James Asquith has set the Guinness World Record for being the youngest person to travel to all 196 countries in the world by the age of 25. In this episode of AHIC Talks, he speaks with Jonathan Worsley about how he came across the idea for Holiday Swap and what his future plans are.
Holiday Swap is an award-winning home exchange platform. It has been designed for travellers to securely swap and host their homes across 185 countries for just $1 per person, per night. With their subscription plans, travellers can save even more and benefit from unlimited swaps, instantly messaging unmatched users and bringing one guest for free.
Welcome to AHIC talks, the podcast for the Arabian and African Hospitality Investment Conference, which is the annual gathering of the hospitality and investment community in the Middle East and African Region. Every week, our team at AHIC shares a conversation that we've had with industry leaders and innovators in the hospitality and investment community. We really believe you will find this insightful. So let's dive into this week's episode.
Jonathon Worsley: So welcome to another episode of AHIC talks, the podcast for the Arabian African Hospitality Investment Conference. My name is Jonathan Worsley and I'm here today with James Asquith who is the founder and chief executive of Holiday Swap, winner of the Best New App award in 185 countries. James, is that correct, you're in 185 countries now?
James Asquith: That is correct. Yeah. Thanks for the introduction. It's great to be chatting with you.
Jonathon Worsley: Well it's great to have you with us and I'm so looking forward to learning more about what you're doing and learning more about Holiday Swap. So James, tell us a little bit about yourself, because you're now 32 years old, how did you get involved in the hospitality industry?
James Asquith: The foundations and origins of it probably started 10 years ago. So my background is, I used to be in investment banking, I studied economics and maths in London and it was miserably boring for me, but it was a necessary stepping stone to getting into the finance world, which everyone knows. So, I guess before I even thought about going into hospitality, the origins were early, it was building up a career I guess in finance. I used to be a bond trader at HSBC, Deutsche Bank, and then the Japanese bank, Sumitomo Mitsubishi. And I guess when I look back on when I started Holiday Swap, the origins came way before. I always wanted to have a company in something in travel. And myself personally, I visited 196 countries, and I got a Guinness World Record for being the youngest person to do so. And so I've always been taught by people I worked around saying, why don't you go have something in travel, because you have this platform. And I guess this name is what the press seemed to call the most travelled person in the world, to be able to kind of do that and leverage off it. The problem I had is I didn't have the idea, certainly not the experience. And I think when I eventually took that leap, I had an idea on something in the sharing economy that I didn't really see a glass ceiling in terms of scalability. And I think that initially, when we kind of went out and made those initial partnerships, in particular investors in kind of the angel space, it was by having an 8-9 year career in banking, that I was able to leverage off that. There were certain days when I worked in finance where I was told to trade differently by management, and that I wasn't aggressive enough. But importantly, to me, the thing that was always important was relationships. I wanted to do things in a good way, in a high standing way. And so a lot of people I traded with and against, were actually our initial investors, because I didn't act like for lack of a better word. You can you can insert word there for how other people might act. But in that sense, I think that the reputation was what was able to kind of get us off the ground to start with.
Jonathon Worsley: When you say us, who is us?
James Asquith: Well, it's interesting, you said, I always kind of refer to it as us now because we've obviously grown to have 30 odd people on the team. It was just me, sole - founding it to start with, which was a very lonely place to be. But my CTO, Jackie was always the right hand man there with me before we even really founded the company. So I'd say that is more probably just a term that I say, just to not sound as lonely as it was. But in the medium and longer term, it certainly suited the company better that I was able to kind of scrape and cling on to the equity early on to allow us to have the flexibility to, I guess, fundraiser in a suitable way in the future.
Jonathon Worsley: And was there an inspiration that guided you and got you into Holiday Swaps?
James Asquith: It was actually on a trip with my friend when I was on gardening leave between banking jobs. I was in a place called Cluj-Napoca in Romania, I've never been. I've been to Romania but not to Transylvania, and it was voted the European Youth Capital, I think there's six colleges there, really young population. And everyone seems to particularly in Eastern Europe have this obsession with wanting to go to London. I grew up in London, I've long moved out of London now, but particularly in Europe, people have this obsession with the royalty and the history. So everyone wants to go there. And the same thing kept coming up and I was just having conversations with people and I was in this really friendly town of Cluj and they said I would love to go, but it's too expensive. And as I guess an unofficial ambassador of travel I meant to take a positive view. And then I said look, it's super cheap. I remember me and my friend when we went to Cluj we flew there on Wizz Air for 10 euros each, which is partly why we got to go there and I said look, it's so cheap. The flights, you can fly anywhere if you book in advance and do it well. The same thing kept coming up and everyone kept saying it's not the flights it's the accommodation. Even a shared hostel in Piccadilly Circus is $60 a night for shared dormitory. And I remember joking at that point and I said, well look, I want to come back to this town. So next time I'm here, you stay at my house in London. And it was on the flight back that I just kind of had, I guess, that lightbulb moment and thought, why don't we actually create a sharing economy platform that work?
Jonathon Worsley: But looking at these sharing platforms, I mean, there's a number of them out there already isn't there? You've got the homestay couchsurfing, love home swap. So how are you different to some of your competitors?
James Asquith: Well frankly, I don't think the others work. If I'm honest, no comments directly about any of the other. I mean, there's only really two that offer home exchange. One of them has already been acquired by major Hotel Group, what they're doing with them is not my point of concern, but I don't think they're doing very much with them. And the other one was kind of very well known as being over 60s. And mostly having dormant property. So I thought that let's build this up more for millennials, more for your college students, people with one-bedroom apartments, but we're trying to get on families, timeshares and quite frankly, it was kind of 3-4 years of digging in hard to be able to get now, which on a headline statement, we are bigger than them all. The next three combined, we're bigger than them all and we're cheaper than them all. A lot of them kind of, say 250 - 300 euros, and the thing that I saw at the start, and I genuinely didn't even look at the competition to start with, I just thought we can do this and we can do it well, and I don't really spend each day looking over my shoulder what the competition is doing. I think it's actually kind of unhealthy. And you see a lot of companies in crowded spaces, the anxiety, going to sleep in those spaces for founders will be tremendous for me. So it was a lot of work to be able to get there. And a lot of the previous competition when I did look at it would say, hey, pay X amount, which was multiple times what we charge for a year and with that, they had a caveat saying if you don't get an exchange in your first year, we'll give you another year for free. And I thought, how bad can the platform's really be that they're already telling the consumer at the point of purchase, that they might not get what they're paying for. And I thought, you know what, we need to do these differently. And so for the first couple of years, we didn't charge subscriptions, we didn't charge revenue, because home exchange isn't necessarily a new concept. It's been around since the 1960s. A lot of people, a lot of retirees used to use this pre-internet. And then the internet didn't really get digitalized and take off, because I think in the space, a lot of traditional business owners would turn around and think that the cost and the sunk cost of digitalizing it was too much. And certainly for us, there was a big sunk cost that came in both to start with for the first couple of years, determine not to charge revenue, because quite frankly, one person might search for Barcelona, one person might search for Lisbon, the next person might search for Sydney. And if you're active and busy in one region, but not another, people are just going to come onto the platform and leave it very quickly. So we needed to build up into over 100 countries before we even started considering revenue. So it was done very differently. And it was done in a way that a lot of -- when I had initial discussions with VCs would turn around and their initial questions are what's your revenue going to be? I said, look, this platform doesn't work if you try and say, let's charge 100 euros and try and pay 99 euros to acquire more users and grow it. It just doesn't work like that until you have a significant sized platform and moat, should we say.
Jonathon Worsley: Okay, so on the swapping side, do you need to have a direct swap with the other family or the other person? Or can you build up credits as well?
James Asquith: Yeah both, and we wanted to keep it that it doesn't really close anyone off. People come first and come and subscribe onto the platform $60 a year or $120 is the highest one, but that also includes insurance and cancellation protection and even COVID protection now to the end of next year. So we've been busy with that, with insurance companies, but it adds an extra layer of security as stuff gets broken, etc. in your home. So there is a core of subscribing, which is unlimited swaps and hosts. Then the other one is pay to play which is the dollar a night per person. So we didn't want to just say you have to come and subscribe. And then more importantly, the mechanics are the core is directly yes, user A swaps with user B. Exchange is kind of like for like, whatever matches up on the same date. Or you can swap A to B, but on different dates. Say I'm not going to be at my place come stay here, I'll agree to stay with you these days in the future. Or the third way is the hosting, as I said, and that's liquidity in the property market, which is the best way to look at what we do at Holiday Swap. You might come and stay with me I might say I don't want to stay at yours. I might have already found someone else to stay with, so third party swaps essentially. By giving up your place you get a place and you can get credits you can use them then, in the future. So it basically all depends, it is a sharing economy platform and the bigger that it keeps growing, the easier that that kind of mechanics keeps getting.
Jonathon Worsley: How do you value the points based on quality of accommodation you're staying at?
James Asquith: We don't, it's all user based. And that's why I guess some people in the press have called us the Travel Tinder, it's up to you who you match with instead of someone's face you're kind of matching up with someone's property instead. If you're paying a load for rent $3,000 - $4,000 a month for a one bed studio in New York City, you might think hey, I can go and get a three bedroom apartment in Rio de Janeiro for that. It's up to you what you think the like the like value of your property is and who you're happy and comfortable to exchange with.
Jonathon Worsley: So the ratings are quite important on this aren't they? As they are on all these exchange systems, but you've got to rely on the trust of those. And I noticed on your website, you have a chat facility, I don't know if it's a video facility as well.
James Asquith: No, it's not video yet. It's something we're looking into. But all technical logistics of it, the app is already absolutely huge. So that would just be probably a technical problem that we'll have to overcome, we might do that as a separate app, but we obviously want to keep everything in one place. But the chat facility allows people to kind of match up with each other. You're not obliged to have a swap with them, you can start chatting with them and think I don't want this person coming and staying at mine, etc. and unmatch and find someone else. But it's a it's a pretty decent feat. We worked with Google on this as well. So if you match up with someone in Japan, they can be speaking in Japanese, you can be speaking in English or Arabic, or whatever it is, automatically translate. So it is really trying to kind of home in on the community and the network side of things to make things easier.
Jonathon Worsley: Interesting. Just asking about the tech side of your platform, how is it different and how have you transformed in terms of tech with this product?
James Asquith: Firstly, it's huge. And I'm not the tech guru, I guess I'm more of the finance background side of it. So large part of this, if I'm honest, I probably tell you you'll understand, that when we first built this app, we were told that the size of the app on the back end is bigger than Tinder, TripAdvisor and Facebook combined. Purely because if you look at an app like Uber, you're selecting your city or location, and you're trying to find things, cars within that location. Same with a Tinder for example. Whereas with us, it's very much a case of you could set yourself and say, find me something that is a beach, near the beach globally. So the backend of what we're pulling in data-wise is absolutely huge. And it's not just the actual tech that's done that, it's probably a combination of the marketing of how we built that and built the properties around the world as well, which has taken a long time. But we've won a few awards for the tech and how the user interface work. At the end of the day, it is a C2C platform, which is quite different. There are very few of them out there. Again, even though it's a completely different sector, Tinder and dating apps are an example of a C2C platform, but they work on a low count rather than potentially globally which we can and do. But the main point is by building that C2C, it has taken a lot of user trust, it's taken two steps forward and 1.99 steps backwards to build that. And I think that that's kind of the main thing that sets us apart for sure.
Jonathon Worsley: Yeah, just looking at those hosts who are looking to generate income, looking at Airbnb hosts, for example, who are looking to generate income for having people stay at their place, obviously, this is not the platform for them. It is purely a platform for those who want to travel isn't it?
James Asquith: Exactly! And anyone that kind of says that to me and turns around and says Oh, but I could be earning X amount on my villa by putting it on Airbnb, I would just say you know what, go and put it on Airbnb then. The very big difference is if you look at Airbnb, they have 190 million users and I think about just 3 million hosts. Because it is a platform that is designed for people to make money and to host, and you get people using it professionally now, buying second, third, fourth homes, which is why they're under pressure largely because they do push rent prices up, they do push property prices up because people are doing that short term subletting game. Now, the majority of the users on Airbnb are the people that can't put their place on there, because they don't own their place. We are for everyone. We are kind of the iceberg under the water, rather than the tip of it, that people are saying, hey, look at my really nice apartment come and pay me $400 a night to stay here, or my house or whatever it might be. It's a money-making tool and they're very different and there's lots of competitors to Airbnb now. Because people think that they can do it better on a small scale, and something like them, they might build up in California, have a bunch of properties, be successful, then grow to other places. So it's very different from what we are, we have to have to be relevant everywhere. Because what you might look for is very different to what someone else might look for, rather than just saying, hey, let's send traffic to San Francisco and Los Angeles because that's where we have properties. And then when we fill them, we'll branch out to other places. So the very big difference is you think about people that are paying a lot in rent. And I always use the New York City example, who then go and see their friend in Boston or in Chicago, and their place is empty because they're not allowed to sublet. On Holiday Swap there's no money exchanged between users, everyone can use it, we really are for that. But even with that being said, people that do put their property on an Airbnb, we do still get people putting it on Holiday Swap as well. Because the difference is, you're not necessarily obliged on x dates like you would be on an Airbnb to have it vacant for someone to come and use it. And you do know who's genuinely coming around to stay at yours because you do chat to them even if it's really briefly before. So with that it's a case of someone might have it on there and then maybe randomly some awesome villa in Colombia in Cartagena might say hey, like you want to exchange, and they think yeah, you know what, I could do that in two months, three months, six months from now etc. So it's very much like a longer platform, the Airbnb's, the booking.com, the hotel websites of the world are very much these dates, this city, what's my best price for this star rating; whereas on our platform it's very much searching Chicago, New York or Paris and say, hey, I want to chat to five different people, I've got five different options that I know I can stay as and when I want to go there, it might be next month, it might be next year.
Jonathon Worsley: So you have now how many homes?
James Asquith: It's 180,000 and it's over just over a million users. So obviously, it's a different scale of bringing on the users to convert to have their homes on there. But until you use the full functionality of the platform, you need your home on there as well. So it's always a funnel process with a platform like ours.
Jonathon Worsley: Okay, so and you're in 185 countries, so you must spend the majority of your time right now trying to develop that inventory.
James; Exactly. That is it, from the very start. That was exactly what we've been trying to do. And as you can imagine trying to get to critical mass. That's why I think we're very defensible and most importantly, now scalable, is because, in a story of when we first launched the very first buggy version of the platform in very early 2018. I remember asking my parents, I said, hey, can you put your house on Holiday Swap? And they asked me, how many properties [inaudible 16:12] and I said three. And they turned around and said, well, what's the point of us putting our house up there? We're never going to get swapped. And I said, firstly, I really appreciate that support. That's very supportive. But secondly, and most importantly, it's a legitimate point. It really is and it was, and it's difficult if I handed someone a chunk of cash and say, go replicate what we do. The question is, where do you start? We didn't go slow, we went very fast, but it felt slow. Because it was that kind of getting people on there and almost pass off the message saying, you probably won't get on, that's why we can charge revenue to start with. You charge subscriptions rather and make revenue. You can't turn around and say to people, you're going to get something and promise them an extension, when they likely won't. You just got to say bear with us, be here as we grow the platform. So that was kind of where we were we built in the early days. Yes, it's kind of got us to this point now with a scalability, but the majority of where we spend our budget is on user acquisition. It can be anything and everything as long as we're kind of hitting our targets and our KPIs. I don't care if it's a billboard, in Times Square, or in digital ads, or people handing out leaflets on the street, as long as people more and more people are knowing about our platform, and we keep growing at the rate that we are and more than that, then it is something that we highly think is beneficial to everyone.
Jonathon Worsley: What is the most successful form of marketing for you at the moment? Is it social?
James Asquith: Yep. Always been social. I'm a numbers guy at the end of the day, you know, I get pitched every day different kind of advert strategies by people and more fancy things left, right and center. But it's certainly digital adverts, because we can really home in on exactly what we're looking to achieve from them and obviously, most importantly, track them.
Jonathon Worsley: Okay, and where are you on your journey at the moment? In terms of being a start-up, very successful to date, or you've raised your seed funding? Are you looking at a series A fundraise?
James Asquith: Yeah, I'd actually say we probably just closed off what we consider as a series A. Actually, very recently, over the last couple of days, just to open it up. We'll be looking at IPOing two to three years from now. I don't want to IPO too early, I think that people are too keen and eager to ask when you IPOing thinking that that is kind of the promised land. Honestly, there are a lot of companies that you see make the mistake of IPOing too early and for the wrong reasons. A lot do it, because they need the money, especially in the tech space. I'm very adamant about waiting for the right time to do that and there's lots more details I could explain, but I won't explain at this point as when I think the right time is. From that point, the realistic situation is that we keep our sunk costs low, we keep our core overheads low and the majority does deliver results because it goes into user acquisition. So the reality is, we're always really raising capital, as soon as we close one round, we put it to work, see where we can realistically lay the numbers and, and begin again. So we've almost started, a very smaller round opening up to more people with a minimum ticket size, but on a much more mass scale in the last few days. So we always obviously want that kind of injection of capital to keep pushing us more and more. And very much at the core of what we are, even though I've kind of thrown around a few names and talks about the Airbnb, Tinder’s etc. The actual model that we have really is more of a Netflix model, which is overtime. They took a few years to get good content on there. And a lot of people used to sign up for a free trial with an email address, use another email address, get another free month, until it got to the point where they reached this critical mass. They had enough good content and people are now more than happy to say, I don't even know how much Netflix cost a year, 100 bucks, whatever and say yeah, take my money because it works. And so those repeat subscribers, they're obviously now not paying to bring them on. They're automatically doing that for them. And so the very core of what we are is actually more similar to a Netflix rather than anything with the repeat subscribers as it becomes more and more beneficial to people. And that's where we really kind of start seeing, an exponential path towards what we want to IPO in the future.
Jonathon Worsley: Cool. And of course, you're building your data all the time in terms of your client. So of course, they may well be interested as well in participating with you. Which market at the moment, are you finding the most attractive for your product?
James Asquith: The US and then probably-- I mean, the next biggest for us Latin America, it's been a little bit more sticky over the last 12 months with the pandemic. So after that, I would say Australia and New Zealand has been very beneficial to us. The UK has been pretty strong recently. We've kind of been moving around and shuffling where we've been pushing based on restrictions, etc. But the difference, as I said is, there's a longer runway between someone coming on our platform and saying, hey -- they don't turn up and say, these days, this place, I want to book it. It's more a case of they're already pre-planning for the future. If someone turns around to me and says, I want to go to New York City next weekend, should I use Holiday Swap, I'd likely turn around and say that's not enough time, you need to be kind of finding the place, speaking to the places and having a little bit longer runway. So in some ways, it's a benefit to us during the pandemic. And I think the macro environment now, where a lot of people are really looking to save on costs and money, but there's this pent up travel demand that has suited us quite well.
Jonathon Worsley: Well that's certainly a good way to utilize your home, isn't it?
James Asquith: Absolutely.
Jonathon Worsley: To maximum effect. So James now, I've been thoroughly enjoying this and learning about this new business model of yours, which sounds absolutely fantastic. But where are you calling in from right now?
James Asquith: I'm actually in Greece at the moment. So I'm in Greece for the next week. It's all kind of the logistics of getting back to the UK because I've been in Dubai for work for the last four weeks. So it's always waitlist country stuff, so I'm stopping through Greece on the way to the UK. And then it will be back to Dubai, then Washington DC. It always moves around very, very quickly. I found out just literally a week ago last minute that I had a meeting and I have to fly out to Ghana from Dubai. So it's always very last minute with where I go.
Jonathon Worsley: So lots of one way tickets everywhere.
James Asquith: Always normally one way tickets.
Jonathon Worsley: That's great, because I think the last time we spoke actually was when we were both in Dubai. But you went to Greece and I went to Portugal.
James Asquith: Yeah, I went to Portugal.
Jonathon Worsley: Oh great.
James Asquith: You got out just in time, didn't you?
Jonathon Worsley: Got out just in time but yeah, wonderful experience. Had some good meetings and learned how to surf as well at the same time so you know...
James Asquith: Something I never -- My balance is awful. It's a comedy show. If you see me on skis or surfboards it's a comedy show, so I try to avoid that.
Jonathon Worsley: Great. Well listen James it has been absolute delight having you on our AHIC Talks. We look very much forward to having you with us at AHIC in September from the 20th -22nd learning more about how you're getting on and best wishes and congratulations really exciting what you're doing.
James Asquith: Jonathan, it is an absolute pleasure chatting to you. Thanks for having me.
Thank you for listening to AHIC Talks, the podcast for the Arabian and African Hospitality Investment Conference. You can find a full transcript of this podcast on the content library on ahic.com, along with other reports and insights. We can't wait to welcome you and your colleagues live and in-person AHIC in Dubai from the 20th - 22nd of September 2021. If you haven't registered yet, go to ahic.com to purchase your pass today and save on the early bird rate. Feel free to email us with any questions at firstname.lastname@example.org. Until next week, stay safe and keep well. Bye!
Published 16 June 2021