Are Experiences Changing the Way Guests Book Travel? (With Seth Borko)

Speaker A: Um, foreign.

Speaker B: Adam, good morning. What's happening? What's going on?

Speaker C: Morning, Conrad. Great to be here. This is going to be a good one. We've got Seth from Skift on, so I want to jump right into it and start chatting. But before I do that, I'll give my quick sports analogy. So today's thought is around new rules for college sports. And what they've done recently is they've shifted college sports to five years of eligibility with the opportunity to transfer schools one time, which is a significant change from the past few years, which was open transfer among schools. And there was a lot of debate back and forth, especially after Covid, about how long some of these players could be in school and actually playing. There were some guys that were playing at, you know, late 20s playing against 18 year olds in college sports, which is crazy. But that's only been happening for a few years. And then you throw on top of that the nil, which is the ability for these college athletes to get marketing dollars from the school and from other companies that might want to use their name, image and likeness, which is the nil. And all of that came together really quickly and has changed things significantly. Now, after the past few years of it being a little bit of a Wild west situation, the NCAA looked back and said, hey, let's look at all the data and figure out what's going on and what's worked, what has not worked and what's been beneficial and what has not been beneficial. And uh, one of the things we'll talk about today with Seth, I think is around the experience economy, one of the actual going out and having an experience. But two, what is that experience of using a product or going through that process? And I think that this NCAA rule change is one of those things where we've looked back and we now see a couple of things. One, it was not a great experience for viewers, for athletes, for schools, for coaches to have all these students coming in and transferring back and forth among schools. And then layering on top of that the ability for all of these dollars to start flowing towards 18 year old kids coming out and trying to make big decisions. So they've adjusted that. They looked at the data, they looked at the experience, and now they've gone back and they've adjusted it. And I'd argue that it's a pretty good adjustment. Now you've got five years when you get out of high school to play college sports. If you don't use it, you're done. There is still some nil that's involved, but at the same time it's going to be much more reduced because you don't have a lot of this negotiation between teams and schools trying to pull kids from one team to another. So with that said, I think the analogy to today's is one, there's a tremendous amount of value in the data that we are collecting and that we're using on a regular basis. And what we should do with that data is then look at the experiences that we're creating, the experiences for our teams, the experiences for our clients, the experiences that we people are having once they go out and start to use our products. And we should then adjust accordingly. So really excited to, to chat with Seth about some of the changes that are coming our way.

Speaker B: What, what's shifting tides too, Adam? Right from not getting paid where the rules are very strict to like you said, wild west, and now like maybe zeroing back in, which I don't know isn't. Uh, don't we sometimes find our level in that way of going away from left way to the right and then back to the middle where it maybe should have been from the beginning. But I digress. Seth, welcome. We're excited to have you on today. I was joking, Bill. Rate record. We made it to the top of the rung here. I feel like in terms of media publications, Skip topping on as a non serious media publication, just a fun podcast that a few guys do. It's fun to have someone who takes this stuff super seriously. So on a serious note, we are excited to have you. But Seth, maybe some people listening don't know exactly what you do at Skip, so we'd love to hear that before we get started.

Speaker A: Um, thank you for the kind words. Thank you for the kind introduction. I'm going to be thinking over how, how college football applies to travel going forward. I think it's definitely. Travel is definitely the big leagues though. It's definitely the pro leagues though. So that's one thing I would put. Thank you both for having me. Conrad and Ahmed. Adam, My name is Seth Borko for your listeners. I, I head up SKIFT research. So if you don't know skift, we are a, uh, travel intelligence platform. We basically are trying to be intelligent. Everything you need to know about the business of travel for kind of the leaders and the operators that are really stuck into actually executing. When I first joined Skiff, I had, uh, friends and family. Oh, Skiff travel company. What's the best beach? Where should I go on vacation? It's like, no, we, we, we're Much more in the operational business side of it. We do news, we do conferences, we do consulting. And we have my department, which I run, which is the research division, where we look at competitive intelligence, at trends, at forecasts, at economic data, and try and bring those all together into storylines and data and reports that you can use to guide your business and make decisions about your business. So that's the team that I lead. That's a little bit about. I guess not so much about myself, but a little bit about myself. About Skift as well. So glad to be here. Yeah. Glad to be here.

Speaker B: It's fantastic. Seth, a song that best describes you. Maybe we will get to know you a little bit better in that question. We always feel like music tastes can tell you a little bit about a person, so best songs describes you. Then we'll dive into some follow ups.

Speaker A: Yeah. So I don't know if this best describes me, but I'm a big fan of the Grateful Dead. And. And there's a great. There's a great lyric. What is it you say you want? Let me see if I can find it. You know the song Trucking? It's one of the classics from the Dead. What is it? It's like a hanging around. You like to travel, get tired of traveling. You want to settle down. I always really enjoy that. That lyric, that line in the song. I really like that song. It's all about moving, about going to the next place, about what you really want out of life. What a long, strange trip it's been the most, uh, from that one, as well as a classic deadline. And I think about. Sometimes I do think about that as I'm traveling. We do a lot. I love to travel. I hate being at home. I love being on the road. And then when you're on the road, you're so tired and you're like, I just need to get home. And I always think of the Grateful Dead when I think of that. So that's a song that feels relevant. It feel. Feels relevant to me in a lot of ways in my work. And I love the band, so that's my answer.

Speaker B: We've had a few Grateful Dead, Adam, haven't we? That's not the first time that we've had a Grateful Dead, but not that song. I think there's been different ones that we've. We've had on here, but. Seth, uh, my knowledge of the Grateful Dead was very much painted by my fandom of John Mayer, who came in and did kind of the Grateful Dead revival kind of style thing.

Speaker A: Yeah.

Speaker B: Yeah, Dead and Company. And so, uh, I found them through that. Not through maybe the normal way that people find the Grateful Dead. So my introduction was probably very strange compared to most people. But I still like many of the songs. So it's fun to listen to for sure.

Speaker A: They're just fun. There's no wrong way. They're just fun to listen to. And they're classic for a reason. Also, there's another traveling. One of the original, one of our big themes is live tourism. People traveling to see bands, to see concerts, go to Mexico City to see Harry Styles. And they were one of the original bands where you would travel great distances to see them perform. So I think there's a lot there to be said about them.

Speaker B: Yeah. And a different show every time, isn't it? Even if the set was the same, it's not exactly the same experience when you're there. So maybe that speaks to a little bit of what we're going to talk about today too.

Speaker A: Right.

Speaker B: It's not just like uh, a movie that's playing back in the same two hour, uh, clip or two hour digital format. There's something interesting, there's maybe that kind of ties into it. Adam, as we kind of go get started here, I guess there's so many storylines and Seth's focus is a little bit more broad than our little weird vertical that we live in the short term rental and vacation rental space. But, uh, when you read skiff stuff, Adam, what's kind of your read on, like how we can use the information and the data and the reporting and things like that from places like Skift and other types of similar news media outlets and apply that to our uh, everyday knowledge. Because I feel like there's always that balance that we have to strike. Sometimes when I'm working with a client of what's the macroeconomic trends. And then it's like their phone's ringing because a toilet's broken and they got to fix that. So it's like, how do we kind of sift through those things? Because, uh, in travel we do have to deal with all layers of it. What's happening, the big scale, what's. What am I doing as like a company strategy? And then there's a toilet broken that someone my team needs to go fix. How do we kind of make that make sense?

Speaker C: That's a great question. So I guess I would start with a couple of things. So first, Seth mentioned that travel is the big leagues. And I would agree travel is the big leagues. But the small part of travel is really the vacation rental industry. And I think you nailed it, Conrad, that there are a lot of variables and a lot of pieces that pull operators in different directions with vacation rentals, right? Somebody's got to clean the toilets, as they say. So I think that one of the ways that I think about the skiff data and when I look at the reports and there's another piece that, that Seth, uh, mentioned was storyline, right? They're looking at the data and how to create a storyline with that. And there's different ways to look at data. There's different storylines, there's different narratives that you can pull out. And I think one of the important things for vacation rental operators is, and vendors, really, the entire vacation rental industry, is to look at the larger storyline and then determine how it can translate into what you're doing in your everyday life. Now, I still think the larger storyline is really important because there's macro stories across travel and hospitality that have big implications within our small world of vacation rentals. However, the implications may not be the same in vacation rentals as they are in car rentals or flights or hotels. So I think we need to look at the narratives, we need to look at the storylines, and then we need to determine how do they translate into our everyday operations. With that said, I think it's very important that we pay attention to this data. It's very important that we pay attention to these narratives. I think that the argument could be made, if I'm just doing what I can do in my own backyard, then things will probably work out pretty well. And I think that for the most part, that 80, 20 rule, you're probably right. However, I think that this industry is getting exceptionally competitive and. And it's going to be more and more important to stay ahead of the curve, especially with technology and AI and all the other pieces that are coming in. In addition to that, we just see travel trends changing, and we've already mentioned one around experiences. I think, uh, if we're not taking the time to digest this bigger picture data and then translate how that data is into our everyday world, I think that we can get leapfrogged by someone that's coming behind us that sees these opportunities and capitalizes on them faster than we might be able to.

Speaker A: Adam, can I just jump in there for a second? And I'm very privileged. I get to do a lot of talks and public speaking, and I'll often find myself in a room full of str property managers or hotel general managers. And I have to tell you a little behind the scenes but when I walk in those rooms I am nervous because I'm like, what could I possibly have to teach a hotel GM or a short term rental property manager? Because these guys and girls know it better than anyone else. And often though, what I find is you get so rightly so focused on the day to day on um, the execution and so it often is great. I learn a lot about that day to day talking from them. And then I try and bring in those big picture, the strategy, the trends, connect the dots between what you're driving towards. And often, and again it's a little bit different the hotel side, but often the hotel side there's a big picture corporate strategy and then you've got the folks in the ground who are trying to execute it. STR it's the same, just often small, smaller organizations, although there are some very big organizations in the STR space. And so yeah, I find that interesting. Like how does the broken toilet connect to the experience economy trend? I think it really does connect and I think that's, if I can say so myself, one of the things that Skipt has built its reputation and brand on as well is trying to connect those dots and say ultimately everything does come back to the consumer, everything does come back to these trends and it's just different layers of execution. I'm going to try my hands at a football analogy, although I'm not a huge sports fan, but it's, it's the difference. The coaches, the Sabins, the Lane Kiffins, and then there's the blocking and tackling and the ends and the, every part of the team has to place them together. And there's the big picture and there's the blocking and tackling and the passing and everything. And if you can't, if you don't have a plan, you can be the best, you can be the best running back in the league and who cares? And if you don't have, and vice versa, if you have a great plan and bad execution, you're never going to win any games. So I think I'm trying my best here, trying my best here.

Speaker B: No, it's not required, Seth. But we appreciate it. I think it fits in with our themes that we hit on a lot. And we always say people get nervous sometimes that they're not big sports fans and that's okay. It's just something that Adam and I talk about. So it's a good way to tie it in.

Speaker A: My brother in law is a big LSU fan, so I've learned all about Lane Kiffin. So I'm keeping up to date on that. That's about what I got. I got some sec. I got some sec news and drama and ah, not much else though that

Speaker B: seems to follow him, isn't it? Which is maybe an interesting story. Just like some leaders in travel, they seem to have trouble that follows them as well. There's some interesting pieces there, but I think you're spot on when it comes to it. Makes me think of there's an old quote and there's a new quote. We could do any version of it but it's like we're making great time but who knows what direction we're going in. I think that speaks to poor strategy, but quote unquote, good execution. And I think maybe we have seen that in past in the short term rental space as people that are like, we're going to build this awesome national brand. And of course Fakasa was the first kind of most recent ones that's kind of blown up and whatever. The Vacas now is not what it was obviously when it was a public company. So it's not really comparable in that way. And there's been a lot of failures and I feel like a lot of it comes back to in our industry more the homeowner experience and the guest experience. I know we talked earlier about the idea of you're going to see a concert, you're going to see a sports game, you're going to see a X, Y, Z. And that's obviously what can drive a lot of demand for rentals. But it's. If you're in our little bubble, if your homeowner strategy is wrong, then it also doesn't matter either.

Speaker A: Right?

Speaker B: Because it's like Vacasa, the old version of it was incredibly skilled at signing inventory and they couldn't keep it. And Bob was on now what, two weeks ago. I think Adam from who had been at Vacasa during that time frame and he acknowledged that he's like, hey, yes we were and we weren't able to keep the homeowners. And that's what ultimately led the demise of Vacasa. So if that's the. If, uh, that's the problem, I don't know what the research side of it can tell us. It's like sometimes the answer is pretty simple. I'm sure Seth, once you and your team dig under the surface, there's a lot of subcategories and reasons of why people in our space have failed to reach scale or make these large brands and companies in the short term rental space. But from our end, looking at it and being very deep in the weeds, I feel like the answer sometimes does become very simple. We have to get great guest reviews and we have to retain the homeowners and then we can get really big. But if we don't do one of both those things, well, we're just going to fall flat interface. So have you kind of looked in that space before? Just kind of your thoughts of these kind of big national brands? Because it seems to be a recurring topic that we talk about a lot.

Speaker A: Yeah, it's something that we've looked at in the past, I would say. I'm trying. I don't have the exact phrasing, but I think it's worth pointing out that simple is not the same thing as easy. You know what I mean? And I think some of this stuff is simple and it's difficult. I think we think that just because we can verbalize what needs to be done in a sentence or point to the problem doesn't mean that it's an easy problem to solve. Right. I think that's a big pitfall. And so to your point, it's like, oh, just all you need to do is have a great customer experience. All you need to do is have a great homeowner experience. Yes, you are correct. That is all you need to do. And that is a very hard thing to do. And so I think that's thing. We've looked at these, these big operators in the past, way back, remember 2021, ancient history. We've looked at Sonder, we've looked at Vacasa, of course Airbnb, we continue to cover all these, these operators. I think this is a particularly, I think short term rentals is particularly interesting because it's not one sector, right? It's not really one sector. M a huge multi compound, sometimes even multiple properties in North Carolina for a multi generational family trip is a very different market than a condo in Miami. They are both short term rentals, they are both often sold and marketed on the same platforms and they have very different use cases and very different customer profiles. And that's okay. I don't know if it's fair to. I'm contradicting myself in literally the first sentence. I don't know if it's fair. That's true of hotels too. Right. And Marriott manages to make it work where they have select service and full service and luxury all under the same portfolio. It works. But uh, the danger is painted with a broad brush. And I think it's just so important that as the these platforms, whether they are distribution platforms, Airbnb or property management platforms, or homeownership kind of vacasa platforms, as they scale, they need to keep that in mind that these are different markets, they have different regulations, they have different use cases, customer go to market cases. Right. And that is, I think, where a lot of the pitfalls, at least in the past that I've seen is a lot of especially people from outside the short term rental space who are invested in the short term rental space will put a lot of money into a couple companies paint with a broad brush. Assume you can go if you can do it urban, you can do it rural. If you can do it condo, you can do it multifamily or vice versa. And that is not. It's possible. And I would point to Airbnb, which does manage to have many different types of properties for many different use cases on this platform. But it can be hard, it can be difficult.

Speaker B: Adam, you've hit on that thread a few times. Maybe that's worth spending a moment or two on. Because I think Seth did explain it. Well, yes, there's these two kind of main categories of the business, but then within that there's like many categories and then subcategories. Right. So what is a good guest experience? We can break it down into a lot of different things, even just relating back to price. What did you pay for it? Because if you paid X for it and then you get the same experience versus paying Y for it, then you feel differently about it. Right. Even if the actual end experience was the same. So there's so many categories and sub fractals there that we could dive into. But Seth mentioned this idea of money flowing into our space and maybe that money that has flown into our space both in the past and still is happening today, not the same scale today as it was years ago. Are they educated enough? Do they know what they're after? Again, do they know these simple outcomes? Even though we make them seem or we make them sound easy, they're not easy. Do they understand what they're actually buying? Or they just kind of like figuring out along the way, which is kind of the vibe that maybe. Adam, you. I feel like you've hinted at before,

Speaker C: I love this discussion line for a number of reasons. But before I answer, let me ask you a question. Conrad, you mentioned there are sort of two categories. What two categories did you have in

Speaker B: mind for thinking like the guest experience angles and then the homeowner experience angles and the property manager is sitting almost like as A bridge between those things of, uh, I've got to make both sides of the coin happy, I've got to get good reviews and I've got to have happy owners. To Seth's kind of framing of simple but not easy, which is something that you've also said before, Adam. It's like those are the two parties in theory, that we have to at least make somewhat happy. Seth brought up another one that we didn't even, I didn't even mention there, which is like the community, the laws, the all the people around us, Are they actually enjoying this thing too? Or just the homeowner and guest happy? But maybe for the simplicity sake, we can put those aside for a second. But that's what I was thinking between those two areas.

Speaker C: Yeah. Okay, makes sense now. And let's start with Seth's caveat as well. Like a lot of what we're going to talk about could also be said about hotels, but two things. One, they've got a huge head start on the vacation rental industry. And two, they're much larger organizations, much larger entities. They're not dealing with unique homeowners, unique homes across, you know, miles of area that they need to cover. So with that said, I think that brushing in broad strokes to some degree, it does make sense to do it across the full hospitality or travel sector. But I think that we can start to brush with some broad strokes, at least within our small vertical. And I think that couple things. One, uh, I wholeheartedly agree that simple does not easy equal easy. And I wholeheartedly agree that I think a lot of people that look at this industry from the outside, see the simplicity, but don't necessarily see the underlying complexity that is buried beneath that execution. And we see this time and again. Right? It's the hotel groups that try to come into the vacation rental space and come in with this arrogance that they know how to do this and then they can't figure out how to get all those pieces together. It's the PE groups that come in with that same type of mentality. Hey, we've done this in so many other places, but yet we can't figure out how to get Vacasa, Wyndham, um, Resort Quest, whatever the long line of big operators is. This industry is exceptionally complex. There are a lot of variables, and I've say this quite a bit as well, is if you don't live in this industry day to day, you really don't know how complex it is. You can get pulled in a lot of different directions really quickly. But I Think the other part, if we take back and we don't brush with broad strokes, I think this has started to come up a number of episodes now is there's a variety of different models and I think that we need to be exceptionally truthful and honest with ourselves about the model that we're trying to build and then build really strictly around what that model is now. That doesn't remove the open mindedness. The industry is changing really quickly. Technology is changing really quickly. We need to stay open minded about those changes in which direction goes back to the narrative and the data and trying to understand what the data and the industry is telling us. But we need to determine what it is that model is and what the end goal is and what those results will be along the way to determine the experiences that will give to the guests, the homeowners and to Seth's point, the local community, all of our partners that are in that community. All of this takes into impact of what the vacation rental manager and what that vacation rental management company or short term rental company is building. And I don't care if that's at a beach community, I don't care if that's in an urban community. I also think that you to your point Conrad, between the two categories there's a bridge that happens between those two as well with owned entities. And it could be that you own all of the units or a resort or whoever might want to think about it, or it could be that you're doing arbitrage where you're doing these subleases and taking this on. Right. There's multiple levels of models within this industry and I think that now is a time for us to start to focus on what those differences of those models are. Because prior to this I think we could brush pretty broadly. Vacation rental sector, short term rental sector is growing so fast. The OTAs are growing so fast now that we're getting into more visibility with the traveling public as well as higher expectations. And profit is becoming much more important because it's not as easy to come by that we've really got to fine tune where what we're doing and professionalize what we're doing. But the only way to do that is to really define what it is that we're actually doing. Do we own these properties, do we manage these properties? Are uh, we a beach market, are we urban market? Who are we trying to attract, why are we trying to attract them and how do we do that? That's where all of this really professionalizes and that's where we get up to that next level. I've talked about this, this K shaped economy, but being a K shaped industry, the people and companies that fully understand what it is that they're building and how to go about that are going to continue to succeed over the next few years. Whereas we're going to have this bottom group who becomes really OTA reliant for a number of reasons. They don't want to put the time and effort, it's too complicated. But part of that is because they really haven't defined what their model is and the only way that they can succeed is by dropping to the bottom and listing everything on the ota. So I think that this just builds on the thesis that we continue to evolve around models being really important and and around the need to really think about your business holistically and professionally in order to really succeed going forward.

Speaker B: Maybe Seth, we can tie together two things there that we've already opened and you had mentioned it a little bit before we hit record. This idea of an experience economy and Airbnb is pretty opaque about how much revenue they actually make, by the way. I don't know, maybe you have more data on this than I'm actually curious about this. Airbnb seems to be pretty opaque about m the revenue that they make every quarter, every month, a year, et cetera from their experiences and kind of these services. New things that are a little bit newer to the platform versus their core what we would just call their short term rental product homes, single listings, that sort of thing. Maybe that's my first question. How much of the experiences of comedy out there goes to a company like Airbnb when people are buying so called experiences on their site versus I'm thinking other people in that space are like your via tours or kind of some of those types of things. Or people might just buy a concert ticket directly from a Ticketmaster or whatever the case may be. Maybe let's start there and then I think I follow questions about how someone chooses to book that travel which might come back into our world. But curious kind of your thoughts there of walk me through the big players there. How does the experience economy actually have the marketplaces and how does Airbnb fit into that?

Speaker A: Yeah, okay, so experience economy is a huge topic and I think it's arguably the most important topic and trend in the travel industry today. After all, it's generally with the Obviously there's a huge market for business travel, but aside from business travel, it is the main reason why people travel and experience in the broadest sense of that word I often just to start, and I would like to frame it, but just to start by framing it this way, is that I define the experience economy as something uh, that really helps sell a sense of identity. So traditionally the economy was broken down into manufacturing and services. Manufactured, good and services. Manufactured goods are cars, widgets, airplanes, phones. Right. Things, tangible things. And services are the intangible things. So isn't an experience just a service? Technically, yes, especially if you're a, uh, boring old school economist. But I would say that what differentiates them is that service sells a skill. Right? You are paying for someone's expertise. But that expertise I could pay a tax accountant for when I get audited. And I would like a very skilled tax accountant. And I want my audit to go well, but that did not change my life. Whereas someone who. When you're selling identity, you're really selling an experience. You're saying sir or ma' am are a foodie, so come take this food tour or come to Austin and try the barbecue or come to wherever you are. I see this, I don't know if you see these around where you are. I see these Salt Life stickers everywhere. You are a Salt Life kind of person. You need to be on the outer Banks of North Carolina, fishing and whatever, right? This is how people define themselves. Young people, they go on dating apps and they're going to put on a traveler. It's one of these really vulnerable things they're putting out. It's how they define themselves. So in my mind, the experience economy is about selling people a sense of self and a sense of identity. And this is obviously very lucrative because once people have their identity invested in a certain experience or travel or hobby or activity, they will pay you a lot of money for it. And especially if you can curate it and lead them to something new or interesting, that is very valuable. Now I think we're going one layer deeper. So we've got experiences and we have structured and unstructured experiences. An unstructured experience is not a product. It's just a great feeling, right? It's a, uh, property that you check into and it's just an amazing place and an amazing community and maybe meet the locals or you try this local restaurant or even in a more traditional sense, you know, you go to the Eiffel Tower, there's probably some admission fee, but you can go look at the Eiffel Tower for free, right? And then there's structured experiences, which are these paid, organized activities. You got to have a ticket for it. You got to Maybe have a guide for it. And this is again, we've put this, I forget the exact number off the top of my head, I literally was just looking at. But we've put this. And a big number. When you really think about it, it's got to be a trillion dollars or more. We've done some market size on this before, but I will say it's interesting because it's a big aggregate market, but it's sold in very small ticket sizes. So in aggregate, people will take multiple experiences on a trip, they'll go with their whole family of five or six, they'll bring their friends, they'll do them multiple times. They'll maybe even of course book experiences local in their own community. It will add up to a lot of money. But each individual ticket is maybe 50 bucks, maybe 200 bucks if you're doing a really nice job. The commissions on those are often 15%. So let's say you sell $100 tour, you make 15 bucks. If you sell $1,000 multi night stay in a short term rent or hotel, you make 150 bucks. Probably about the same amount of work to convert a customer to a booking. And so when we actually flow these things through and also it's fragmented because you're right, going to see a concert is an experience that maybe goes through Live Nation or StubHub. Going to eat out at a restaurant is an experience. So that flows through these reservation platforms. Fork, resi, OpenTable, then you can book day tours. We would call, I would call them a day tour, like a walk in, like a food tour or a history tour or a walk in tour. Those are sold through a whole series of platforms. Airbnb is one of them. Klook and get your guide are the other really big ones that sell those. Then you've got museums and attractions and theme parks, often sold direct, sometimes sold through Google, sometimes sold through these platforms. And then you have these sort of multi day tours, package tours which are experiences where you bring them all together. So what happens is this segment just gets sliced and diced, split up over multiple different buckets of spend, often with no commission, often with low commission, often with low tickets. And so it's an incredibly lucrative market. I think it's a meaningful market if you can really start to aggregate demand, which Viator, Klook, Air to an extent Airbnb have started to do if you can aggregate demand. And uh, it's also just a valuable market from a customer acquisition perspective and a customer experience perspective because if you can have a really Great experience, then that's something that's really memorable and really meaningful. But, uh, it is. Other than the dedicated standalones, Viator, Klook, get your guide at Airbnb, at Expedia and Booking, which also will sell these things. It has yet to really move the needle in a meaningful way, especially because these are huge. Klooks, a big company, they sell experiences, but they're still privately held. We don't have a ton of insight. It's ah, at Airbnb or Expedia, which do sell these things. They're public companies with tens of billions of revenue. It's hard to move the needle on that. They are starting at TripAdvisor, which was itself which TripAdvisor, which is a public company. They're thinking that's enough. They've managed to build an experiences business that really does move the needle and actually has become the growth engine. So we know it's possible, but I don't know that. We don't know. We don't know the exact numbers. And I don't want to throw a number out there and get it wrong and have to retract something. I've done some estimates before. I could obviously sharpen my pencils, but I haven't sharpened them recently. But the point is that it's a meaningful market. We've seen standalone businesses grow on it. We've seen TripAdvisor and Viator become its growth engine. The future and the potential is there. But it became the experiences became the growth engine of TripAdvisor because core TripAdvisor was growing, was struggling so much. So when you have a really strong core business that has a really great margin and commission structure, it can become a little bit harder to move the needle. I don't know if we're going too far into the weeds here. I'm trying to answer multiple iterations of your question and talk about a lot of stuff at once. I'm coming a little bit free flowing, so stop me and, and stop me here.

Speaker B: But no, it's all. Yeah, it's good. I think we're fishing the right ponds here. 100 sets. So, uh, I think we're where we want to be. Because where I was going to go with it ties in everything you just said with. All right, so the vacation rental manager listening goes, okay, that sounds good. And Adam, I'm still your line. Apologies in advance. The. The home is the tool to get them on the vacation. Right? So they're there and they're in the Outer Banks. Then they go I want a surf less thing. I want to go rent maybe a Jeep for the day and drive around or I want to go do a tour of the Wright Brothers Museum or whatever the case may be. That's where Adam's based. So your, your salt sticker and stuff like that was bang on set, perhaps unintentionally. But anyways, so the manager goes, that's perfect because they're going to come here, they're gonna give me two or three thousand bucks for the short term rental for that stay. I'm gonna get my commission on that. Then I'm going to go sell them a ticket to the museum to go see the Wright Brothers and we go sell them a surfing lesson with my guy Jim down here who teaches surf lessons. And I'm going to get more commission on that. And I'm just going to be rich because they're coming here and they're spending two grand on vacation on the rental and they're going to spend another two or three grand maybe on experiences while they're here. It sounds great in theory. Again, back to our earlier commentary of sounds simple, hard execution. And then it seems like very few clients who I work with actually execute this very well. So it becomes a, I think a very much a timing thing. Like when someone books the experiences versus when they book the actual accommodation may not line up very well. May not be consistent. The logic would be that you maybe book the accommodation first, then you book the travel experience after. But I've certainly had the opposite experience myself. Like one of my hobbies of choice is I'm a golfer and I may scare the tee time purse because that's the hard thing. And then the lodging. I can stay anywhere, but it depends on the course because sometimes you have to stay at the actual course in order to unlock the tee time. So there's always these variants and different ways that different places do it. So a lot of layers.

Speaker A: You're the only way to get on at Pebble Beach. You're the only way to get on pebble beach is to book the hotel first.

Speaker B: Yes. Which a basic room is going to be 17 to 1900 a night for a pretty straightforward room. Plus they're going to ding you on the. Yeah, it's like multiple mortgage payments. Maybe not in New York. It's multiple mortgage payments for those of us Carolinas to play one round at pebble beach between the accommodations and the. And the. And the actual tee time. So. Good.

Speaker A: Can I respond to that? So one, I just pulled up some of the numbers this was a study we did a couple of years ago. We did it with McKinsey and co. So we feel really good about it. It's just a little older, but these numbers don't move much. But we put experiences as a really broad thing, including live events, including nature, active channel, including theme parks, amusement parks, including health and wellness and spas, including museums and iconic sites. We put it at $3 trillion of spend. Then we put about tourist share of that at about 1 trillion. I'm using, I'm um, estimating here. Things like museums, things like are often enjoyed by locals as well. One trillion. And then we put that paid and structured market at 300 billion because some of it is free, some of it is unstructured. So I just wanted to clarify the numbers. This was a study we did with McKinsey. I like the thing with market size and is. It's a fun thing to do, but there's always assumptions and estimates. We could refresh that and change the numbers as we wanted to. But to your point about, oh, it seems easy, it's genius. I just need to sell experiences and ancillaries and upsells and look at that. I'm going to be rich. Uh, that's really what I wanted to respond to. Let me say something, Conrad. They're all booking experiences. There's not a single one of your guests that isn't or let me expand and I will play into Airbnb's message a little bit here because they've added services like massages and chefs and some places, maybe not Airbnb, but many places will offer. Actually, uh, many places will offer grocery delivery as well. Obviously instacart cart plays in the space. When you start to think about restaurants as experiences and you start thinking about instacart grocery delivery. When you start to think about chefs and cooking, when you start to think about all these things, they obviously are not coming to your short term rental and just sitting there and breathing and not eating and not maybe even if they don't leave the house. I assume they're eating and shopping and cooking at some point, right? They are. All these services and experiences are being paid for. They are being customers are doing them. Why would they leave home if they weren't going to do them the own. The real question is, are they booking them through you? And so it becomes a question of channels, of commerce, of book and flow, of customer guest flow. In your point about the guest flow, maybe the dedicated golfer is going to start their entry point into that journey is through golf and they're going to come on a golf specific platform. I actually don't play a lot of golf. But they're going to book the tee time specifically, they're going to do their own things and then you're a secondary. But for a lot of people you are their entry point into this trip. Maybe flights is earlier but our research increasingly shows that experiences and this is another thing, our research increasingly shows that the experiences are at the front of the book and funnel. And so I would say one other point which is that so one, it's a question but you're saying I'm going to sell them the room or the bed or the house and then I'm going to upsell them the experiences. Our research shows that increasingly the experiences are being decided first. Just like you said Conrad, you pick the golf trip first, you decide your golf first. You might need to think about your experiences as a loss leader to get someone in your book and funnel and say actually booked the golf. And then by the way, I happen to operate a short term rental in the community on the course. I, my hobby is scuba diving. I'm a really big scuba diver and there's a great operator that I love in the Cayman Islands and they're a scuba operator first and they built a short term rental business based on the idea of you're going to need some place to stay stay when you're here. Right. And we would love to offer you that place to stay. And by the way, the hotel's. Not that it matters and this is another conversation, another rabbit hole about pricing and short term rentals versus hotels but and the expectation that short term rentals should be cheaper. Not always the case. But uh, by the way, the hotels on our island are really expensive by the way, they haven't built a lot of, they've just recently opened some new hotels. But by the way hotel supply hasn't really grown in a major way in 20 years but housing supply has grown and we can build, we can build short term rentals. So I think that we can also think about flipping the funnel and say what's the point of this experience economy? Is it an upsell for your short term rental property or actually is your short term rental property the upsell on the experience booking?

Speaker B: Yeah, I think that's a great place. Adam, I want to tap you in there because I think Seth brings up something that we've never said before, which is exactly that last bit. Uh, I'm going here for this concert or I'm going here for this tea time. I'm going here for this unbelievable scuba experience in terms of. I imagine that's like a location thing, a, uh, water quality thing, all that kind of stuff. Sorry, I don't think about that. So not my world, but I would imagine, okay, there's these iconic destinations for. For scuba in terms of, like, ease of access, maybe all these kind of things. And then, yeah, it's like, I'll stay anywhere. I'm just there for the scuba. That's what I'm excited about. Sure. I want somewhere. We used to always talk about the three three Cs, like, clean, comfortable, convenient to my activity, to my experience. But ultimately, maybe you're not super picky about that. So, Adam, let me bring you in there, because what I was. I'll finish my thought and then I want to bring you in. It seems like we haven't executed that well, so everyone will say it again. Going back to our earlier commentary. Yeah, let's go ahead. They're on vacation now. We're going to go ahead and upsell them on these things. And then I go look at my clients and they talk about upsells and they're like, yeah, they're there, but it doesn't seem to really be moving the needle. It seems to be like they're coming and they're spending and they're not doing it through the vacation rental manager. Most commonly in most situations. Of course, there's exceptions, but that's kind of what I see. So, Adam, what are your thoughts about all that kind of problems wrapped up in one in terms of like flipping the funnel? Experiences, then lodging after. Are we as lodging providers doing a good job of telling them what experiences are out there and then selling that to them, merchandising that to them? How do we. How do we get our share of the pie, if you will, to kind of help in that profit struggle that you mentioned a few minutes ago as well?

Speaker C: I'm right there with Seth and Skiff. To think that this is a huge opportunity, and when you put numbers attached to it, especially in the trillions, clearly there's a big opportunity there. However, I think that this is also similar to our standards discussion that we've had over the last few episodes. While intuitively, we all recognize there's a need for standards in the vacation rental industry, similar. We all recognize that there's this big opportunity and guests want to have great experiences, except we don't execute it well. The same thing as standards. And I think that we've talked about this for years, and Airbnb has seen this. They've tried this multiple times. It didn't work the first time. They're coming at it a second time. We'll see whether or not it works. The other experience, companies that we talk about tend to be in large urban settings that have airports and a lot of tourists that have come to those areas. So as you start to break this apart, we quickly see how this falls apart. One, because the infrastructure isn't there. Two, because I would agree with Seth that I don't think it's on one end or the other. I actually think this is more of a loop. I think it's a guest acquisition opportunity because we have the opportunity to talk about all the great things that are in our area, and then we also have the opportunity to upsell guests that we have to do all these great things that are in the area. So I think that there is a loop that we could think about. However, it's not a loop that is new. This is a loop that's been going on for a very long time. When I started in the industry back in 2008, I was director of marketing for a company here on the Outer Banks. We managed about 350 homes. We started something called Club Seaside for this very idea. We went out and we partnered with local companies and we would offer some sort of free idea, uh, free activity for guests to take small number. But it was our guest acquisition. Hey, look, here's what the Outer Banks has to offer. Here's your opportunity. If you sign up quickly, that you can get it for free. And then you also have a discount if you were to go off. Wild horses, surfing, kayaking, all the things you would expect to do on the Outer Banks. And it was popular. But then I also think that on the execution side, and especially in these other markets that are not urban, with large infrastructure, large tourist groups, you get the operators who actually can't execute at the scale that we think we want them to. So we, as the vacation rental managers, think, oh, all our guests want to do this. All of our local vendors want this. The reality is that match doesn't always happen. There's only so many great chefs that can be shipped off to the homes. There's the grocery delivery is a great example. Again, Airbnb has tried it. It's been done so many times across all the different vacation rental markets. Now, why hasn't it been taken? I agree with Seth that these guests are coming and spending this money. I think the bigger issue is that we do a very poor job of explaining what the Opportunities are and then delivering that opportunity to buy that at the right time in a really seamless way. So what I would argue, again, guest acquisition side, I would argue that this is more about a marketing and content opportunity, especially with AI search to get all of your local knowledge. And I've said this before as well, superpower of a, uh, vacation rental manager is their local knowledge. OTAs can't touch it. If you're an operator that has a market that has a lot to offer, could be a sports team, could be a concert venue, could be an Outer Banks with surfing and all the other things that are here, you need to be the one who's promoting those things to the general audience through video, through blog posts, through social media to help people understand that those are available. Once you do that, now you've got eyes coming to you. One from the beginning of the loop, oh, I want to go scuba diving. This company talks about it. Oh, wait, they also rent homes. Or the other way I rented a home. Oh, wait, I could do scuba diving while I'm there. I think that loop works both ways, but you've got to have the content and the local knowledge to execute it and potentially the partnerships. So this gets me to the sales side of it. I do think, just like the example of the scuba diving company, uh, in the Caribbean, I think that the local networks and the local providers are the best. People do this. I think that Airbnb getting enough local vendors on the Outer Banks to sign up for the services is such a pipe dream that'll never happen. I just don't even think that it's worth talking about. But the local operators, local managers can 100% do this. They can get the local partners, they can get the right discounts, they can get the right messaging, and then we've got to execute the delivery. And I think delivery. And I'm going to give a shout out because I think this is the one that does it. Because best. But I'm sure there's a number of do it. I think the host code does an amazing job of this. They created a landing page, an e commerce store for every property that you have in your inventory. Could be one, could be thousands. And now when that guest comes, they have a storefront that they get to go look at for all the upsells that could happen. There could be concert tickets, could be tours, could be chefs, could be whatever. But it's all unique to that home and that particular guest that they can reference time and again. And I think that's how this decision Making process will happen, but we've got to get enough great content and enough great local knowledge that is then delivering the opportunity to buy these at the right time that the guest wants to do it before they check in, before they do the search during their stay. However they want to do it. We need to deliver it really seamlessly. So I think the part that we're not executing well is one, sharing our local knowledge and helping people understand what's available. Two, delivering that opportunity to buy those things at the right time when the guest wants to do it.

Speaker A: And this is going to help this stuff to your point, Adam. And this is also going to help, I think increasingly with your discoverability too, because a lot of guests. I don't know the Outer Banks that well. What's like a. Is there a small town or village in the Outer Banks that like.

Speaker C: Uh, yeah, I live. So I live in Kill Devil Hills.

Speaker A: Kill Devil Hills?

Speaker C: Yeah.

Speaker A: I don't think that there's a lot of people searching for Kill Devil Hills vacation. There are probably a lot of people searching for all the things you've just talked about. Horseback riding, Outer Banks, relaxing outer Banks, good food, outer Banks. And how are you going to. This is another thing we're talking about is people are typing this into a chatbot or it's going to get more advanced than chatbot. It's going to move on to voice. It's going to move on, but people are typing this into AI hey, here's what I like and uh, I'm interested. Vacation. They probably won't even say Outer Banks. They'll probably just say on the east Coast. I'm looking for a beach vacation on the east coast for six people where I can do X, Y and Z. And how is Kill Devil and your property in particular going to get surfaced when that funnel starts that wide? Right. I think that's another huge differentiator of experiences is that if you are integrating with that sort of stuff, the second they put horseback riding in, boom m you're assuming others don't do the same. It's an arms race. But you get what uh, I'm saying by that.

Speaker B: Well, I think, I think, Seth, speaking on the SEO side of things, it's like it's having a rich profile of information about what it is that you offer, which I think is what we're both hitting on here. Which is if you have the best scuba dive property in the Caribbean, you, your website better give every variant of why it's good for scuba diving, like location, multiple captains or boats that we would accommodate. The thing that would make sense to me as, uh, someone that's never scuba dived before is I'm new, I'm scared, like I'm going to go down there and I'm going to die. Right. So give me the entry point version. Give me the maybe 10 foot dive or 5 foot dive. Just kind of get my feet wet, literally, uh, and figuratively with this versus, don't give me the 100 foot. This is really risky. But I'm sure that's what you're into because you've done this a hundred times. Just when these golf. If I do my golf course analogy, don't send the new golfer out on where I played a few weeks, a few months back at the Ocean course, where it's 7,000 yards and it's like that they're going to have miserable time right in my neighborhood.

Speaker A: Beth Page Black. Not for starters.

Speaker B: Yeah, exactly. So don't send a newbie out on that course. They're actually going to have a really bad time. So it's like there's multiple again, layers you have to dig into underneath. But you have to go out there and publish stuff about what you're describing, otherwise the AI search has no chance of finding you. If you just say, yeah, we're great at, uh, we have this great scuba dive option, but it's all done through text and there's not pages and proof, et cetera, of why this is a great scuba dive location, then you're going to have a really hard time to market and grow organically. But if you make 27 pages about everything about why this is the best scuba dive experience on the planet and why you need to do it, you're going to track some, like, stuff into your kind of awareness. At least you have a much better chance than if you don't have something on there. So I think that's like the missing gap that a lot of people are doing. They're not actually publishing enough, putting out enough about what it is that their experience actually is what their home actually is. And I'm curious your thoughts on this, Seth, and maybe you were about to get here. The idea of commodity versus a specialty, which I think is really what we've talked about a lot at length so far, because the commodity is. I go there and I could rent a kayak from 87 different kayak rental companies in the Outer Banks, or surf surfboard rental companies. So it's like, I'll just pick the cheapest one. They seem like they have decent reviews, uh, experiences I booked this particular scuba diving trip and my guide was Mark. And Mark was the best. He was kind, he was friendly, he was helpful. He was. He made me feel safe. It was an awesome experience. I would do it again. Like that's, I think another layer that we haven't fully explored. But I'm sure that's in everything you're talking about.

Speaker A: Yeah, Shout out. Living the dream. Divers and Grand Cayman, since we're talking about them so much, keep bringing them back up, but they are a great show. Anyways, maybe this will help their SEO. If we do a transcript.

Speaker B: Should we. Should I do a show link in the show notes? I could really help them out.

Speaker A: Yeah, sure, why not? It's just random, but why not? Adam, I was gonna. I think this maybe ties into your idea a bit of specialists versus general, maybe not. But I want to react to one other thing Adam said, which is that we're falling short on the execution. And I know so many short term rental listeners are. I actually don't know the demographics of show, but I'm gonna assume us based kind of domestic, at least classic vacation rental, short term rental destinations. And I don't want to be the obnoxious New Yorker who keeps pointing to these international locations. I'm sorry, being the coastal elitist here, I can tell I'm in the wrong crowd. But I would point to the example of uh, Iceland actually, which is this huge tourism success story. And Adam, you said it's really hard to execute. We really struggle here. We don't do a great job on this. Iceland, how with has built. They are. I would say it's interesting. So there's a company called Bokken B O K U N and they got bought by TripAdvisor and they were this sort of tech vendor, e commerce platform behind a lot of tours and activities in Iceland. It plugged into Viator. It's one of. I don't know how the exact of how the integration went, but it's one of those acquisitions that really helped. And Viator is now a huge seller of tours and experiences. TripAdvisor had also made some stabs at short term rentals. There is overlap there. And they were based in Iceland because as this tourism economy boomed in Iceland, they were having all these issues that you're describing where they're not talking to each other, not really set up. They're a bunch of fishermen. It's cold half the year, it's snowing. What's going on? People are supposed to stay in Reykjavik, but instead they're driving around the ring road and they're booking homes and random fields on the western coast of Iceland. And they had all these issues and I will say maybe the, the that sort of. I guess they're not. They might balk at being called Scandinavian but I guess that northern European mindset made them easier for this stuff. But they really buckled down. They've digitized all this stuff. They have digital inventory, they've created all these platforms, they built their own tech suite that was so good it got sold to Viator. So I would just say that these things are possible. It is possible to create a community of excellence and excellent local operators, local short term rentals, local vacation renters and hotels and operators and all this stuff to the point where people can fly into Reykjavik, rent a car, drive around, stay in short term rentals, do these experiences and pretty much book it all online and feel comfortable. They're going to have a great trip. And so again, I'm not trying to tell a bunch of people in the Outer Banks to be more like Iceland, like what a coastal elitist asshole. But I would say these things can and have been done and when they're done, it's just such a powerful driver of uh, I don't mean to over focus on experiencing such a powerful driver of short term rental bookings. Yes, it can be done. These communities can come together and create real digital marketing operational excellence by working together. It sounds like such this cliche business school, stakeholders coming together. It really can happen. It really does work.

Speaker B: Yeah, it's something. And I know we're almost the time here and we gotta get one more question out of it before we depart south, but it's almost something that I think the chambers probably underdo and I've talked about this before with people on my team. It seems like the chambers just want to run very broad ads. Hey, we're going to come and visit. Like where I'm based in the North Myrtle beach area, we have a massive chamber budget from Myrtle beach to get people to come here. And the ads are basically like Myrtle beach is for you. If you like the beach and if you like this and if you like that, that's fine. I'm not saying those things don't work or some degree, but it's like if you get, you know what really moved the needle when they started having the country music concert here in the summer. That was a huge needle mover. Why? Because people come and see these tier one country music stars. I'm not a huge country music fan, but if you love country Music, then it is the place to be. Like, the quality of the star power, if you will, that they get for this country music festival is massive. So it drives huge demand, huge revenue, all that kind of stuff. So it's. I feel like that's a much better job for the chambers to be focused on is like, why do we get people interested? And then the rest kind of sorts itself out to some degree. They'll find somewhere to stay because they'll want to stay. Because there are six people experience here, which is kind of what we talked about a lot during this whole time. Seth. I know we're at a time. I'm at time on my side, so I do have the jet. Seth, a guest of referral. Anyone you think would be a good chat for us here at the show before we kind of come to a close here?

Speaker A: I think it's disqualified. But I am a huge fan of Jamie Lane. Jamie Lane, chief economist of Air DNA. I think he's great. I. I have to. A bit of. What is it? Favoritism. I have to plug another skiffed podcast about short term rentals. I don't know if it's competitor for, you know, but the good morning hospitality folks, if you haven't talked with Michael golden or Will Slickers or any of those folks, uh, they're a good time and I think they're worth talking to as well.

Speaker B: Yeah, it's like an Avengers theme. We got to get going.

Speaker A: That's right. Yeah.

Speaker B: It's a good thing. We're better together. Yeah.

Speaker A: The skift cinematic universe. Yeah. The short term rental. Short term rental. The short term rental, podcast. Cinematic universe. That's broader. We won't. We'll unbrand it a little bit, but. Yeah, that's right. I think they're worth chatting to. Those folks are great and I always enjoy listening to them talk. And they are. They're real operators as well. Whereas I'm the researcher. We've talked about trends, we've talked about consumer backwards. Those guys can really get into the weeds in a way that your audience might enjoy. I love it.

Speaker B: Awesome. Seth, one more thing the listener has to do before they depart. Go, leave us a review. Go to your podcast app of choice, itunes, Spotify. Get the most Downloads there. Click 5 stars. There's no way in heck we're going to convince more skiff people to come on if they don't see a ton of downloads, ton of reviews. But we thank Seth a ton for his time and attention for recording this here today. And we'll catch you in the next episode. Hope you have an awesome rest of your day. Thanks, everybody.