Interview Transcript of T. J. Clark CEO TurnKey with Ronny
Ronny: Hello everybody. Thanks for tuning in. This morning I’m joined by T.J. Clark, Co-Founder and CEO of TurnKey Vacation Rentals. TJ, thanks for coming on the show.
T.J. Clark: Hey, Ronny. Thanks for having me.
Ronny: So if you haven’t heard of TurnKey, it’s a platform for homeowners. Basically, if you have a beach house, a ski cabin, or whatever great vacation rental property, you go to TurnKey for help with managing that short term rental. T.J. Clark:, why don’t you tell us a little bit more about how you guys do this
T.J. Clark: Well, that’s exactly right. There’s about 3.5 million homeowners in the U.S. that have a second home that they actively rent out as a vacation rental. And the typical profile of an owner who works in our service is somebody that might have a lake home. They like to use it personally some parts of the year and then when it’s empty, they would like to rent it and make more money on that property and not really do it themselves. And so that’s a big audience out there in the U.S. About half of the people that own vacation rentals take the approach of having someone help them do it right now. A property manager, if you will. And then the other half have gone on to AirBnB or HomeAway and created a listing on their own and they are trying to manage this process on their own which can be time-consuming and somewhat difficult if you live remotely and so they look for some assistance and so we work both sides of that equation in this market.
Ronny: Right, so, elaborate there because, oddly enough, I think that is the number one question I have and probably my listeners have is how is this different from Airbnb, the other big player, VRBO.
T.J. Clark: Sure. Well, we are very impressed with the progress and innovation that has been made with the VRBO and Home Away which are now part of Expedia, and Airbnb. And it’s become quite easy to go find vacation rentals on these sites. There’s lots of them and it’s easy to find them in various cities, get the right size, and you know, you think about the group that you’re travelling with, which if very typical for a vacation rental and we think that there was really a lack of innovation on everything that happens after you do the booking part and a lack of innovation about which vacation rental is the right one for you, meaning which one is going to be convenient and reliable and this is where a lot of the stress comes in for the guests who are trying to pick the right one so it’s got to be a sure fire success for your vacation. And that’s what has inspired us to come up with a technology-driven platform that would manage the home for the homeowner using a much more efficient and mobile-based service that delivers the guest convenience and reliability. For homeowners, we’re really trying to help them make more money than they could make on their own or with their property managers that used to charge about 30 to 50% of your revenues as their commissions. We charge about half that amount and want to have that homeowner have peace of mind so that they feel like their home is well taken care of and they don’t have to worry about it. And we’re helping that homeowner get more time back so that they can do other things with their interests or maybe their profession.
Ronny: Great and so I’m looking over the website and it looks like a lot of the popular destinations are within the U.S. I see where, where did I see this, Panama City on there. Are you guys mostly focused on the U.S. right now or are you worldwide….
T.J. Clark: That’s right. Our first order of business is to get to a hundred U. S. markets. We’re in, we’re going to be in 55 markets this year. We are going into locations that are a combination of metro like Nashville and Austin, beach towns like Fort Lauderdale, and Santa Barbara and ski destinations, you know, Colorado and California Sierras and so we want to grow to a hundred U.S. markets. We want to have at least 150 rentals in each market that would put us at 15,000 rentals in the U.S. That would make us twice as large as the largest U.S. vacation rental manager which is Wyndham which has about 7,000 properties in the U.S. More so, we want to emerge as a brand that we feel like, you know, when you go through those listings at Home Away or Airbnb there is no Hilton-Hyatt-Marriott, if you will. There is no aspirational brand like a W Hotel, you know and people are excited about that. They know what it means, and that’s not happened in the vacation rental space. We would like to emerge as that brand that means convenience and reliability for the guest and it feels to us like a lot of the major hotels have left a bit of a vacuum here in a very popular and fast-growing travel category in the U.S.
Ronny: That’s definitely a worthy goal to be working toward. planting your flag across the U.S. It looks like you have momentum, TurnKey just doubled its funding with 21 million dollars Series C round by Adams Street Partners and some others participating. Can you tell us, first of all, congratulations, and second of all can you tell us some background on how the funding came about and some of your plans for it?
T.J. Clark: Sure, we don’t necessarily think funding is a measure of success. There are a lot of companies that have raised a lot of money that didn’t get there.
T.J. Clark: We like to think about it the other way around of making hopefully recognizable business traction in our category. We just capped off our third full year of business operations. We grew to about 1800 rentals in 32 markets. We became the third largest U.S. vacation property manager in our third year. And we expect to double our business again this year and hopefully again the following year. So it was, I think, that demonstrated growth that facilitated our fundraising with a great new partner, Adam Street Partners which is based out of Chicago. They are a very well established firm. We’ve looked to them really as partners to help us bring expertise to the table on the next phase which is getting to this “100 markets” and a couple more years of very significant revenue growth. And so, we think just getting the funding is not the indicator but trying to do the progress and having a shared vision with a right partner like Adam Street is sort of how you bring this funding event together which we are very excited about to be able to have the black powder to propel the business to become this first recognized and aspirational travel brand in the vacation rental space.
Ronny: Absolutely. And as sort of a last question, you know you’ve been in this vacation rental space obviously have huge momentum and you’ve been seeing the changes I’m sure better than anybody. For me it looks like things are almost starting to mature, especially a service like TurnKey is, you know, customers are finding a need for it. Do you see that? Or what other big developments do you see happening in the hospitality and travel industry? What are some things that are exciting to you about the next few years?
T.J. Clark: Sure. The vacation rental segment, I guess the term du jour is “a private accommodation” meaning when you go on a trip, you’re renting a whole home, not a shared home. You’re renting like an entire flat or an entire stand alone home and that category is the fastest growing category in travel. And Phocuswright did a recent study that in 2010, one in ten U.S. travelers had used a private accommodation for their vacation. As of last year, that number grew to one in three. They said it’s the fastest growing trend, and most pronounced trend they’ve ever measured in travel. So what’s really exciting is that guests or travelers love this option. There’s so many things that are better about getting a private accommodation than using a hotel. That’s what’s attracting them. It’s a unique experience in a unique neighborhood where often you don’t have a hotel. You get more room, you have a kitchen, you can travel with your friends. These things are great. What has not been great and has been more challenging is the unpredictability and the lack of a hotel-like standardization of your arrival, your pre-arrival messaging, how are you going to get in … do you need to meet at a key café. We use digital locks on every property so you can go straight in. We use a tablet inside every home if you need help, it has the house guide. We’re really trying to make the technology make this home a more hotel-like reliable experience and you get the great benefit of being in a unique private home. That’s what’s so exciting and travelers seem to love it.
Ronny: That’s huge, it’s going to be interesting to watch this phase develop over the next five to ten years. Thank you T.J. Clark: so much for coming and sharing your perspective.
T.J. Clark: Thanks Ronny, I appreciate it very much. Have a great week.
Okay, take care.