Phocuswire: HostGPO Creates A Buying Community For Rental Hosts

What is your 30-second pitch to investors? 
HostGPO is the first international group purchasing organization (GPO) for the short-term rental industry. We help our members save time and money by offering access to exclusive deals on furniture, supplies and more from the best vendors. We have harnessed the collective buying power of our group to negotiate the guaranteed best deals for our industry with a curated group of select vendor partners whose products are ideal for short-term rentals. Our partners include community favorites like Standard Textile, RugsUSA, and Public Goods.

While we are certainly a “procurement and supply chain management solution,” we are first and foremost a community built by hosts for hosts. We work to combine and share the collective knowledge and purchasing insights of thousands of hosts into one source. Our goal is to make our members’ businesses better by streamlining ordering, lowering costs, and helping to deliver five-star experiences to guests by providing better products.

Describe both the business and technology aspects of your startup.
HostGPO is an industry specific group purchasing organization. After a free trial, members pay an annual membership fee to continue to access our HostGPO member portal. This portal grants access to our confidential deals and proprietary ordering solutions for short term rental hosts. Through our direct integrations with our vendor partners, we’re able to offer industry best rates and streamlined ordering to anyone with three or more vacation rental units.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
Strength
-Exclusive, industry best deals with the leading vendor partners in the space
-Ability to offer vacation rental specific benefits through products that are hospitality optimized
-Already over 150,000 vacation rental units as part of our “groupAbility” to harness the collective knowledge of our membership, implement their suggestions, and share our insights
-An all-star team of professionals who also have vacation rental industry expertise

Weakness
-Many users need to be educated on the benefits of joining the group, and on individual vendor options
-With the wide range of options needed to service a variety of members (from economy to luxury units, from 3 to 3,000+ units) we are still developing our full list of vendor partners
-Although we are currently in the U.S. and Canada, our availability for all vendors to ship to all locations is limited

Opportunities
-Further development of our integrated ordering technologies
-Ability to increase both vendor offerings and geographic offerings
-Threats
-Market volatility in travel and short-term rental industry
-Conglomerates and low-quality online knock-off vendors capturing market share by sacrificing product quality for bargain basement pricing

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
On the host side, we are trying to eliminate scouring retail stores for linens and towels, no more waiting for online Black Friday deals, no more haggling for bulk discounts with your local mattress store. On the industry side, we are trying to reduce the number of times a guest shows up to a house and feels the pictures don’t accurately reflect the unit itself. If we are able to elevate the collective quality of all vacation rental units, we can help bolster overall demand for vacation rentals as compared to alternatives.

So you've got the product, now how will you get lots of customers?
The majority of our sign ups so far have come from member referrals. This has allowed us to grow organically and build what has become a true community. Becoming a trusted name in the industry was one of our core principles in starting this company. With that trust, our members know that our recommendations are not made lightly as our partners have been heavily vetted and our deals were heavily negotiated. And winning VRMA/Phocuswright Battleground Innovator of the Year and People’s Choice awards for 2021 helped too.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.
HostGPO was born out of necessity. Any vacation rental operator who has attempted to scale knows the pains of having to source and procure goods and services. The addressable market conceivably includes every professional vacation rental operator, business or individual, operating three or more vacation rental units.

How and when will you make money?
Our business model is centered on continuing to grow to a massive amount of members paying extremely low membership fees. As we grow, we anticipate the need to continue to invest capital into our infrastructure will diminish and we can focus our efforts on developing new vendor partnerships in additional categories.

What are the backgrounds and previous achievements of the founding team?
The founding HostGPO team were Princeton, Harvard and Columbia graduates who had backgrounds and graduate degrees in technology, law, and business. This educational backdrop, mixed with decades of collective experience in real estate, interior design, and vacation rentals were the perfect ingredients to develop and launch HostGPO.

How have you addressed diversity and inclusion within your business?
Even though we are still a small (but growing) company, diversity and inclusion are core values at HostGPO. We are comprised of over 50% female and gender non-conforming people. As a fully remote company, we have been able to hire individuals from diverse backgrounds and geographic locations.

What's been the most difficult part of founding the business so far?
We launched HostGPO one month before the COVID pandemic. Enduring through the first months of our startup, when the travel industry was reeling and many were losing their vacation rental properties, was extremely challenging.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of the lucky ones?
There is no question that HostGPO has the best deals and discounts on furniture, linens, amenities and the like - but more than that, we are first and foremost a community. As our group grows, our strength, knowledge and yes, even deals, continue to grow as well. Our secret sauce is our size and the belief that our members have in our collective mission.

A year from now, what state do you think your startup will be in?
We hope a year from now to have deployed our new ordering technologies, expanded to our next geographic territories and have expanded our vendor offering categories. We also hope to be able to offer additional member perks like stays in our HostGPO Houses, access to informative market research studies and entry into our industry conferences.

What is your end-game? (Going public, acquisition, growing and staying private, etc.)
Our end-game is simple, to keep helping short term rental hosts scale their businesses and to improve the overall state of the industry. Whether that means going public or staying private or anything in between - our goal is to do whatever we can to continue to help our member community in the most meaningful way we can.

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