Guesty, an Israeli startup that offers a property management platform for the short-term rental and hospitality industry, raised $170 Million in a Series E funding round, led by the Apax Digital Funds, MSD Partners and Sixth Street Growth.
Guesty previously raised $50 million in a Series D round held in April 2021. To date, the company has raised upwards of $300 million. Good news for Israel Startup Nations whose firms have recently been laying off workers due to the continuing worldwide financial crisis.
The company says that it has tripled its valuation and doubled its revenues since the last raise. In 2021 and 2022, Guesty launched numerous new products, services and technology partnerships as part of its core platform – including advanced accounting tools, damage protection offerings and payment solutions tailored for property management of short-term rentals.
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Guesty anticipates $100 million in revenues within the next year.
Airbnb is killing the hotel industry. Statistics show that the competition from privately owned apartments and hotels – especially in regions where the economy is based on the tourism industry like beach areas in the summer – is cutting down on hotel reservations, especially advanced bookings. People who can do without the extras provided by a hotel, like a swimming pool and daily maid services, can wait until closer to their travel date to book a room since they have the Airbnb option.
And many travelers even prefer this option since private vacation rentals do not charge per person. So it is great for families. And they can also offer guests greater privacy and more secluded locations.
HotelTechReport cited studies that showed that in 2014 alone, in the ten US cities with the largest Airbnb market share, 1.3% fewer hotel nights were booked, resulting in a 1.5% loss in hotel revenue. Over the last five years, those losses have continued to add up. By one estimate, Airbnb is capturing 10-12% of travel demand in some of the world’s biggest all-year-round tourist destinations like New York City, Paris, and London.
A study from the U.S. Bureau of statistics also showed that in 2014 Airbnb reduced hotel profits by up to 3.7 percent. That year, Airbnb generated $41 of consumer surplus per room per night and 26 dollars of host surplus. And that was just 6 years after the company was founded. Also, in the 8 years since the competition from short-term rentals has only made things worse for the hotel industry. And Airbnb, of course, is not the only company offering a service to people offering short term rentals.
So competition really is good for the consumer. And the landlords have added advantages over hotels in that they do not generally need to pay for business licenses, added insurance, hire workers or even, in some cases, pay any taxes on their profits.
But the landlords do need help in many ways not provided by the brokers like Airbnb. They need cleaning services, insurance for their properties and much more. This is where Guesty comes into the picture.
Co-founded in 2013 by twin brothers Amiad and Koby Soto, Guesty offers the first property management platform for the short-term, vacation rental and hospitality industry. Serving everyone from hosts to hotel brands, customers utilize Guesty’s platform and solutions to centralize their reservations, guest communication, operational tasks, cleaning management and more across all the major booking OTA channels, including Airbnb, Vrbo, Booking.com, Tripadvisor, Expedia, Agoda, direct booking websites and more.
Customers use Guesty to centralize their reservations across all major booking channels, including Airbnb, Vrbo, Expedia and Booking.com. The platform automates and expedites guest communications, reviews, cleaning and other operational tasks, while also facilitating direct bookings, resource and revenue management, smooth payments systems, accounting and damage protection.
“Despite an exceptionally challenging fundraising climate, the funding Guesty has raised is a vote of confidence in the travel and short-term rental ecosystem, and an endorsement of our pioneering technology and position as the market leaders of the hospitality and property management software sector,” said Guesty’s Co-founder & CEO, Amiad Soto.
“As alternative accommodations surge in popularity” he added, “Guesty has come out a clear winner thanks to our commitment to prioritizing innovation and ability to help our customers become more successful. We thank our existing partners Apax – who are increasing their commitment to Guesty – and are excited to welcome aboard MSD Partners and Sixth Street, whose strong track records in our ecosystem make them ideal long-term partners. As we continue to expand globally and grow our market leadership, we look forward to providing hospitality managers with even more value in the coming months and years.”
Guesty explained that since the onset of the pandemic in early 2020, the short-term rental (STR) industry has grown exponentially, with travelers spending more than $200 billion on STR accommodations in 2021 alone. As the ways consumers choose to live, work, socialize and travel continue to shift, the lines between traditional hotels and rental accommodations have blurred. This trend has accelerated the need for versatile hospitality management technology as operators across the board adapt to new and elevated guest expectations.