The Importance of Diversification with the Founder & CEO of Newman Hospitality, Andy Newman

Today joining Alex & Annie is Andy Newman, Founder & CEO of Newman Hospitality - a company that connects Real Estate Investors with high income short-term rental opportunities. Newman Hospitality operates in South Florida, Northern Virginia and Indiana, which at first glance might seem like an inefficient mix of locations, but as it turns out this very approach has given Newman Hospitality the chance to avoid the huge risk factor and seasonal woes of having all of your eggs in one geographical basket.

Andy mentions that this strategy blossomed from his banking background, where risk management is everything. Newman Hospitality has been able to retain their workforce year-round, and harvest the fruits of diversification. One interesting statistic that Andy brings up is that by spreading out your properties by at least 50-75 miles, you reduce your climate risk by half - which is a huge advantage in a market like Florida where natural disasters are becoming a common occurrence.

How Newman Hospitality came to be was when Andy started his first venture after leaving corporate banking in 2010. He had gotten used to traveling and spending a lot of time in Airbnb’s, and he enjoyed the experience so much that he started hosting his friends & family for free. That drove him to the VRMA and hospitality sector in general, on a mission to become a better host.

Currently, Newman Hospitality manages 130 properties. As many businesses do, their initial approach was to scale their portfolio as fast as they could, but after a while they started disqualifying and getting rid of properties that weren’t up to their standards. Their evaluation process focuses on three key elements - Property, Location and Owner. This has served them better than purely focusing on short term revenue, as disqualification avoids major headaches in the long run and guarantees that the customer experience is consistent in every location.

One of their biggest recent strides was becoming part of the Homes & Villas by Marriott Bonvoy network. While anyone can join Airbnb without much effort, Marriott Homes & Villas is a truly exclusive network that requires a good bit of qualification to join, and has been a huge selling point for both renters AND property managers to put their trust in Newman Hospitality.

Check out the full episode to learn more on how to turn diversification into your ultimate business advantage!

HIGHLIGHTS:
07:25 Newman Hospitality’s Business Strategy
11:02 Airbnb’s impact on Newman Hospitality
13:40 The Impact of Joining Homes & Villas by Marriott Bonvoy
16:32 Pick The Right Channel Partners
17:32 Andy’s Coaching Career
22:40 How Newman Hospitality Scaled
25:20 Issues With Regulations
30:25 Managing Long-Term Rentals
35:50 Running a Family Business
39:18 Treat Your Employees Right

This episode is brought to you by Casago, Guest Ranger, and Good Neighbor Tech.

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Special thanks to Rev & Research for being the presenting sponsor of Alex & Annie’s List.

Connect with Andy:
Website | Linkedin

Connect with Alex and Annie:
Alex Husner | Annie Holcombe
AlexAndAnniePodcast.com