I had the opportunity to talk with Emannuel Arnaud, the founder of GuestToGuest, to learn more about this home exchange website. GuestToGuest is now one of the two largest home swap sites, exceeding 50,000 members. I learned about their plans to take over the world, gained a better understanding of GuestPoints, and found out about some new services and features to be launched later this year.
GuestPoints: a new currency of home exchange
GuestToGuest focuses on “GuestPoints” as the currency of home exchange, rather than requiring people to arrange direct swaps with other members of the site. GuestPoints address the problem of finding someone who can swap on the exact dates you need in the exact place you want, instead creating a swap currency of points that you earn by letting people stay in your home. You spend those point for lodging with anyone who has availability when and where you need it, basically opening up the options for non-reciprocal exchanges to include everyone participating in the program.
ShareTraveler: Your site profile says that you were founded by 22 families from around the world. How did that happen?
Arnaud: For New year’s eve 2011, I tried to organize an exchange on another home exchange website between Paris and Florence. I was very disappointed by my inability to organize the exchange. All the more so that some people in Florence had told me that their home would be empty but they were not interested in hosting me because they did not want to come to Paris. That’s when I had my ah-ha moment about GuestPoints. From the moment I had the idea, I talked a lot about it with family and friends until 21 families (and myself) decided to chip in some money (some as little as a few hundred euros) and try to launch a better website, around the idea of GuestPoints….and around many other ideas that the families had given me, for instance the idea of being organized like a social network. All 22 families are still shareholders of the company, and many are still using the website to organize their holidays.
ST: Why did you decide to focus on points instead of direct swaps?
A: GuestPoints are the reason why we created GuestToGuest. We view Home Exchange as an amazing experience, but one that has been so far only limited to a niche, because among other things, it was too complicated to organize exchanges. We are convinced that our GuestPoints are the ideal way to solve that issue and make Home Exchange mainstream.
ST: What percentage of exchanges made through GuestToGuest are with guest points?
A: It depends from one month to the next, but it is typically above 60%.
ST: Are you concerned about LoveHomeSwap launching swap points as a competitor to GuestToGuest?
A: Yea, of course. Concerned and flattered. When you start having people emulate your inventions they put you in the seat of a leader. I’m not that concerned because they’ve had difficulties doing it right. It’s more complicated than normal exchanges and there is a learning curve. I have a feeling we are ahead on that.
From 50,000 members to conquering the world
ST: Congratulations on hitting the 50,000 member mark. By my count this makes you one of the two largest house swap sites (the other being Lovehomeswap.) How did you get this big in only 3 years?
A: [The purchase of] Itamos provided roughly 5,000 members, and less homes, so most of the growth comes from GuestToGuest itself. In my view, we are still very very small. Indeed, when you think about it, there are probably millions of people out there who would be willing to exchange homes. Right now, these people view home exchange as not safe, or hard to organize, or they do not want to pay an expensive subscription. What we are trying to do is to remove those barriers by creating a product which is 100% safe, flexible and free. And this is what has allowed us to grow so fast: the experience we offer our members is simply better…and we are working really hard to make it a lot better.
ST: Most of your listings are in Europe with the vast majority of those in France. Do you have plans to expand to a more even geographic distribution?
A: As of today [May 13, 2014], out of our members’ 52,000 homes, a little more than 20,000 are in France, 8,000 in Spain, close to 5,000 in Italy, and then 3,500 in Argentina. Our long-term goal is to have homes all around the world, and as many as possible in each country. In the short term, we will focus on Western countries.
ST: Any plans to make a bigger move into the U.S. and Canada?
A: Since we have limited resources and we are already pretty big in Europe it makes more sense for us to focus there. We want to conquer the world. Right now in the next six months we are going to focus more on Europe for marketing.
ST: Is there anything that stands out as interesting or surprising to you about your membership?
A: More than 50% of our exchanges are made within the same country or a neighboring country. Contrary to other home exchange website, we are targeting middle class families spending their vacation in a place that is accessible by not-too expensive transportation. I view other players as more focused on intercontinental exchanges for wealthier people. But I do not have access to their statistics.
ST: I’m surprised that the majority of your exchanges are short distances. But I think that makes sense when I look at your geographic distribution being concentrated in Europe. When your site expands globally I wonder if this will change just by nature of the membership.
A: The way we see it home exchange is going to be a product for the masses and the masses usually travel within their own country. Maybe every ten years they will take a big trip to New York. We think the current home exchange websites have been marketed more around the high end and we are trying to be something for everyone. Most people are interested in going not that far, and it’s easier to organize a home exchange when you speak the same language and have the same cultural reference.
Coming soon on GuestToGuest
ST: Your insurance policy creates a strong incentive for the guests to treat the property well, but if they really wanted to commit serious theft, this insurance would not cover the costs to the host. This is probably less likely than random home burglary while someone is out of town, but it’s still not 100% safe. Is there more you think can be done to assure people this is safe?
A: Yes, having a dedicated insurance product, which we hope to launch in the months to come.
ST: What’s next for GuestToGuest? Do you have new features or services you plan to roll out?
A: We have a new version of the website which we’ll roll out this year. I’d love to give you and your audience a sneak peak before we roll it out.
Innovative business model but there are some significant challenges:
1. Points are too expensive to keep buying
2. Points are too difficult to earn if you’re not in a large urban centre
3. In all fairness – HomeExchange doesn’t have enough skin in the game to be the recipient of all the money charged for guest points. Therefore reduce the cost of points significantly otherwise there is resentment by owners that you are making so much money on their backs. I don’t mind if you are making less than $50 night [which is significant given you are offering only admin services]. But anything more – is a bit outrageous. Especially the nicer the accommodations.
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Warning about Guest to Guest
I’m posting this to warn other potential customers of this site that we had our identity stolen through this website. As part of the registration process, Guest to Guest ask that you email them scans or copies of proof of address and ID. We sent a scan of a utility bill and passport to the address requested, asking for confirmation that it had been received. We did not receive confirmation, but instead another request via their website for the same information, this time to be sent to another email address. All this was on their own site and using a cloned copy of their official pro-forma. We then received an email alert from Guest to Guest that someone was operating a scam from their website and that we should not send information to the address provided. Unfortunately this information came too late as we had already sent the scanned documents to the phoney third party. If they had telephoned us straight away our documents would not have ended up with a third party. At the same time we also received a spoof email from PayPal (the payment method we had used) but this time we ignored it and reported the matter to PayPal.
Apart from the fact that this incident set of a nightmare of having to contact our bank, the police, passport office, etc., etc., and has put us at risk and expense, and we still don’t know if someone will use our identity to defraud us, instead of apologising and offering to compensate us, Charles-Edouard, one of Guest to Guest’s directors, started providing a list of excuses including that they were victims too and that this sort of thing is common. They simply would not accept the fact that they had not provided a secure system for taking payment and verifying identity. They did refund us our 25€ registration fee as we requested, and did apologise after we criticised him for his attitude, but that was it. They have still not accepted any responsibility for the breach of security. So please be very wary if you intend to use this site.
My problem with guest points is that homes in heavily touristed areas are going to be demanded all the time, while others will be a harder sell. If you accumulate a lot of points because you, say, live in NYC and can’t use them all, it is going to be like getting stuck with unused timeshare weeks (which I really think is the model for the guest points hoopla with home exchange). Conversely, some people will be unable to get many guest points because their homes are in areas no one wants. Giving them guest points up front (as guest points sites often do as an inducement to join) might end disappointment later. They use their guest points and then might be unable to get anymore because no one wants their home.
I see a lot of problems developing from supply and demand long term.
While some people might find guest points useful for short stays, moreover, I don’t see it working as well internationally where people like to stay longer. It also will work better for those with second homes because you have to go somewhere else when your guest comes (same for a nonsimultaneous home exchange). I find the whole thing very confusing and until I am convinced that it works long term am just sticking with home exchange.
Excellent interview. I’ve gone through the site and now I have a better view of the goal of the site and that of other competitors. Thank you!