Tourist Accommodations: “A sector larger than the hotel industry is yet to come”
Alterhome is a proptech specialized in managing tourist or vacation rental properties. Following the pandemic, it managed to recover its activity in Spain with the reactivation of tourism, aiming to continue growing in other international markets as well. Currently, it manages a portfolio of over 150 accommodations, including houses, monthly rental buildings, and boutique hotels. Chema González, CEO & Co-Founder of Alterhome, speaks in this interview about how the company originated and the opportunities offered by the tourist housing sector, which is expected to reach a market volume exceeding 100 million euros by 2025. It is estimated that by then, six out of ten people will be looking for reservations in this type of accommodation.
Tell us about the origins of the project.
At just 26 years old, along with my sister Patricia, I founded Alterkeys. This platform operated in over 40 countries, with over 100,000 property owners and investors such as the Ortega family or Juan Roig (through their investment arm in startup Lanzadera). It quickly became one of the most important references for tourist rentals in Europe until it was eventually acquired by Room Mate in 2015.
Shortly after the sale of Alterkeys, aware of the need for professionalization of the industry and the advantages of introducing technology into the real estate brokerage process, we created Alterhome: a concept designed to offer users the advantages of staying in an apartment with hotel-like services. Our goal is to enable each owner to generate more income from their properties or buildings.
What advantages do you have over traditional rentals? Is the profitability offered by tourist rentals much higher than conventional rentals?
Like everything, it has its pros and cons, although we believe it has many positive aspects compared to traditional renting. Firstly, it is slightly more profitable from an economic point of view. Secondly, the accommodations are better maintained because our operations team conducts thorough inspections two or three times a week. This is crucial for the health of our sector and something that property owners increasingly value. The apartments we manage are in perfect condition because otherwise, they wouldn’t generate bookings and the experience of our travelers wouldn’t be excellent, leading to no repeat business.
Additionally, with Alterhome, owners do not lose possession of their homes, as they can use them whenever they need to. This is something that traditional renting does not allow, as you lease the property for many years without knowing what you will find at the end of the contract.
“We have developed a unique model that allows us to create a vacation rental business from scratch in any city in the world.”
What portfolio and type of accommodations do you currently manage?
Currently, we manage a portfolio of over 150 accommodations, including houses, monthly rental buildings, and boutique hotels.
What is the profile of Alter Home users?
We have three target audiences. Firstly, travelers: anyone interested in renting a vacation property in our various operational areas. The booking is made through any of our OTAs (such as Booking, Airbnb, VRBO, Expedia, etc.) or through our direct booking channel. Secondly, property owners from anywhere in the world who have properties in optimal conditions to be destined for vacation rental. And lastly, entrepreneurs willing to venture into the vacation rental sector. With our proven method, we take care of setting up their own turnkey business, ensuring the best results and exponential growth.
How do you differ from other platforms that work with this type of rental?
Our experience at Alterkeys made us realize how unprofessionalized the market was. Therefore, we work to professionalize the sector, while offering anyone who wishes to venture and live with greater financial freedom and flexibility the opportunity to have their own vacation rental business, even without any experience in the sector. We guarantee them the knowledge and technological infrastructure necessary so that they can start capturing properties and receiving bookings from the very beginning.
The high technological component of the company is your main added value. What kind of processes does the platform monitor?
We have developed a unique model that allows us to create a vacation rental business from scratch in any city in the world. And we do this through our partnership with local entrepreneurs who receive all the necessary training.
Technology is one of our differentiating values. We use Big Data for key issues such as pricing (dynamic prices that are constantly updated based on supply and demand in a specific geographical area), digital key to facilitate guest access and check-out, agreements with OTAs (Online Travel Agencies), and applications to control noise. Our technology allows monitoring more than 110 processes simultaneously, enabling a single person to control and manage up to 25 properties at the same time.
According to the latest data from the Tourist Housing Observatory in Spain, the tourist housing sector generates around 20.4 billion euros annually. What opportunities does the sector offer?
In 2021, 29.4% of traveler bookings were vacation accommodations. It is expected to reach 52.4% in 2025, with a market volume of 107.6 billion euros.
On the other hand, five years ago, 70% of this industry did not exist: a sector larger than the hotel industry is yet to come, although it is still not very professionalized. At least for now.
More and more people are telecommuting and temporarily living in different parts of the world. This also represents a great opportunity for the sector.
“2025 will be the first year in which vacation rentals surpass hotels in nightly bookings sold.”
What growth forecast do you have both in Spain and in Latin America, after your recent openings in Mexico and Belize?
We are in Alterhome’s greatest expansion era, where our main focus is on searching for and retaining local talent, entrepreneurs aligned with our philosophy, values, and corporate culture.
Another key element in this expansion strategy is to invest in talent within the team. In this sense, in recent months we have incorporated great professionals from renowned companies such as Expedia.
After establishing our presence in Spain, our international focus is to consolidate our presence in Mexico and then enter Colombia as the first market in South America.
To carry out these growth plans, the company has opted for the franchise model. What advantages do your franchisees get?
We provide entrepreneurs and investors – both experienced and inexperienced – with an agile solution designed to facilitate the management of their business, saving time and money. With our tools and support, they can manage a large volume of properties, automating processes, thus boosting revenue. Additionally, you don’t need to have any properties to operate and generate returns.
Tourism is one of the biggest sources of income for Spain. How does the future of tourist or vacation rentals in our country look?
New opportunities and challenges are emerging in the sector. While a broader market opens up, competition intensifies. Therefore, we are obliged to explore new horizons and continue to innovate in our processes.
2025 will be the first year in which vacation rentals surpass hotels in nightly bookings sold, according to Booking data. The sector is constantly growing, and we are getting closer to what travelers are looking for.
In recent years, the regulation of tourist apartments has been controversial, and in some places, restrictions have increased. Is it possible to find a balance?
Regulations on tourist accommodations can change frequently, so it is very important to always stay up-to-date with changes and legislative news. We adapt to the existing regulations in each city to ensure compliance with current laws.
We have been advocating for the creation of sustainable regulation for over a decade. We believe that a single national response for the entire Spanish territory would be ideal, not only for compliance with regulations but above all to provide the best service to travelers and make Spain a more competitive country. In 2025, six out of ten people will be looking for reservations in this type of accommodation, compared to the hotel sector. That is why there is a great need in our country to professionalize every aspect related to the management of vacation rental properties.