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. Steve: Today we are with Chad Rowe
and Rowdy Stovall from 3rdHome, and

they're going to be explaining how to
become affiliates of 3rdHome through

Cosago, what are the advantages and
homeowner acquisition strategies

and how to get your homeowners.

On the program to make them more
sticky and give them the benefits

of this really cool offering.

We have so welcome guys.

Thank you.

Thanks.

How you doing Steve?

Doing great.

Glad to have you guys here.

Chad, you're the SVP of
business development.

Is that right?

That's correct.

Can you tell me a little
bit about your role there?

Rowdy: Sure.

Yeah.

Within the business development
department my job is essentially B2B

relationship building and partnership
acquisition, if that, that rings a bell.

So whereby there's a different
division that handles our

organic growth within third home.

The affiliate and business development
division focuses on B2B relationships

whereby major hotel brands, such as.

Ritz Carlton, Four Seasons, Au Baird,
Rosewood development companies globally.

To the obvious one here in short
term vacation rental managers right

on down to individual real estate.

Companies and real estate agencies.

We work with them all.

Steve: Yeah.

And Rowdy, you're the director
of business development.

Nick: That's right.

Yeah, I basically was
brought on this last year.

I was working on a resort
development lease last year.

That's where I was introduced
to chat in the 3rd home.

And then when I left that project, I
came over and basically is Director of

business development supporting what
basically what Chad just mentioned and

kind of focused on real estate developers
brokers VRMs, such as you guys and

just supporting him in those efforts.

Steve: Now, Chad, I understand
you started with natural retreats.

Rowdy: Yeah, literally right about
the time when third home came out of

the ground 2010 I brought a British
brand called natural assets and its

sister company, its operating company
called natural retreats over here

to the U S and launched it in my
hometown of Charlottesville, Virginia.

So I, made myself employee number
one and grew that brand from zero

to the stance that it's in today.

.
, Steve: it's a great brand and some
really nice people over there.

Sarah Frazen was there for a
long time and just a whole group

of great people over there.

Yeah.

Good talent.

Good talent on that team for sure.

. And Rowdy, you were on 90210.

Whoa, hold on.

Nick: No, that's wrong.

No, you don't have it wrong,
but that was many years ago.

Yeah, I got a, when I left Texas
and moved out to elevate in the mid

nineties, I was in the film industry
for about 20 years and first few jobs

were acting jobs and my, one of my
first roles was, The bartender at

the peach pit after dark on 90210.

This was in like 97 or something.

So yeah that, that is a fact that

Steve: So tell me about third home.

And how our partners are able to
leverage it and maybe just start

with what exactly does it do?

Sure.

Yeah.

Rowdy: The idea of luxury home exchange,
which is the industry that we're in

specifically, not a new concept been
around for decades, but much like the

short term vacation rental industry,
it really didn't organize itself

and, professionally balance itself.

Yeah.

Here in the U.

S.

and elsewhere until around 2010.

The idea of exchanging time in one's home
certainly overlapped with the timeshare

theory, which this is certainly not.

It instead pairs very well with the
luxury realm of second home usage.

Whereby, whether a person rents
their home or not they might feel as

comfortable or more comfortable if a
club member, a fellow club member of

a vetted organization, so to speak,

.

Steve: Chad, tell me, . How
exactly does it work?

Rowdy: Well, third home essentially
is a keys for time program.

It's an indirect option
versus a direct option.

So it's not.

Two individuals exchanging
weeks in their own homes.

It's guaranteed time in one second
homeowner's property for credits or

keys that then are used like currency
to exchange in another homeowner's home.

Does that make sense?

Steve: Yeah, it makes perfect sense.

Rowdy: That's correct.

Yeah.

There, there are some competitors.

We're not in this industry alone that,
that do a direct model where it's

quite literally two homeowners acting
as travel agents and coordinating

with each other to share time and
in that property on a literal.

Week for week exchange.

We're not that model.

We followed more closely the Marriott
Bonvoy model, whereby a points driven

system and already accepted and proven
system meshes exceptionally well and

also rewards the higher end properties
and the higher end times of year for

the deposited weeks in those properties.

Steve: And so the way I understand
it is you provide a currency called

keys and these keys are how you decide
what the credit is for like each

week that you put into your property.

How do you earn a key?

And maybe explain what a key is.

Rowdy: Sure.

So keys again are the
currency of third home.

They're formulated by two metrics really.

One is the literal market value,
the real estate market value

of the property in question.

So we set a base key value
based on that market value.

If it's half a million to
a million, it's a one key.

Base key value.

If it's a $5 million home and up, we
base that as a five key base value.

And then we apply a metric of
desirability based on seasonality

of the time deposited in that home.

So if you had a $1 million home and
it was a one key property you put that

same property in during peak season,
you'd get a two x multiple of that and

it would be a two key week deposit.

Same in a super peak prime holiday weeks.

For example, would get you a three and
sometimes four X multiple providing

more keys that then you could use to
exchange in the other homes elsewhere.

So you rewarded by guaranteeing time
and the more valuable properties

you own or represent, and then
exchanging desirable times in that

property for others to exchange into.

Steve: So it's by the
value of the property.

Multiplied by the value of the time that
you offer to the third home in order to

create an exchange for the keys, right?

That's correct.

And what's the cost for homeowners
on the affiliate program?

We have a special deal through Costco.

How does the franchisees, how did
the partners explain that to the,

each homeowner as they're talking

Nick: about it?

So when they joined through,
through Costco you were able to

waive those join initiation fees.

It's usually a 2, 500 initiation
fee by joining through Costco.

You gift them that membership where they
don't have to pay the initiation fee.

And also you gift them
five keys and five keys.

Like Chad was saying earlier,
that's basically on a non peak week.

You're looking at like
a 5 million property.

So it's a joining by
joining through Costco.

It's a huge value add and a
great benefit to the new members

by joining through you guys.

Steve: Now that's great.

And then do the partners also
earn keys when somebody signs up?

How does that benefit them?

Rowdy: That's right.

The the partners benefit greatly and
really it breaks down to the frequency

for which and the productivity
for which they introduce their

homeowner clients to third home.

As a, an owned home enters third home
by way of that affiliation the Costco

will earn keys themselves into a master
account and those keys can be used for

travel just like a homeowning member.

Of the club, that's the one anomaly
to these affiliations is that you

do not have to own a home if you're
an affiliate partner to travel as

briskly as you wish within the club
using those keys that you earn.

Steve: Is third home integrated
with streamline or do they do the

homeowners need to block the units
separately in streamline as compared

to the software system in third home?

Rowdy: Really good question.

Third home works on fixed weeks, right?

So we're a bit old school in that regard.

We do have a robust tech stack
behind our back office, but

we don't require a direct A.

P.

I.

In fact, we don't encourage.

A direct API with our affiliate partners,
because we know exactly the times of

the year that are being deposited.

They're typically deposited all
at once and then potentially

updated throughout the year.

And they're, they follow the
pattern of an owner's usage block.

So the same manner for which Steve, your.

Franchisees would block times
on their booking calendar for

owner stays third home weeks
would fall into the same pattern.

So there's no question whether you
can double book that property and

whether or not there's somebody
already staying in that property

their time off the market, so to
speak for a third home member to join.

Nick: Yeah.

And one, one really cool thing,
Steve, is that when people put their

weeks in, When they look at the
calendar, we'll send them a PDF.

They'll look and, choose their weeks.

They'll see on that file on the PDF
file, what weeks are peak season, then.

So they'll make that choice.

And then once they deposit those weeks,
they get their keys to travel, right.

Then they do not have to wait for
anyone to book their property.

And that, that's another differentiator
between us and, there's several

differentiators, but that's one of the big
ones between us and other travel clubs.

So they don't have to wait for
anyone to book their property.

They can go ahead and travel.

Steve: Benefit of the indirect model.

That's correct.

That's correct.

And how many keys does a affiliate or,
one of our partners, get per property

or do they get it just by joining?

How does that work out?

Rowdy: So, an affiliate would
typically earn Well, a franchisee

under Costco, let's put it that way.

Every individual owner that enters
the program through that Costco

franchisee the master account for Costco
would earn one key on the front end.

So when that member joins and joining
it equates to the time for which

they've entered the onboarding process
and made their qualifying deposits

to become active within the club.

As soon as that happens the franchise
E is delivered and they have a

master account has delivered one key.

Regardless of what the key value
of the home that enters is now

there's a second key that comes in
and an ever evolving and evergreen.

Pattern for them.

So, the real flow of revenue for
third home and for this partnership

success is in the booking and
travel of these properties once

they're activated on our site.

Not too dissimilar to an
OTA or another travel site.

If a deposit that occurs through
one of the franchisees books

then the franchisee another key.

So every time a deposit occurs
and every time another member

books that deposit, we incentivize
that franchisee with another key.

So their pot of keys continues to
grow as the activity grows with each

of their owners within Third Home.

Steve: Have you seen a lot of short
term rental operators use this to for

business development with homeowners?

And if you have, how's the success been?

And then as a second and follow up
question does it have you seen or do you

have any data on how being with 3rd home
or, an operator using 3rd home makes

properties more sticky in their inventory?

Rowdy: Sure.

Yeah, absolutely.

We're we currently have
over 40 vacation rental.

Partnerships within our organization,
and that's on a global scale.

There's close to 200 affiliate
partnerships globally include, everywhere

from yacht brokerages to hotelers, the
developers, you name it in the VRM space.

It's a fantastic fit for a lot of
different reasons, but for two it's

guilt free and risk free, right?

You're leveraging an asset.

You're the owners under management are
leveraging an asset that they already own.

So it's not a, an ask by
your your franchisees.

It's a gift.

It's an add on to their current package
of services that they have the right.

As an affiliate to offer at no cost.

No cost to the franchisee
and no cost to the homeowner.

Once they're in, trust me, these
owners of homes are going to love it

because they're not paying rent to use
these properties and they're paying

a very low booking fee to 3rd home
to ensure that trip is both there.

The homes are clean and ready to roll,
but we're also ensure those stays with

that with the revenue that fee produces
the real flexibility is in the increase

in travel flexibility for that homeowner.

And let's say a franchisee you
have is managing 50 to 100 homes.

Well, the good percentage of
those homeowners likely for a

good percent of those homeowners,
that home might be one of one.

It might be one of two second homes they
own, but they continue to utilize that

destination and that property because
they fell in love with it at some point.

It's an emotional asset for them.

Third home adds to that.

It doesn't decrease that, but allows
them the flexibility to take time that

they would have used themselves For owner
block travel to that property and exchange

it into properties all over the world.

Anytime of the year, they wish as often
during the year as they wish, as long

as they have enough keys to do so.

Right.

So there's definitely a recruiting
positive here for your franchisees.

They're offering an add on to their
property management agreement that says,

join us, we're different from others.

We have an incredible incentive for you
to take advantage of from the day one

that you join our management services.

It's also a great retention tool for
those already under management because

this can simply be gifted to those
homeowners right off the bat as a one off.

for staying with us.

Thank you for, being part
of the Costco family.

Here's a membership by a third home
through the affiliate partnership

that we've just negotiated.

Steve: So, Roddy, tell me about how
our partners signed up for the service.

Rowdy: Essentially Costco International
your master account as a brand will have

already has a master account set up and
with that master account, we have set

up a custom URL, a landing page, if you
will, excuse me, that allows recruitment

to occur directly in and through
our back office for you for Costco.

You're helping us recruit franchisees
within your your family here and

offering this to them to then improve
their recruitment and retention model

wherever that destination may be.

They'll simply follow the same methodology
and take an introduction through you

and be introduced to my team one on one.

That can be done through that
landing page or with a simple

email or telephone introduction.

Once that affiliate or excuse
me, once that franchisee has had

an introductory call we'll take
a hard look at their business.

Where is the destination?

Do we find it desirable?

Do our members find it desirable?

And as we survey our members often,
we know very well where the need

for additional inventory should be.

And then we take a look at the inventory,
we want to know that the invitation out to

homeowners under management is going to be
well received that inventory is fitting.

And if there are properties within
that inventory that may not fit the

mold in terms of a luxury home exchange
we'll work with that franchisee to

kind of trim down that list so that
we're only going after folks that

both sides don't have to say no to.

Nobody wants to be put in that
circumstance, but it's a very

simple introduction can be done.

Electronically can be done.

Personally.

We prefer personally once they're in.

We simply on board those folks with their
own affiliate partnership agreement.

We lay out the incentive plans that
have been negotiated by the home office

at Costco, and we get them started.

We provide a marketing
outline and timeline.

We provide at no cost that franchisee
all the marketing materials and

template messages, both print
and digital that they can use.

And we're going to provide them with
an individual URL and landing page that

they can embed in any message that's
relevant to their brand and the way they

speak to their homeowners as an offer.

A gift to those homeowners in
any way they wish to offer it.

Those homeowners can literally follow
that link and be directed directly

to a, a personal member experience
team member on our end, and they'll

individually then onboard each home
within that franchise portfolio.

Back of house you may not realize,
we're, we have a very robust personal

team and in place and in Brentwood,
Tennessee, there's about 50 strong

that do nothing but individual client
servicing and relationship management.

We have a similar size office in
Marbella, Spain that handles our

European business and another
office in the UK that does the same.

So very well equipped both personally
and in a technical fashion to receive

and manage your clientele very well.

. Can I insert something real quick?

One of the, one of the most important
pieces of, the why third home for a

franchisee is not just the recruitment
and retention of homeowners under

management, but something we've really
found success in over the past six

or seven years with our partners is
recruitment and retention of employees.

Okay.

At my, 14 years with Natural
Retreats, we ran into the same issues.

Hiring and retaining quality employees
and team members is one of the most

difficult pieces of the vacation
rental industry, just like any other

company and industry that backs it.

So to have the ability.

For that master account that we
talked about and by destination

each of the franchisees master
accounts, they're earning keys, right?

They're earning the ability
to travel as members.

And as those keys compile in that
account, they have the right to gift.

Those keys out in any manner.

They feel they should to
incentivize their employees.

And as long as someone is employed
directly under that brand destination,

you can reward your best salesperson for
the month with a week long venture to Cabo

or wherever it may be of choice to you.

And you could do it as often
as your key count allows.

So there's a fantastic benefit.

Fantastic.

Retention and recruitment tool for your
own business strength and your own team

strength that I would highlight as well.

Steve: Yeah, that's a fantastic
way to use those keys, isn't it?

Rowdy: We think so.

Steve: So is there a email
that we can give them?

. Rowdy: You're more than welcome
to reach us via email at

chad, C H A D at thirdhome.

com or rowdy.

stovall S T O V A L at thirdhome.

com.

And we can start the process right there.

You'll speak to one of us on the front
end from a franchisee level, and we'll

be happy to, proceed with you from there.

Nick: Steve, I was muted for a minute.

If anyone wants to jump on a phone
call or send a text and like, wants

to talk to someone right now and
ask, ask questions absolutely.

They can give us a call.

My phone number is 5 1 2 7 8 5 6 6 8 9.

If someone wants to pick up the call, pick
up the phone and call or send a text, I'm

happy to answer any questions people have.

Yep.

Rowdy: Same here.

434 996 8543.

I'm happy to take your call anytime.

Steve: All right.

Well, make sure to reach out to Rowdy and
chat and get on that third home program.

Make sure to benefit your staff members,
homeowners, and even your guests.

So thanks for coming on guys.

Thanks a lot.

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