we're being scapegoated for really a supply demand issue, which is not really a fair representation of what's going on. And so I do see us growing. I think we're going through a couple of years of helping. reshape what regulation should look like. Regulations should be there, and they should be a positive thing. I think they're just well-intended individuals that are kind of ill-conceived in most constructs. And so we're very active, and we're really trying to kind of go shoulder to shoulder and link our arms with our competitors, our tangent industries, because we do need to shape this in a positive way. There should be checks and balances, and they should have the proper taxing. But there's some markets that you've seen it, of our 40 plus markets, we're dealing with them a lot, but that are a little ill conceived. And we have to help educate and reshape it. And we wanna be part of the solution. So I do think that's the other part. And then I just think the technology is probably the last leg as I look at that future. It's only gonna get more accessible. You look at the amount of investment that's going into these different software platforms. And I think that's a positive thing for operators, more options, more, you know. And more competitors in different segments is going to drive the price down. And so if I'm sitting in a seat as a large operator, small operator, I think that my competitors might be the same competitors, but I think they're going to get more sophisticated each day. And so if I'm not working on getting better and being my best self, that I might get left kind of on the side of the road behind everyone, so adopting the revenue management. Being more sophisticated in your marketing and how you're trying to add new homes and new inventory, I think are critical parts of the future. So that's probably
Jasper Ribbers:
Yeah.
Lukas:
way more than you bargained for on the forecast, but I just wanted to give you a
Jasper Ribbers:
Well,
Lukas:
full context.
Jasper Ribbers:
sure. And you brought up an interesting point as well. Like we just saw HostAway raised $175 million, which kind of blew my mind for property management software to raise that much money, which is awesome to see. Shout out to Marcus. He's been on the podcast a couple of times.
Lukas:
The beauty of the SAS model, those multiples are very attractive. Us operators can do well because the valuations are nice here, but software valuations are very impressive in what people can get.
Jasper Ribbers:
Sure, sure. But yeah, you mentioned earlier that you think that the property management softwares are kind of going to integrate a lot more functionalities. Like right now, I would say, if I look at it in our mastermind and ask people how many different tools are you using to manage your 30, your 40, your 50 units, it's a solid list of tools, right? You have your pricing, you have your Pmasks, and you have your. You know, the smart logs, the cleaning, the guests, there's so many guest experience platforms out there now that you can add on to, you know, the tech landscape is so wide and people using so many different tools and now it's like, okay, well, how do we integrate all that? So it all works together. But we see the guesty, for example, now I noticed is, you know, is adding a lot of it's trying to really become the one-stop shop where, you know, they have all the different tools are integrated in the PMS. So is that something that you Think is going to continue. Is that where we're going? Or is it, is it at some point that the BMS is are going to realize, okay, we can't be the best at everything. So we're going to leave some parts out of it and let others handle it.
Lukas:
I think you're going to see the majority will start to take those in-house. They'll either buy or build, just necessary. Because I saw this in the long-term space and we went through that evolutionary process where it was just roll on it. The reason why is kind of to your original part of the question, the tech stack can get so convoluted and complex at the local level that it actually has diminishing returns. You want your average team members logging into six or seven platforms. And they're not, if they're not all talking to each other, how effective are they really using the tools, even though they're very valuable tools, then you might be better off actually simplifying the tech stack. And that's always when I'm looking at scale, it's how do you simplify things? How do you streamline? And even though they're valuable tools, sometimes you, you won't use, you won't implement something because if you, you know, you're only half-heartedly engaging in it, it just doesn't have that value. So I think they will be strategic. And these companies that are usually venture backed, right? Their funding, those are the right strategic buyers. They have a captive audience. It makes sense if you can run it under the same umbrella. So I think more times than not, you will see these large players kind of integrate. I know some of the larger players, they also played in the long-term space and they evolve their tools. And remember, that's an important piece because if you're sitting on their side, They have to provide such a wide range of coverage. They're helping people with a couple properties to thousands of properties and everything in between. And so they have to have a pretty wide ranging solution. So I, you know, you go to a verma conference. I it's funny because you see the PMS is, but just, I was blown away by the number of, I'll say niche solutions for different elements, very, very prevalent. And that prevalent, I think that's where we're at in this early stage. And you'll see some of that consolidation. Um, because it's just hard. I mean, doesn't mean they're not valuable, but to have multiple platforms, it's really hard to justify, you know, not only the costs, but to do these things just for one piece that I have a whole nother log and I have to have another, you know, separate, you know, train my team on all of these other different elements. So
Jasper Ribbers:
Yeah.
Lukas:
yeah, that's where again, long-winded way of saying how I believe the consolidation is going to be.
Jasper Ribbers:
Right. Well, you touched on something that I wanted to talk to you about as well, which is skill, right? You mentioned as we're scaling, like we have to simplify and keep our operations as simple as possible. So like if you look at like the whole spectrum, right? Going from like, you know, somebody who manages like five to 10 units, you know, then making the move to around like the, for 50. 50 ish level and then your business changes quite a bit and then making the move all the way up to where you guys are playing at like a thousand units. I imagine you know, you're dealing with different challenges and we have to structure the business differently. So can you kind of talk us through what changes as you scale up?
Lukas:
Yeah, it's amazing life cycle. And it, you're really similar as we saw at, you know, by locations and in the long-term space. And I've seen it in the, you know, sit on boards for other industries, similar. I'd say the lifestyle pivot or life changes in the business as a pivot. First, you know, it's there's an intentionality you have to have, you know, early on you're wearing every hat and then you bring on that first team member and you can see people who maybe don't scale as much because they don't Right? What is the highest and best use of your time? And you need to be really honest with yourself, what your strengths are and what your weaknesses are and hiring your weaknesses. And I know you want to talk at higher levels, but that's the basics. It's, you know, it's letting go and really scaling. Cause often where people will top out is they don't trust. They hire one person to do some stuff and they never let go of, you know, of the responsibilities. And guess what? They are the bottleneck and they are the reason why their business won't scale because they just won't empower. you know, individuals to help them scale. And so I think that's that first choke point that really gets you. You know, the other is, you know, it's really investing in talent. It's the most expensive and most important resource. And, you know, it's understanding that early stage, you need versatile resources, and then as you grow, you become more departmental, then you can get resources that are more focused. So it's having the right hires into different places. And understanding you are making investments, it's scary. There's a whole emotional piece. So not only, you know, some people don't let go because it's like, well, now I need to add that person and I'm making a good living here at 15 properties. But am I going to grow enough to 25, 30 where I can justify that next hire? And so ask yourself logically, it's not only I need to grow, but am I making the right investment strategically to grow so that even though I'm taking a step back. That I know I'll get a return on that investment. And that happens at different pivot points. Every time you're adding to your staff and evolve. So you said it's like, you know, that 15 and that 30, even at that 50, those are different leaps. And then you get to a hundred, you now have like a director level and that's, you know, like staff and those are, might be a couple of people. That's a huge investment. And you want to continue that growth cycle. And then the other thing that really rings true on that is your processes and always looking at where things are breaking down. You can get away with a lot of inefficiencies at a small size. But guess what, as you grow, those inefficiencies really start to show up. And so what feedback loops do you have in place to start to see what guest issues are popping up? What concerns homeowners? What are your response times? And seeing where some of those things are so that you can isolate those inefficiencies. And some of it might be, scope of what a different position in a person's responsibilities are. Some of it might not. lack of having a dedicated resource in the area as you're growing. But that's a, it is an evolutionary process and you have to be very intentional. And if you are tied into the day to day and you're doing the day to day stuff, guess what? You can't be working on the business, you're in the business. So your perspective is just, you're right here. You can barely keep your head above it. So,
Jasper Ribbers:
Mm-hmm.
Lukas:
I mean, it's, and there's no one size fits all. That's what I'm saying. It's that intentional focus. It's getting, you know, have that feedback loop. so that you really are looking at where those inefficiencies are. So it's, again, I could spend an hour on it because that's what we do, is we really help people get to that next level and love living in that space. But there's logical things and there's emotional things. And it takes, you know, making some big leaps and investments because it can be scary to do that.
Jasper Ribbers:
Yeah, a hundred percent. You know, one thing that, uh, that I see in our, in our groups, that's often the kind of like the chicken or the egg or the one million dollar question, whatever you want to call it, but it's like, you get to a level where you realize, okay, I'm wearing most of the heads. I need to get myself out of it. But you know, I, I'm not sure if I can afford to hire like a general manager, for example. Right. So what do you do when, when you're at that level where you can't necessarily afford the person that you need? but you also don't want to keep doing all the work yourself.
Lukas:
Yeah. And that can be a tough, especially if you're stagnant in your growth, because you're looking at going, okay, I don't know how I'm, you know, how I'm going to get out of this, you know, so it is charting out. What do you need to be able to justify it? And so it's like, I'm going to hire that general manager and I'm at 30 properties. Well, how do you solve that equation going? Okay. I can't afford it today, but what do I need to build? I need to maybe make some of that other investment and go through this, this aches and pains of, I got to gross to, you know, 45, 50 properties. So what am I doing on the business development side? Do I look at my commission and fee structure, the things I could tweak to modify there? You know, is there, can I be a little more proactive on deep cleans, maintenance, other areas to maybe help justify that position? So I think you need it and you can afford it. You know, you just gotta maybe get creative, but if you don't have the growth trajectory, you're gonna kind of be stuck in this vicious cycle and you'll be spiraling. And so I imagine that in your mastermind group are running into that often. And that's a scary, scary place to be if you're not growing. So we really always advocate getting your business development dialed in because that just makes it a lot easier to make those leaps. If you have that and you're growing, then it's a temporary setback to add that general manager, that next operational layer. When you go, OK, I know by the end of the year properties, you can chart out and go, okay, I am taking a pay cut now that I hire this person, but I can see the trajectory and where the ROI is, and you know, and then the quality of life, if you can get elevated and work on the business a little more. So it that is supernatural. And I say, you know, that's supernatural, but supernatural to feel because I have seen that in many different businesses. And that's the common challenge. And that's where most people top out because that's a That's a bigger leap because that's the general manager is the last thing to let go because you're in control
Jasper Ribbers:
Thanks for watching!
Lukas:
and then feeling good with, okay, someone else is gonna be running that day to day. So that's also
Jasper Ribbers:
Right.
Lukas:
emotional too.
Jasper Ribbers:
And how, yeah, let's talk a little bit more about that because I see that. I don't know why, but I always feel like people in the short term rental industry tend to be a little bit controlling and perfectionist. And maybe that's just our groups, but, um, and, you know, and that makes it really hard to let go of control. I like, we take a lot of pride in our guests reviews and everything. And we're like, Oh, I don't want, I don't want a single four star review. So I need to do everything myself because if I let somebody else do it, then make a mistake and there's going to be something is going to go wrong. Right? So how do we let go of that?
Lukas:
Well, it's common with small business and entrepreneurs. It's a learned behavior. You've been successful because you've done everything. And the understand that that's not the success, that's got you brought you success at this level, but really gonna make you successful. The next level is a team. You can't be everywhere. And so it's the logical element and understanding if someone's doing it and they're 80% or better of what, you know, of what. you were doing, that's good enough and have the right checks and balances. And, you know, to, to make sure that things aren't going off the rails. And so you can quality control and check that part is really is emotional. And, and I get it because guess what? That's what made you successful to this point, but it's kind of the same thing of why people started a business because they wanted to get a better percentage of the return on their time. If, if they're going to continue to be, you know, hold onto everything, you're only going to get paid for the hours you're working. If you really build a business now you're a multiplier, right? That's where the incremental income potential is. So part of it's you got to help, you know, there is give yourself permission. Part of it is really be strategic and then set the guide rails around like your comfort and what are the right checks and balances so that you can feel good. I've done it come behind, you know, you know, large businesses and entrepreneurs, and if that general manager or whoever you're letting go that too. What reports do you have in place? What scorecard? Like how can you still stay dialed in and have those kind of those metrics that you're paying attention to the business? And so you can see when things are coming off, but that doesn't require you to be in and touching everything, need to be thinking in terms of scale. And there's a logical piece, but there's also give yourself permission. Cause then again, people are also, you feel guilty like, Oh, someone else is doing it's my business. Well, no, that's what you did. You've created an opportunity and you, you took that risk. So again, I'm a broken record, there's the logical pieces, but there's also a psychology and an emotional piece that you gotta give yourself grace and permission to let go of.
Jasper Ribbers:
Yeah, yeah, no, 100%. So let's talk a little bit more about, you mentioned the emotional piece. There's the logical side, which is the operations and the efficiencies and all of that. But I also feel like when you start hiring people and you're not doing the work yourself, but now you're leading all our team members, from my experience, I've noticed that it brings different types of… emotional challenges as well. And I feel like I kind of had to grow as a person to kind of be able to, you know, to deal with that. What, because, you know, in the end of the day, like, we have, I think we have to grow as individuals, you know, to be able to go through that process. What are your thoughts on that? Is there something specifically that you have done kind of to level up as a person to be able to run these large companies?
Lukas:
Oh, very intentional about professional development. So what you've said is probably one of the most common challenges. I've seen it time and time again, with having thousands of employees throughout my career, that leap from being an individual contributor to a manager and a leader is one of the hardest leaps, uh, because you're so used to being again, why you were successful. Like to our previous question, I just do everything and now you have to be a multiplier and develop people. And. You know, so to directly your question, I'm very intentional about professional development, reading and mastermind groups and, you know, part of young presence organization and all of these different things, I dedicate time every day to something I'm trying to get better at, um, skills. So very intentional about professional development and every team and culture I have, I do the same things. I want to make sure we're dedicating time. We may be wait very busy, but I believe, you know, when I, I hire someone. I'm going to ask a lot of them, but I want them to ask a lot of me. And I want to be intentional and dedicate time to that professional development and be a multiplier. So to me, it's just like any other strategic initiative. It's improving yourself and it's the best investment you can make. Like it's going to be the best return on your investment is working on yourself. And key is right, knowing yourself, your strengths, your weaknesses, and being honest about it and really working to it. And so, you know, I come from a sports background and I kind of bring that mindset to it of like, okay, what do I need to shore up? How do I get better? And I'm, you know, to this day, everything I do is, you know, I feel like how can I improve so that I can show up and be a better leader? Cause I feel like that's my obligation, uh, to, you know, that everyone that works for me and it can be hard as a, you know, that first time being a leader and taking on, you know, having a team because we see the world through our lens and how we view it. And we have to understand everyone sees things different and we want to hire people different than us because it, it really creates a great diverse, you know, viewpoint and energy and everything. And so that's usually a big leap too, for a manager is to, okay, understand people, look at the world differently and how do you support them? No, I really value taking care of my team, but They all kind of get managed and supported differently. I tailor that support and I really coach that because, you know, someone who likes direct feedback and really, that's a different conversation than that person who's, you know, is very, takes everything personal. And I mean it in a positive way, like, you know, their heart's connected to it. And so it's like, how do you bring them along is going to be different. And you have to tailor that support, so. Yeah, to me, the development of people is the best thing you can do. And I feel like the only way you can do is leave by example.
Jasper Ribbers:
Hmm. When it comes to hiring, like what, what's some advice? Cause what I see with early States entrepreneurs, including myself was that, you know, you, you see you need to help. And so you kind of look around and you're like, okay, who do I know who has nothing to do right now and can come, you know, it's kind of like trying to find an easy fix for, for the problem that you have versus really thinking about like, okay, well, what's the role. What's the skill sets required? What type of person? What's your, what is your advice on that, on the hiring side?
Lukas:
That is one that gets shortchanged so much and it's common. First is clarity of what you need. Like draw up a true, not only job description, but like a mission. And what are the goals of someone successful in this role? What are the key attributes? Take the time to understand like successful, you know, I'll say guest services manager will accomplish this in 12 months. Here are the top three skills. That gives you a framework for really interviewing. And I will tell you it's, It's funny because even when I've had, you know, large teams, hundreds of employees, I tried to be a part of interviewing as best process as much as possible, because I want my teams to interview and people multiple times and really get to the core. It sounds painstaking, but if you're investing that time, you're layering in personality profiles, aptitude tests, you're more likely to get it right because it is so expensive and costly to get a higher wrong. And you got to make sure it's right for them and it's right for you. And so the more time you're dedicating, the better picture you're getting, the better picture you're paying for them. So I invest a lot of time, multiple interviews, hours with candidates. To me, it's one of the most important things you can do because you're people. And it makes it easier for you to let go if you've really invested a heavy amount of time. And so there's like a number of great tools. So whether you're using like for the personality profile, they should match up like. There's the PI, there's disc, there's a lot of great resources there. Same thing for like aptitude testing. Um, I'd recommend, um, the who method. It's a great book. It's by GH smart. They're a company and kind of going through screening. So it's a great resource. Um, and you know, it's kind of best practices on how do you interview. And if you, it's funny, they're telling you to spend, you know, six, seven hours with candidates and it's like, if you do that, you're going to have a good feel of who people are. Um, so. I know it can be painful, but it's a worthwhile investment on getting it right. And it's never perfect, but what you do, if you can manage out the margin of error, it, you will have a huge advantage over those who kind of short-changing go, Oh, here's a warm body. Cause it more
Jasper Ribbers:
Yeah.
Lukas:
likely than not, you're not going to get it right. And I hate to be say, so, you know, so cavalier with it, but I know that's an extreme example, but there is, I'm like, I need someone now. And I'm, you know, I'm just going to try to hire the first person. I think he has a great personality. because guess what? These are important jobs and you need someone who's got not only the experience, but the attitude and the mindset and it's a fit for them because turnover
Jasper Ribbers:
Hmm.
Lukas:
is way too expensive. So sorry to get preachy
Jasper Ribbers:
Yeah.
Lukas:
on you, but that one's an important one. I spend so much time on that.
Jasper Ribbers:
Yeah, I mean, we've experienced this firsthand as well quite a few times. So I appreciate the advice here. Before we wrap up this podcast, I would love to ask you, you've been in the short term rental space now about two years or so, I believe. What's one thing, what's the biggest learning lesson for you in our industry? And then my second question would be, what's one thing that you would have done differently if you would start over?
Lukas:
Yeah, it's funny because the bias I came in with the long term, I didn't realize that revenue management side as much. Like I knew it was important and we're going through that, you know, that I'd say ride high tailwind of the COVID window. And it was amazing that, you know, so to me, it was illuminating of how important that is, not just the tools, but the training of it. So it's kind of not only, I'd say the biggest learning, but what I would do differently is that would have jumped in that. Not a couple months in like day one of really getting deeper into it. Um, as you know, I already kind of preached about it before. I think it's one of the most important parts of our business. But during that window, when we had that tailwind, you didn't know that you might be leaving money on the table. You're, you're at such high occupancy rates and it's like, Oh, we're adjusting up, but realize we could have probably adjusted rates up even higher and it could have been.
Jasper Ribbers:
Yeah, you don't know what you don't know. I remember when I first started with my first Airbnb in 2012, I set the price and I left it there for about a year until I started using one of those pricing apps and I was suddenly like, whoa, it's recommending twice my price for this whole month. I'm like, I've almost felt guilty,
Lukas:
Yeah.
Jasper Ribbers:
charging so much, but people are paying it.
Lukas:
But that's a common theme, right? That's why you need the data and everything because you anchor to historical norms and people who just say they know it. That's usually the common like, wait, I can't charge that. And then just like, give it a chance. Let's see what the tool, and then it books for it and people can be blown away with actually what it can do because you're bringing this bias, this historical norms that aren't relevant to today, right? Some of them, and it's like you have. You need to make sure that you're blending your past experiences with what is really the market dictate. And that's a real common one because it can be scary. Like, wow, this property can do how much a night? Like you said, 2X. And you look at the comp set and everyone's price there. And guess what? More times than not, it's right.
Jasper Ribbers:
Sometimes even if the other people aren't charging it, you can still charge it. It can set the market. Sweet, tell us a little bit more about Sky Runification rentals. Like where are you guys located? What kind of type of properties do you manage and what kind of guests have at our like who are you targeting?
Lukas:
Yeah, Skyrim Vacation Rentals was a company founded in Keystone, Colorado, back in 2004. We are a franchise company, so we're independently owned and operate. We do have company stores. We have, you know, we're kind of across the country, you know, from California all the way to, you know, the Eastern seaboard. So, you know, Florida, South Carolina, we really started to make more of a presence in the urban markets, you know, the, the Nashville's, the Austin's, the Dallas. And so we're a pretty diverse ranging company and we're going to continue to grow probably at probably 10 more locations here before the end of the year. So continue on a nice growth trajectory. You know, our homeowners, our sweet spot are the individuals who are those who have homes and they want to be able to use it a little bit. And it's like, this allows them to have that dream of having that second home and access it. That's kind of our primary. They care. They value. a little higher touch, a little higher care for the home. We still do service for investors, but I'd say that's kind of our sweet spot as that homeowner because we're not the low cost provider. We're the high value and we believe, with our attention to revenue management, we'll generate more income, but also the higher touch, we're gonna take care of that home because that's the biggest investment. And over a third of our guests are repeat guests. We take pride as a system average over 4.8 stars, 600,000 previous guests and you've been in this space, you know how hard it is to kind of consistently do that. And so we take a lot of pride at, we provide great experiences and it's, you know, we get repeat business because of that. So it's, I feel really fortunate coming into a team that built some amazing things. And, you know, my job is to build upon that and just really help us scale and really, you know, we strive to build the best operation in the industry and that's our goal. And so continue to make those investments and. training tools and support to make that happen.
Jasper Ribbers:
Awesome. Where can people find more information about the company or if they want to stay in one of the units?
Lukas:
Yeah, Skyrun.com is probably the easiest place. So skyrun.com and you'll find kind of all of our locations, our properties, and you can learn about kind of our franchise model if you have interest around that.
Jasper Ribbers:
Awesome. Well, this was great. So much value in this conversation. Lucas, I really appreciate it. Thank you so much for doing the show. Good luck with Skyrun. What's the goal? How many units in the next 10 years?
Lukas:
You know, we don't have a hard goal. It's nice because we're privately held. So we do have some of those targets. I do believe in the next three years, we'll be over a hundred locations. Imagine a few thousand homes. Um, but as you know, it's to us, it's about quality. We want the right franchisees, the right operators, but also the right homeowners that fit our model. So we will be selective. So that's the nice thing about it is those targets are there, but they're not like the, you know, absolutes. Those targets are a guidepost to drive us.
Jasper Ribbers:
So you're not looking to crush that previous record of 65,000.
Lukas:
65 in the short term would be pretty impressive. We're not going for that. I definitely know that. Ha ha ha.
Jasper Ribbers:
All right. Well, thank you so much, Lucas. Appreciate it. And to the listeners, thank you for listening. I hope you enjoyed this episode and we'll be back on Monday. and see you then.
