If one were to pick an ideal year to launch a new hospitality business, 2020 would not have been it. The incredible hit to the sector from the global pandemic is both familiar and well documented.
But as Nico Barawid, co-founder and CEO of Mexico-based property-sharing platform Casai told Karen Webster recently, markets are sometimes funny places in terms of the “right time” to launch something. As it turns out, a firm can be created to solve one problem only to find it’s solved a very different problem once it’s gotten to market.
Such has been the experience at Casai, a Latin American hospitality brand that recently launched and completed a Series A funding round.
Casai was originally founded as a response to a problem Barawid ran into at his last job as part of a startup executive team while travelling internationally and finding appropriate lodging. He found plenty of big hotels in downtown business districts, but those were expensive, so Barawid often stayed in Airbnbs — and those varied in quality.
“I once booked an Airbnb in Bangkok and when my CEO and I showed up, there was no WiFi,” Barawid said. “And so I became obsessed with finding a better way to travel.”
The endpoint of that obsession was the creation of Casai, a technology-centered hospitality brand committed to offering smart, delightful living spaces for travelers looking for either short visits or long-term stays. And that’s what they started building 18 months ago with the “nomadic generation in mind.”
But Barawid said that what Casai came up with ended up “feeling even more relevant” given the pandemic, despite the fact that everyone on Earth has gotten significantly less nomadic.
“As it turns out, a lot of the trends that we’re seeing today are perfectly suited to our company,” he said. “In January and February, we were at a 100 percent occupancy. And now, in October, thankfully, we’re back to 80 percent occupancy because the product ended up being something unwittingly created for this environment. It represents a new way to travel.”
What The Next-Gen Traveler Needs
Travel as a segment hasn’t merely slowed down so much as it has shifted during the past six months in a series of fairly unique ways.
Consumers aren’t packing up and jetting off to exotic locales for a week or two before returning to business as usual at home. Meanwhile, businesses are increasingly realizing that a lot of out-of-town meetings once reserved for face-to-face interaction can actually be handled equally well by Zoom calls.
But that doesn’t mean people aren’t traveling at all. In fact, the data show they’re still venturing out, just staying closer to home when they do.
And with schools having gone virtual and workers shifted to teleworking, what has been observable is a push among consumers to seek temporary relocations or sunnier, more scenic locales to ride out the pandemic.
“I think the definition of leisure has shifted in our formulation,” Barawid said. “On the one hand, we have leisure for vacations. Then there are people that are tired of living in their city and just wanting to travel. And we also have leisure time that's family-related trips for people that haven't seen their family in Mexico City for a year and who are now coming here. So, it's almost like a ‘coming home’ kind of leisure. And increasingly, we're seeing a lot of our guests want to work from Mexico for a while.”
None of these groups are business travelers by definition. Yet given the otherwise uncertain environment, they’re looking for the quality assurance that generally goes along with lodgings pitched at business travelers.
Amid heightened safety concerns, the new leisure traveler is less willing to play Russian Roulette with Airbnb listings. They don’t want to worry about what amenities or level of sanitation they’ll find when they get there.
That’s why Casai’s standard offering for every property includes keyless check-in, high-speed WiFi, Google Home Chromecast-powered TVs and a series of other connected tech pieces. Customers can control all of that from a Casai app on their phones.
Navigating A Shifting Environment
Not surprisingly, the past half-year has seen a lot of shifting and pivoting for Casai.
Barawid said that in January in the pre-COVID world, about 90 percent of stays on the platform were for less than week. But during the pandemic’s deepest part, that dropped to 46 percent as the majority of stays became longer duration. Barawid said things have started to shift back as of October.
However, the bigger long-term shift is how much the pandemic has pushed Casai to develop what Barawid calls its “direct-to-consumer muscles.” Prior to COVID-19, nearly all the firm’s distribution was through traditional channels like Airbnb or Expedia.
“Our reliance on those channels was fine because we had 100 percent occupancy relying solely on those channels,” he said. “[But] when April and May hit, travel demand evaporated on those channels. Now 60 percent of our reservations come through our direct channel. And that’s why we’ve been able to outpace the performance of both.”
Those direct sales efforts have also helped Casai cast a wider net than it might have otherwise attempted. For instance, the firm has signed on a lot of local brands needing places to shoot commercials, renting out properties for that purpose while traditional film studios remain closed.
But as important as being wired into the change is, Casai’s real strength is in turning into what consumers consistently want — regardless of whether there’s a pandemic going on or not.
“Travelers want to live like a local but still want the comforts of a hotel,” Barawid said. “What we are trying to provide is that ‘best of both worlds’ experience that consumers have always wanted — and seem to expect even more in the pandemic environment.”