How Joivy Adapts and Diversifies Its Business Model to Stay Regulation-Ready

Uvika Wahi

How Joivy Adapts and Diversifies Its Business Model to Stay Regulation-Ready

With a vision rooted in strategic flexibility and innovative market adaptations, Joivy is crafting a roadmap to excel in the world of short-term rentals and co-living spaces. At the Short Stay Summit 2024, we interviewed Francesco Morgante, the Head of Sales and Distribution at Joivy, to understand the intricacies of Joivy’s operational strategies, proactive regulatory responses, and ambitious sustainability goals, providing a blueprint for success in the competitive landscape of property management.

Unifying Diverse Brands: A Leadership Challenge Met with Innovation

Joivy’s journey of amalgamating three distinct entities—DoveVivo, ALTIDO, and Chez Nestor—into a cohesive brand has been anything but straightforward. “It was madness,” admits Morgante, reflecting on the technological hurdles and the complexities of merging systems and cultures. The need for robust data governance to make informed decisions was a critical factor, as was the strategic streamlining of communications across the newly unified company.

This process, however, did more than just combine business operations; it refined Joivy’s leadership approach, emphasizing the importance of adaptability and foresight in corporate strategy. The leadership lessons gleaned from this experience have equipped Joivy to tackle the diverse challenges of the markets they serve, from varying product demands across different regions to the intricacies of local market penetration.

Embracing Diverse Markets: A Tailored Approach to Expansion

Joivy’s expansion into new markets is a testament to its nuanced understanding of cultural and regulatory landscapes. Morgante highlights the importance of customization in its strategy, particularly in diverse environments like Italy and Portugal. Each region presents unique challenges, and Joivy’s ability to tailor its approach—whether through legislative advocacy or innovative business strategies—sets it apart. 

For instance, Morgante shares insights into their proactive engagement with Italian lawmakers to address the scarcity of affordable student accommodation, demonstrating their influence and initiative in shaping market-friendly policies.

Regulatory Agility: Staying Ahead in a Changing Landscape

Morgante stresses the significance of anticipating regulatory changes rather than reacting to them. “We position ourselves as experts who can guide our clients through these changes,” Morgante explains, illustrating how proactive strategies can turn potential obstacles into opportunities.

In Italy and Portugal, where regulations are continually evolving, Joivy has managed to not only adapt but also influence discussions, demonstrating its leadership in the market. This proactive involvement in legislative processes underscores its commitment to being at the forefront of the industry, ensuring that its expansion strategies are always aligned with, or even ahead of, regulatory developments.

Innovation in Response to Regulation: The Scottish Example

In Scotland, for instance, impending regulations prompted Joivy to pivot swiftly, transforming their business model to comply with new standards while still maximizing client retention and profitability. Scotland’s evolving regulatory landscape provided Joivy with an opportunity to rethink its business model. 

Morgante elaborates on how anticipated changes in short-term rental regulations prompted Joivy to transform their offerings, transitioning from short-term rentals to becoming full-fledged letting agents when regulations became restrictive. This adaptability not only preserved client relationships but also maintained revenue streams by diversifying their service offerings.

Leveraging Temporary Accommodations: A Profitable Niche

An intriguing aspect of Joivy’s strategy involves capitalizing on seasonal fluctuations in student housing. Morgante shares their success with pop-up hotels, a temporary accommodation solution that fills vacant student housing during the summer months. This initiative not only addresses the seasonal demand spikes but also maximizes the utilization of properties, generating significant revenue and showcasing Joivy’s ability to innovate within niche markets.

Strategic Innovations: Leveraging Leasing and Building Partnerships

The shift towards leasing entire buildings allows Joivy greater control over the properties and, consequently, the services they offer. This model has led to impressive occupancy rates and operational efficiencies, showcasing the benefits of this approach. “The difference in the KPIs are outstanding,” Morgante points out, highlighting the success of their strategic shift towards leasing as opposed to managing individual units.

The narrative of Frontdesk, a former player in the short-term rental industry, serves as a cautionary backdrop. Frontdesk, despite securing $26 million in venture capital and expanding rapidly by acquiring units from competitors like Stay Alfred, Lyric, and Domio, faltered and eventually closed its doors due to unsustainable leasing costs and diminishing rental yields. 

The challenges were compounded by a tough economic environment characterized by rising interest rates and shrinking venture funding. This example illustrates the risks inherent in the arbitrage model and the harsh realities of the industry.

In contrast, Morgante expresses robust confidence in Joivy’s strategy. By forging partnerships that share financial risks, Joivy enhances its operational flexibility and constructs a safety net that cushions against market volatility. These partnerships are crafted to be mutually beneficial, ensuring resilience and stability for both Joivy and its partners. 

Future Visions: The Potential of Build-to-Rent

Joivy is tentatively eyeing exploring the burgeoning field of build-to-rent, aiming for growth and scalability that could redefine its market presence. Francesco Morgante shares their proactive approach, involving collaboration with asset owners and design teams to develop properties that are versatile and adaptable to the shifting demands and regulations of today’s rental market. This has echoes of the model adopted notably by Airbnb with its Airbnb-Friendly Apartments initiative.

Airbnb’s integration of Airbnb-Friendly Apartments is particularly relevant here. Amidst tightening regulations on short-term rentals, Airbnb’s development of buildings specifically designed for short-term engagements represents a significant pivot in their business strategy. These units are not merely about compliance but are a clever adaptation to continue expanding within legal frameworks, showing foresight similar to Joivy’s approach.

Joivy’s interest in build-to-rent parallels this trend but with a focus on even greater adaptability. The vision Morgante outlines is ambitious: properties that are not just built but thoughtfully engineered to flex across different uses, ensuring they remain viable and profitable as market dynamics evolve. 

By engaging in the design and planning stages, Joivy is positioning itself to create multifunctional spaces that could shift seamlessly among various rental models—be it short-term, co-living, or student housing—depending on market conditions and regulatory environments. This could help Joivy anticipate future market trends as well as prepare the groundwork for regulatory compliance and community integration from the outset.

Sustainability: A Core Value with Room for Growth

While Joivy has incorporated sustainability into its operational strategy, Morgante acknowledges the need for greater efforts in standardizing practices across its properties. This initiative aims to enhance the recognizability and consistency of the Joivy brand while embedding deeper environmental responsibilities into every aspect of its business. 

The planned appointment of a head of standardization signifies Joivy’s commitment to not only leading in sustainability practices but also to communicating these efforts more effectively to guests and partners.

Joivy is also concurrently collaborating with EnviroRental, a move that underscores their commitment to environmental stewardship. 

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