Novasol has developed into Northern Europe's largest company for holiday rentals with 40.000 holiday rentals in 29 European countries. Novasol has subsidiaries in a number of countries, several walk-in offices in popular holiday areas and hundreds of committed employees.
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May 21, 2021
Awaze is a European vacation-rentals business that U.S. private-equity firm Platinum Equity carved out of Wyndham Worldwide in 2018 in a $1.3 billion deal , including debt. The pandemic boom in domestic lettings of cottages and holiday homes for families in European markets has benefited Awaze, which has this week resumed growth through mergers and acquisitions of property management companies. Awaze’s Copenhagen-based Novasol brand, which runs homes on behalf of owners, said Thursday it had acquired rental agency Bornholmtours. The deal makes Novasol the largest holiday home rental company on Bornholm, a Danish island popular with visitors from Scandinavia and Germany, with 1,160 rentals. Novasol offers around 50,000 holiday homes across Europe. Awaze’s British business Hoseasons said this week it had acquired the cottage companies Amberley House and Portscatho Holidays to plug some inventory gaps in districts like Cornwall. During the pandemic, Awaze also acquired its choice of properties that Vacasa abandoned when the largest U.S.-based property manager chose to refocus on the North American market. Awaze also acquired Strand Bergen in Holland. “If you look in the UK and across Europe, we have the most properties in the category of properties under professional management,” said Awaze CEO Henrik Kjellberg. The managed category excludes properties rented out by the owners of the properties themselves. Awaze almost always controls the master calendar of inventory for properties, and it runs them and handles bookings, payments, and customer service. Awaze has benefited from Vacasa’s retreat. But it still faces competition on the Continent from Oyo Vacation Homes , owner of the BelVilla brand, and which bought TUI Holiday Homes in October. “There’s an opportunity for big organic growth and M&A,” Kjellberg said. “Even in the UK, which we have very well mapped, we’re still finding companies that are interesting because there’s still a lot of fragmentation in the sector.” The private company is shy about its financials. But rating agency Moody’s most recent evaluation said Awaze had “solid profitability with reported earnings before interest, taxes, depreciation, and amortization (EBITDA) at margins of 18 percent.” The agency also said Awaze had adequate cash reserves if the pandemic takes a turn for the worse. Yet it said the company has high leverage, which Awaze’s debt load estimated at around ten times income in 2020. In the pre-pandemic year of 2019, the last time Awaze filed public financials, it recorded a loss of $31 million (€25.5 million) . Tech Tune-Up The acquisition activity is one prong of Awaze’s retooled strategy for growth. A tech play is another. In September, Awaze essentially moved its UK headquarters and technology hub to Manchester from a remote part of Lancashire. It hired its 50th employee in Manchester this week, and it is still hiring. “This year, we’re spending [about $42 million] €35 million on technology, with investment helped by our owners,” Kjellberg said. The tech revamp has a few goals. One is to modernize some legacy systems. Another is to integrate the back-end systems of Novasol with Awaze’s UK operations. A third goal has been to provide better tools for owners and managers. The company has launched a new owner portal in the UK. After testing, it will roll out the portal out across its portfolio. A longer-term goal is to make Awaze’s total inventory of more than 100,000 properties available on each of its brands. Today, the company’s online travel agency brand Cottages.com doesn’t list many properties in many markets run by sister brand Novasol. But the group company wants to offer a UK homeowner distribution via Novasol and not only from Cottages.com and Hoseasons. The pandemic threw a wrench in this plan for cross-marketing. While countries keep updating and changing rules on who can visit and under what conditions, the terms and conditions for each contract have varied, depending on where a customer is coming from. That has caused technical complications. Looking for More Direct Repeat Bookings Awaze wants its brands to rely less on online travel agencies and other third parties so it can slash its distribution costs. “You can grow stupidly on the demand side if you just buy more Google ads or pay more commissions to every third party you can find,” Kjellberg said. “We would rather get direct demand. For that, we need to make our sites easier to use and faster. We must make sure the sort order of listings is better and that pricing is always accurate.” Awaze’s push for direct is part of a broader trend that analysts have noted in the sector. “A push for more direct bookings and niche channels exploiting new opportunities will put pressure on the major platforms to retain their market share,” said Wouter Geerts, Skift Senior Research Analyst in this week’s Skift Research report, “The Short-Term Rental Landscape Will Never Be the Same.” Awaze’s Tech Play Operational tech gains are also in the works. “We are now tracking things like how long it takes for our teams to answer the phone calls and queries from owners, which is one example of us putting processes in place to operationalize and track performance improvements where before processes were more ad hoc,” Kjellberg said. Jeff Hurst, the head of Vrbo at Expedia Group, said on Wednesday at Skift’s Short-Term Rental and Outdoor Summit that Expedia Group had benefited from concentrating its marketing on flagship brands in specific markets, such as Vrbo in the U.S. So wouldn’t Awaze gain from a similar consolidation of brands? Awaze plans to keep three of its vacation rental brands, Hoseasons, Cottages.com, and Novasol. It will keep them separate because the brands have built up consumer followings, Kjellberg said. Novasol, for instance, thrives most on German-speaking travelers visiting Denmark, Germany, Croatia, and Holland and who have no awareness of Cottages.com or Hoseasons. The group’s strategic vision is to move to as much unity as possible behind the scenes. The group has essentially united the commercial, supply acquisition, and marketing teams. Soon there will be a single owner portal used by managers across brands. The portal will let owners know things like when they’ll get paid and how they can block out weeks. Awaze will remain in a shopping mood. Across the group, it focuses on properties that families reach by driving. “The primary acquisition process is that we’ll focus on adding where we know where we need to have more inventory in the most popoular destinations,” Kjellberg said. “We also ask, ‘Is there an operator there that that has strong relationships with a number of homeowners?’ The company could range in portfolio size from something smaller to the thousands of properties.” See full article
2 Team Members
Novasol has 2 team members, including former Chief Executive Officer, Jan Haapanen.