Hotel Tech Insider

SPEAKER_02:
We've built a lot of technology that is both hard-coded, but also a lot of like no-tech tech, you know, or low-tech.

SPEAKER_00:
From Hotel Tech Report, it's Hotel Tech Insider, a show about the future of hotels and the technology that powers them.

SPEAKER_01:
Today on the show, we have Julian Troutman, the co-founder of Berlin-based Raus, that's raised $8.5 million to build a platform offering cabins for nature-based stays. While most wouldn't associate technology with a nature-based stays travel platform where people are looking to get away from their phones and devices in the digital world, Julian and his team believe that technology should be something omnipresent, but invisible to the guests. Julian, thanks so much for coming on the show today.

SPEAKER_02:
Thanks so much for having me.

SPEAKER_01:
It's a pleasure. All right. So I have to start the conversation. You started a hotel company in 2020. What were you thinking?

SPEAKER_02:
I'm asking myself the same question to give you kind of how this all came together. I've spent most of my career at Airbnb, actually, where I was working on communication and brand marketing across Europe for over six years. And then I left the company in 2019. So shortly before the IPO, but also before pandemic time, you know. I actually joined a company digitizing long-haul travel, so safari trips and diving in the Galapagos Islands, these types of trips, and it was going great, and then COVID hit. And obviously, as for many others, it really pulled the brake for that type of business, and the global travel ban is probably the worst that can happen to a company selling global trips. And that made me really think, you know, like the big shifts that are coming to travel and how the pandemic is really impacting the way people are like looking for experiences when they travel. And that led to founding Raus basically providing people with very seamless and beautiful access to remote locations and nature without sacrificing comforts and amenities of what you would expect from a nice hotel. Yeah, and that's basically kind of what we do and have been doing with Raus ever since. I'm not regretting it yet. It's been quite a roller coaster ride, but it's also been very beautiful to see all these people having amazing experiences in our cabin.

SPEAKER_01:
Where's the business at today? Talk us through 2020 to now and the vision for the future.

SPEAKER_02:
Yeah, I founded the company in 2021 together with two friends of mine. Chris, Johan, and I, we're basically friends from school, so we've known each other for over 25 years. We've all made our careers in very different industries, but more or less at the same point in time, and that was in 2021, we all had this feeling that we wanted to change something, and we also wanted to build something that helped us to cope better with the crazy lives and careers and work life that we were having in the city. And yeah, I wanted to spend more time in nature. And then we had this idea for Raus of like really building a new product category that really brings together these two worlds. And then we couldn't find anyone who believed that this would be possible. So the producer said, this wouldn't work. The hotelier said, you're crazy. You will never make this work economically. The investor said, are you out of your mind? So we basically just started and prototyped how we really envisioned this experience could look like. And we aren't trained architects, we aren't hoteliers. But we just envisioned how we would love the experience to be and took out a sheet of paper and started drawing this experience and refined it from version to version. And then we found this, I want to say, crazy guy, the best and positive meaning of the word, in the Netherlands who dare to build kind of a first prototype of these cabins with us. And what we're trying to build, it's quite a complex product, you know, very high quality standard, as sustainable as possible, but also as mobile as possible so that we can bring these rooms basically to very remote locations without actually impacting the soil, being as minimal invasive as possible, but still adhering kind of to standards, dimensions, weight. So it's been really, really tricky. to find someone who kind of could build this. But then he dared to build these two first prototypes for us. And we put them live on our website in October 21. So just five months after. And we believed, you know, like October in Brandenburg, outside of Berlin, it's not as nice as it is in LA. So it's basically raining from the side, and we hoped if we get the weekends busy, that would be a success. And the rest we would just do ourselves, because we basically built it for ourselves. But then two weeks in, we've been completely booked out for all available days, six months into the future. And that's when we realized there's a lot of demand for this type of new category that is emerging. We quit our jobs and then started to do this full time. And now, a bit over two years later, We've scaled the company across Germany. We've also recently launched into Austria. We're now expanding across Europe. We're now operating over 70 of the cabins that we've deployed in the past two years. And it's been a fantastic time providing people with a very, very beautiful experience in Asia.

SPEAKER_01:
And being at Airbnb, did those first bookings come through Airbnb and awesome photography or was it PR? How did that catch fire?

SPEAKER_02:
So believe it or not, we're doing 100% of the bookings direct. We've now since made one of the Airbnb co-founders also invested into us last year, which was really, really fantastic for us too. We started to put like one or two properties of ours on Airbnb, which also works really well. But we're very fortunate that we can drive the best amount of bookings directly to our website. When we started this, it grew and it's still growing primarily through word of mouth. So over 80% of all the transactions and bookings that we do, and we've now done over almost four and a half million euro in booking volume, has been through organic, or let's say owned and earned media channels. So we're spending very, very little money on paid marketing, actually, or performance marketing, which is a very, yeah, it's been very nice that the demand is really outpacing the supply. We wish we would have more cabins already, but of all the things that you need to think through in the business, the demand fortunately wasn't an issue for us so far.

SPEAKER_01:
So you guys have a crazy guy in the Netherlands who's building these cabins for you. What happened from there? How did you think about scaling and like from a real estate site selection? Do you need a specific amount of square footage or do you need a certain number of cabins to make the economics work? How did that start and how did that evolve over time?

SPEAKER_02:
Yeah, we've been very naive when we started the company, you know, like when we thought it must be so easy to do this, you know, and then turns out it's freaking hard to do it. But as saying goes with like, how do you find the land? And we were just literally for the first locations, we were calling landowners, primarily farmers and foresters. So we were thinking, like, who are the ones that have beautiful land? And it's mostly farmers that have a lot of land and that sit on a lot of unused land at the same time. So we were basically calling landlords, asking whether or not they would be interested in providing us with a plot for the cabins on the land. And then it turned out that a lot of farmers and agricultural businesses actually really, really love what we're doing, because we're providing them with an opportunity to generate additional income for their business, and they can diversify their revenues, and actually the money they can make through the economic income that comes through us helps them to sustain their primary business. Something that we didn't realize in the beginning, how hard it is for them to make money and how they're really looking for new ways to diversify revenue. So that came very handy to us. And then it's a very close community. So they've been speaking with each other. And then a lot of landowners and specifically farmers approached us and were asking whether or not they could become like a host. And in the beginning, we were having like a, I want to say like a very different operating model. So they were providing us the land, but we were doing all the operations ourselves from cleaning to like maintenance, anything. And then turned out that was very, very hard to scale, you know. Because it's a lot easier if you have one hotel, 150 keys, one location, you know, your cleaning service comes in and goes out. For us, like, we have the same amount of rooms, but they're all distributed in different places, you know, so building up a stack or like, you know, the cleaning operations and the maintenance operations yourself just wouldn't really work. So this is also something where we then try to apply some of the LMP techniques of actually, can we bring the private landowners to becoming a host for us and this is the operating model that we're not doing so basically we provide the cabin the landowners don't have to invest anything more like. Bring up any capital we provide them the cabin they provide is the last. and also do the local operations that need to happen on-site. So cleaning, maintenance, anything that's kind of related to the on-site operations. We essentially then do marketing, distribution, customer support, and in return, they do receive a revenue share. And so I think this also led them to also want to provide good quality because if it works well, they can make more money. And from that, we then also started to think through what are other ways that can improve the guest experience, but also adds value to our landowners departments. And that was by providing an ecosystem of products and services that I want to say is like ancillary extras that enhance the stay from F&B to experiences and activities that the landowners consult through our platform to the guests. So that can be local dairy vegetables from the farm shop to stargazing experiences. I think bestseller last quarter was an alpaca hiking tour. So types of things that are very, very nature-focused and different to what you would do in a city, but really helps you as a guest to really chill and calm down and recharge your batteries, but also help the landowner to generate additional income. And yeah, also I think makes them really proud about their work. And that's been really fantastic to see.

SPEAKER_01:
So your Dutch builder, is he in-house now? Is he part of your team or he's an external party that you use as a contractor? How does that work structurally in your organization?

SPEAKER_02:
Yes. So I want to say from the first two prototypes that we built to how we now build, there's miles of improvements. I want to say it's still true to the core values that we wanted to implement. One is being as sustainable as possible, B is as technology driven as possible, but not, and I think this is really, really important in our case, not disturbing customers through technology. The experience that we're selling, it's a very offline experience. We're basically selling a very contemporary way to access nature. And while you're there, you shouldn't feel like you're in a tech smart home, although it is very tech enabled, you know. So I think that's been always our approach, like the technology, it's there, but it kind of takes a step back, because it's just an enabler for the guest experience. So and then, yeah, For our Dutch guy, we're still working with him on prototypes, but where his production capacities aren't as big as they are for the batch productions that we're now doing, or the series productions. So we have a network of producers that we work with all across Europe that produce the cabins. We own the designs and the engineering plans and like down to the nut and bolt. And then we have a network of these producers that produce them for us. And then we place them on the land. And then yeah, a couple days later, the first guest can actually check in.

SPEAKER_01:
What's the time to break even typically on one of these from the time to build to including the revenue share?

SPEAKER_02:
I mean, it's obviously depends a little bit on what you look into the operating costs, but it's on the occupancy and ADR obviously play quite a role. But with high occupancy that we've been able to achieve and the ADRs that we've been able to hit, it's less than 18 months until one of the cabin amortizes.

SPEAKER_01:
And how many cabins do you typically deploy onto a farm? Is it like one or two? Or is it like do you have some that are more like hotel style with like 10 or 15 cabins?

SPEAKER_02:
Yeah, so most of the private landowners, they have two to three on the land, but they're very kind of spread out across the land. We also have what we call the Rauslodges, which is basically like small boutique resorts. We have two of them in operation, one that has five cabins, the other has eight cabins. We're going to actually bring another six cabins to that location. And these, it's a bit of a different product, to be frank. It's still very, very nature-focused, but you will eventually meet other people. Very like-minded people, but it's also a place where we cater to families, to corporates, for people that want to travel in groups. We also wanted to provide, we had so much requests coming from these guests and we couldn't really cater to them with our cabins because most of them sleep two people. So if you're a group, we basically prevented you of accessing nature. So we wanted to build something for them. It's also something where we believe we want to expand into further in the future.

SPEAKER_01:
So I know there's a lot of tech that goes into it. Can we talk about, you've got kind of energy management. You had mentioned solar is powering these. I imagine being off the grid, that's kind of a requirement. What are you using for like energy management and what other tech is in the rooms? How do you guys feel about TVs? I know that could be controversial when you're staying in nature.

SPEAKER_02:
No, absolutely. Yes, so we're always looking at two tech areas when we look at house. There's the hardware, so the room and the cabin, and then there's the software that basically does the full digital guest journey from the moment you come and find out about us to the moment when you get home. So on the hardware and on the cabin, exactly as you mentioned, the cabins are engineered so they can function fully off the grid without having access to infrastructure. So that is obviously bringing a lot of complexities to topics like energy, water, sewage, and everything else that you need to rely on if you want to have this type of, also, I want to say comforts and amenities from what you would expect from a hotel room. So basically I want to say one of the key tech drivers within the rooms is a Victron system. So basically that's an inverter which inverts the solar energy from the panels on the roof into electricity and which is stored in lithium-ion batteries. and then powers the cabin and all the, I want to say, further IoT and smart home technology that we've built into the cabins. So just to give you a very quick glimpse on what it is that we have in there, there's a lot of smart home sensors and sensory suites, so that at any point in time, we can measure temperature, humidity, we can access open and closed doors and windows from afar, we can shut down and turn on heating. A lot of things, they are all connected and we use it on the one side to basically maintain the cabin from afar. They all come into a dashboard, every cabin has a vitals overview, we'll be notified of something if the electricity runs out or the level in the water tank is low and stuff like that which helps us to then work with the landowners and the landowners have the dashboard as well with the cabins that they have on the land to at any point in time see how is my cabin doing. But we also use it to showcase it to our guests. Because we believe that one of the big things that you've forgotten living in the city is actually how much you consume in terms of the resources. So you open the tap and water flows. You turn on the light switch and the light goes on. In our case, you have a limited amount of resources available to you during your stay. So if the water tank is empty, It's empty. We eventually will fill it up for you, you know, but still, we wanted to give you as a consumer and as a guest with us, actually an idea of if you open the tap, how much water does actually flow? And so in the cabin, there's a little panel that shows you your consumption. And after the stay, you're also getting an email from us that also informs you about the footprint of your stay and how much energy and water you've been consuming. I think even eventually you could even give whatever like a bonus or like a discount for someone who has been like very, very good to nature, you know, during his day. So I think there's a lot of opportunity with that. But for us, it was just really important that if we're kind of building this suite of sensors and vitals that show us the status of the cabin, why should we also give it to the guests? Other than that, we've also looked into ways of how can we basically hide the technology, if you want to say so. So there aren't any screens for you, there isn't a TV. The big window, the view outside, that should be kind of your national geographic for your stay. There's a small fridge, but other than that, there's a bit of lighting, but that's it. It's a very, very, I wouldn't say pure, but very, very high quality experience also when it comes to the interior. Then for water, there's water filtration systems. We're always thinking and innovating also in the energy consumption area. Currently, we're primarily working with solar panels and sun is our main, main driver, but also where we're testing fuel cells, we're testing a lot of things that can actually power the cabin even in times and, you know, again, Germany in winter is not like LA in winter, you know. So also, what do you do if like two weeks there isn't any sunshine, basically, you know, like, you have to be prepared, you have to provide guests with a nice experience.

SPEAKER_01:
And how do you guys, in terms of water in, sewage out, do you guys have trucks that are going around and basically supplying the water, extracting the sewage on a regular basis?

SPEAKER_02:
Yes. So, as you can imagine, this has been, from day on, a very interesting topic to cover. Like, what do you do with all this shit? So, we're basically testing very different approaches to this. But the main approach that we've been doing is we're working with a Swedish company, they're called Separate, And basically, they build very, very modern dry toilets. So what they do is they are, without going into too much detail on this topic, but they're separating solids from the liquids. And the liquids, they are being filtered, and then they will be released through like a planned filtration system. And the solids, they basically land in some sort of like a bag, which closes itself. And it's being removed in the guest change window. So after each guest, like it's fully cleaned, and then, I mean, that way you're saving a lot of water. It doesn't stink or anything. It feels like a normal toilet, although you don't flush. There's a lot of innovation in this regard. I think the next company I'm going to do will do something with shit, apparently. But there's also another system that basically incinerates everything that you leave behind. There's a little gas stove in there, you do whatever you do, and then you heat it away. and it just leaves a little bit of dust. So there's a lot of been, especially kind of in the outdoor and RV off-grid, I want to say, industry, a lot of innovation in that space. And we're trying to kind of obviously try to find the best solution out there.

SPEAKER_01:
Since we dove into the science of shit, now let's talk about the guest experience on property and just your tech stack from a software perspective that's enabling this. I think there's a couple of unique things. Number one, you mentioned you don't operate like a normal hotel. You don't have 100 rooms in a single location. You're distributed. You also don't really have the operational team on the ground. These are farmers who are not hoteliers. So, and how did you think about posing your tech stack from day one, starting probably with the PMS? Were you guys like, do these PMSs even work for us, these hotel PMSs? How did you think about that process? And then how did you build the tech stack around it from marketing, revenue management, all those other functions?

SPEAKER_02:
Yeah, I think I've been very surprised when we started the company. I was under the impression that for a trillion dollar industry, there must be technology in various different ways. It will be so easy to find the right PMS and the right systems for us to use. So we tried to work with legacy PMS systems in the beginning, like a full-service thing with booking engine, website and everything. And then we very quickly realized that most of the legacy technology wasn't meant and wasn't built for a company like ours, obviously. Most of them are built for hotels that have, I don't know, one, two, three room categories, but all of the rooms are kind of in one building. and they all have access to the same room service. In our case, all of the rooms are distributed in very different places and we have, I want to say, different hotel years for each of them and different service providers, different cleaners, different F&B options. different experiences that you can add to that trip. So, eventually, when we realized this, we couldn't find anything that really matched what we wanted to build and how we envisioned the guest experience to look like. We started to build it ourselves. So, how we currently work is, in the back end, we have a property management system called Appaleo. It's a German company that has an API-first approach. So, basically, it works as the skeleton of our operations. It hosts our cabins, but other than that, all around it, from the transactional emails, to the booking engine, or frontend, to the dashboards for our land partners, most of that is, I don't want to say custom-built, or we're using the APIs of other tools that we then plug together with our PMS system in the backend. So this very much powers the software here. We have a custom built booking engine that we also one of the learnings. And I think there's a lot of development going into booking and it's the most important thing for any hotel, if you especially if you want to drive direct bookings. But still, we believe that, like for especially for the business that we're trying to build, we couldn't really find anything on the market that wouldn't be a compromise for the guest experience and would work as seamless as we would like it to be. And that is also in regards to our company, and I'm sure there's amazing conversion-oriented booking engines out there that the big companies work with. But still, for our case, in our business that is very experiential-driven, we want to say, the trip starts with a booking experience. We want to build something that is in our control.

SPEAKER_01:
Okay, so you picked your PMS with Apelio because of presumably the app ecosystem around it. And it gave you that ability to customize your guest journey in a way that legacy ones didn't. And maybe it was a bit more flexible because you don't, from a booking engine perspective, even it's more of a vacation rental use case than a hotel use case. What were some of the apps that you built around Apelio? Like, how did you think about, are you going in their app store and just looking what's there? Or were there specific needs that you had to solve? How did that work?

SPEAKER_02:
Yeah, that's exactly what we did in the beginning. So we went into the app store and we tried to pick what we thought would be the best fit, you know, and then we also realized some of them still like they work for us, you know, and some of them just the bigger we grew and the more refined our way of communication and the way of how we wanted the guest experience to be just didn't meet that criteria any longer. There's a lot of great apps in the app store, but for a lot of hotels, they will work fantastically well and good enough. But I think for us, in this specific case, it didn't work. So we've built a lot of technology that is both hard-coded, but also a lot of no-tech tech, or low-tech, what you would say. So we've been building the companion, actually, that we've built. It's built on Retool. We've been for the CRM and the digital guest journey the email journey that is now based out of HubSpot that we've implemented. And then we've also I think like in terms of like we've always looked like does it make sense for us to try and work on a new CRM system now that would be like there's a lot of great tools out there. Same goes with payment gateways you know like something that's really hard where you need to have kind of security in place that's something where we buy where we try to find best in class products and bring them in and then we wanted to always have the opportunity to see if something works. In an open ecosystem, that's great, but if something doesn't work, we want it to not be just like bound to it forever. We want to have the flexibility to just look for something else or build something ourselves. And that's kind of always been their approach. Yeah, so HubSpot for kind of the guest communication. We also use it for our sales. So our team that works and finds new landowners and land for the cabins, they also work kind of through the sales funnel of HubSpot. And then, yeah, let me think what other like softwares like, I think the website is built on React, Next.js.

SPEAKER_01:
So from a guest experience perspective, you have this digital concierge that you guys have built. Is that app based or messaging based or a combination of both?

SPEAKER_02:
Yeah, so it's a mobile first, we didn't build an app, because we didn't want people to be dependent on their phone when they're out there, you know, so it's basically when you book with us, you get a booking confirmation. And with a magic link, you can directly get access to your Rouse companion that has everything around your stay. And then That is also something where you can leave your reviews, where you can also let us know if something is broken in the cabin or so, or if there's any complaints or anything that you would like us to know, or get in touch with our guest experience agents. So this is all done through our companion. And yeah, basically, we build it on retool. So it works on all devices, it's mobile first. We're still thinking whether or not at some point, and that could make sense, but at the moment, we frankly don't want you to be bound to your phone during your stay.

SPEAKER_01:
And so once they interact with you, how does that check-in process work? You don't have front desk agents, you don't have a lobby. Obviously, there are the farmers that are there to welcome the guests. How does that process work from the moment I pull up to that farm to getting into my room and enjoying my stay?

SPEAKER_02:
Yes. So this is all contactless. So when you book with us and you actually just get the location just a moment after you booked with us, so you don't know the exact location prior to booking. So people are waiting for that final booking confirmation that also then includes the directions and the GPS coordinates of the cabin. So once you're booked, you get this email and we show you how to get there with the companion. You can come where you leave your car if you come by car or like how you get there by public transportation i'm kind of done the last one to say the last half mile not even you know it's done by foot there's a little. Charlie is something where you can put your bags and everything that you brought from state and then you rock up to your cabin. The farmer isn't there to welcome you in that sense. He's prepared the cabin for you, and we've let the farmer, or kind of our partner, know upfront if there's anything that is particular for your stay, you know, anything that he should know, anything that you told us during the booking process, so that this is actually waiting for you in the cabin. But then it's a keyless check-in. there's a digit code or access system, and then you're just by yourself for the rest of your stay. And then there's a little manual that waits for you in the cabin on how to make a fire, and how to, like, things that you might have forgotten while you've been living in the city, and you just, you know, like, things like that. And then you hopefully have a fantastic time. And then when you leave, you just kind of close the door and you can get back home. And that's then when kind of our land partners come back into the cabin. They know that you've checked out because they can see in their dashboards that you've locked the door so they can come in and clean. And then it's ready for the next guest.

SPEAKER_01:
And I was asked the last question. It's going to be an easy one for you because your entire business is built around a contrarian viewpoint about the world. What's one thing you believe about hotel technology that you think most people in the hotel industry would disagree with you about?

SPEAKER_02:
I want to say, or I guess many would say, the more technology, the less human, the better the product. The better the experience and more technology, and we're trying to digitize everything. But I actually believe the opposite is quite true. Less is more in that sense. As much technology as necessary, but as little as possible. And I think that is the best technology the guests see, actually, the better. I'd rather focus their time, spending their time in nature, well-recharged, disconnect from the ever-buzzing screens and just enjoy undisturbed views on meadows, white fields, and lush forests. I think that I would recommend, yeah.

SPEAKER_01:
Awesome. Well, thank you so much for coming on the show today. This has been incredible. I'm so pumped for our audience to get to learn from you and learn about the raw story.

SPEAKER_02:
Thank you so much, Jordan. It was a pleasure speaking to you. And thanks so much for having us on the show.

SPEAKER_01:
That's all for today's episode. Thanks for listening to Hotel Tech Insider produced by Hoteltechreport.com. Our goal with this podcast is to show you how the best in the business are leveraging technology to grow their properties and outperform the comp set by using innovative digital tools and strategies. I encourage all of our listeners to go try at least one of these strategies or tools that you learned from today's episode. Successful digital transformation is all about consistent small experiments over a long period of time. So don't wait until tomorrow to try something new. Do you know a hotelier who would be great to feature on this show? Or do you think that your story would bring a lot of value to our audience? Reach out to me directly on LinkedIn by searching for Jordan Hollander. For more episodes like this, follow Hotel Tech Insider on all major streaming platforms like Spotify and Apple Music.