Investors on rethinking hospitality and real estate and the rise of digital nomads

Asked by Phocuswright managing director Pete Comeau to imagine 10 years from now how they would complete the phrase, “Wow, the pandemic has provided fertile ground for…”, Chris Hemmeter, managing partner of Thayer Ventures, a fund focused on travel and hospitality, said, “I think the old days of thinking of accommodation, real estate only as a hotel model, are over. I think multifamily is becoming a hybrid asset class, and I think there will be others, including single family homes and luxury villas. I think the whole world of hospitality, real estate and the monetization of hotel real estate is going to be the biggest fundamental shift – occurring before the pandemic but accelerated by the pandemic.

Oliver Rippel, director of Asia Partners, a growth capital firm focused on technology investments in Southeast Asia, said the trend of digital nomads will be huge – shifting from short-term trips to trips for “s ‘temporarily install in a new location’.

“We are already seeing this with our contractors,” he said. “It’s a lot less to hit three countries in 24 hours but to be co-located with the team on the ground for sometimes weeks or even months. What does this mean in terms of accommodation, how do I plan and structure my trip, where to stay, what kind of services do I need – where am I almost like becoming a resident for a few weeks or a few month. I think we’ve barely scratched the surface [this trend].”

Speaking on the Bridge Series event’s theme, “The Great Talent Crunch,” Hemmeter noted that hospitality was where the crunch was felt the most and that would drive the industry to seek innovation. technology and business model innovation. “This really desperate need to revamp the model so that it’s less dependent on labour, at least for the workforce that isn’t in contact with customers.”

Clearly, he thinks now is the perfect time to work in the hospitality and travel productivity software industry. That’s why Thayer invested in Optii Solutions, a startup that uses predictive technology to optimize hotel operations. Hemmeter said the pandemic has resulted in a willingness among hotels to experiment and test, and “that has allowed good software companies to bite the apple.”

Rippel, whose fund is invested in RedDoorz, calls it a “new-age hospitality business,” combining a SaaS model and a marketplace. “You’re not just providing the technology, but you’re also helping the hotel leverage that technology to optimize demand and ultimately revenue and profit generation. We find that interesting. It’s not just a bare bones solution, just scanning for scanning’s sake; it’s really about saying, “Hey, we can do things better and we can do things more efficiently at the same time. »

Hemmeter observed that the home delivery model hasn’t changed much since the 1950s. . And no one bothered to change that because RevPar successfully grew at a rate that outpaced the growth in labor cost.

“Now we are suddenly so disturbed…that the pattern has to change. Otherwise, the big elephant in the room, which, by the way, are the owners of the real estate, will start kicking the management companies left, right and center and try to figure out how to do it themselves , because at some point they have to monetize their real estate.

Regarding the tech talent crisis in Southeast Asia, Rippel said that while Singapore remains the commercial capital of tech startups, the pandemic has created a shift in the talent “chessboard” – working from home and working remotely. distance have allowed companies to focus on Southeast Asia. to complement their technical teams with talent from India, China, Vietnam and Indonesia, to name a few places. “Overall, the trajectory is positive,” he said.

The United States is also facing “the great developer drought” with startups competing with Amazon and Google, which can afford to pay huge salaries and benefits. On how his startups compete for talent, Hemmeter said, “Look, Google and Facebook can pay whatever they want, however much they want, that’s not a startup. Startup environments are different, fun and dynamic. And there’s fairness involved – people like skin in the game. And so good startups with velocity always manage to attract talent.

Asked if the sentiment is different in Southeast Asia with a younger generation that may still be attracted to global tech brands, Rippel said the emergence of local and regional models such as Grab” and more to come” has facilitated the task of young people. see themselves “as part of an emerging startup ecosystem” and “people are leaning more towards the startup ecosystem, away from the more established players”.

Regarding the opportunities they see in the travel space, Hemmeter said that Thayer, focusing exclusively on travel, technology and mobility, said the pandemic has created “an opportunity for large private companies that had experienced some resilience during the pandemic and had strong tailwinds to get out of there, go on the offensive, seize the moment and go out and win.”

Working on this thesis, Thayer found Inspirato, a membership-based luxury vacation rental club, which he took public through SPAC Thayer Ventures Acquisition Corp in February 2022. “Luxury traveler is a very interesting category , super strong and resilient. It’s a supply-driven story, there’s this Velvet Rope subscription process where you have to be inside the Velvet Rope to access the supply. So it has this fundamental flywheel effect, which gives it a competitive edge globally.

Asked about Asia Partners’ appetite for travel, Rippel said, “We have a huge appetite for travel that can be satisfied through RedDoorz. We believe that regional expansion as well as other brands in the market offer huge opportunities…

“Having said that, travel is one of the big sub-sectors that has tech and tech companies, and budget hospitality is just one of those use cases in travel, so finally we’re open. “

He thinks destinations such as Thailand, Vietnam and the Philippines will shine again from an inbound perspective. “There’s no doubt about it, in my mind.”

Watch the full video of the conversation below.

Through the Lens of Investors – The Bridge Series Ep 1: The Great Talent Crunch

* This article was originally published on WIT.

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