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12 Million Euros Later, Hostmaker Arrives in Lisbon
6 May 2018
The local housing management company began operations in Lisbon after having raised about 12.5 million euros in investments. Hostmaker expects to be managing a thousand homes within three to four years.
Hostmaker, a local housing management company which had revenues of 12 million euros from its operations in four European countries, expanded to Portugal after raising an investment of 12.5 million euros. Already present in cities such as London, Rome and Barcelona, the startup managed to sign approximately 100 contracts in the Greater Lisbon area in less than three months. It was the “fastest growth of all the cities” in which Hostmaker is present, the company’s general director in Portugal, Inês Nobre, explained to the Observador.
Founded in 2014 by Nakul Sharma in London, the company offers homeowners who wish to rent their property a complete management service that goes beyond just cleaning, check-ins and maintenance: Hostmaker also defines pricing strategies, helps with interior design and offers personalised service to any guests. All the owners need to do is give them the keys to the property.
“Owners rely on us to manage their property, because of our experience, pricing, design work and service. Basically, they give us the keys and ask us to deliver their earnings at the end of the month. We have a management fee where we take 20% out of every thousand pounds [1,130 euros], but we also guarantee income. Some owners say they are hesitant to use the short- and medium-term lease model, and that they are more accustomed to long-term leases. In that case, we can offer them that possibility as well. It has no risk to them, and we can make money using long-term leases,” Mr Sharma told the Observador.
The executive also stated that the company sees Lisbon as a potential third global headquarters (the others are London and Barcelona) and that, therefore, Hostmaker plans to invest roughly 1 million pounds (about 1.1 million euros) in its business there over the next two to three years. Hostmaker is currently investing in technology in Lisbon. The company aims to quadruple its current team of 15 people by the end of the year, adding account managers, programmers, cleaners, and others.
Prices are calculated daily
Hostmaker calculates its prices on a daily basis, similar to what hotels and airlines do. The calculation is done using an algorithm and is supervised by a team that ensures that the technology, which was developed internally by Hostmaker, works well. “It is not completely automated, it’s always good to have human oversight in pricing,” Mr Sharma said, adding that the price list is distributed on platforms such as Airbnb and Booking.com.
As for guests, the founder of Hostmaker explained that they seek to ensure that they have a good experience not only thanks to the service but also the treatment that is given to the residences.
“We don’t just buy cheap furniture to put in houses; we make sure that the place is somewhere they will want to spend time in, “he said. “We don’t see anyone else thinking about interior design. We also always welcome guests in person: they are new to the city, they may not speak the language and may not know where to go, so having someone to meet them and make them feel comfortable is an important part of our service,” he said.
Most of the elements of Hostmaker’s operation are uniform from country to country. However, there are portions of the service that are quite personalised, such as the Welcome Pack, which contains products typical of each city or country, that Hostmaker gives every guest. In Lisbon, Hostmaker gives guests a package containing canned sardines, tuna pate, a packet of crackers, a bottle of muscatel and a pack of sardine-shaped chocolates. The Welcome Packs only have one thing in common: a card from the person receiving the guests.
Inês Nobre told the Observador that the main objective of these gestures is “to be part of the city,” said, helping tourists integrate into the local culture. “That’s why we offer things from the city, and we try to build our own recommendations using our local employees,” she explained. “We try to integrate ourselves into the culture of the city so that tourists can also feel that they are part of it, without just feeling like they are in a super touristy area.”
At the moment, the company’s main focus is to reach the same goal Nakul Sharma has for any market: “to manage a thousand houses within three to four years.” In Lisbon, Hostmaker expects to reach a total of two hundred contracts by the end of 2018. Globally, the company manages around 1,600 properties in 9 different cities and has revenues of more than 12 million euros.
An apartment for rent in Lisbon took Inês Nobre to Hostmaker and Hostmaker to Portugal
Hostmaker’s entry into Portugal and Lisbon is part of the company’s strategy to “be present in big capitals all over the world,” Nakul said. The start-up is already operating in Rome, Paris, Barcelona and Bangkok, so “it made sense to be in Lisbon,” the founder said, adding that he foresees “growth in demand for recreational and business travel” in the Portuguese capital.
The launch of the platform in Portugal occurred with the presence of Hostmaker at the Web Summit in 2017, which generated a lot of interest, helping the company achieve record growth in the city. After that, only a small amount was invested in advertising. According to Ms Nobre, besides two small advertising campaigns, most of the growth has been due to word of mouth.
Mr Sharma told the Observador that the company’s bets on new cities are very much due to Hostmaker’s “highly international” teams, which are spread across the different countries, telling the company “where to go.” “Some of our members say ‘Hey, there’s an opportunity in this market, why aren’t you considering Lisbon, Madrid or Florence?'” he said.
Lisbon was one of those cases: Inês Nobre worked for Hostmaker in Barcelona, in an office that had some Portuguese citizens, in addition to “more than 20 different nationalities.” The company realised that Lisbon, where they had already hired two software developers a couple of years before, had been the target of a lot of investment, both in the city and in real estate, as well as in creating an environment conducive to new businesses. According to the CEO, these factors, coupled with the already existing connection to the Portuguese capital through the company’s employees, led Hostmaker to decide to invest in Portugal.
“As we already had [Portuguese] collaborators, we thought it would be easier to enter a market that some of us already understood. This is usually the way we like to start in any of the markets we invest in,” Mr Sharma stated, adding that they choose to hire general managers in their markets because “they are the ones who help with regulations and also understand” the market.
The founder of Hostmaker appointed Inês Nobre to the post, whom he met when she was living in London. Curiously, Ms Nobre said, they met when the current Director-General of Hostmaker in Portugal, then living and working in England, was looking for someone to manage an apartment she had in Lisbon. There was no one around in Portugal at the time, but she met Hostmaker and spoke to Mr Sharma in London, who later contacted her about her apartment in Portugal. At the time, Hostmaker had a job vacancy in Barcelona, and Inês, who had no intention of leaving London, decided to take a risk. Just over a year and a half later, she is leading the company’s operations in Lisbon and Barcelona.
Original Story: Observador.pt – Gonçalo Caseiro
Translation: Richard Turner