Peter Schwartz, is CEO and founder of Demeure, an online travel provider that operates its own travel marketplace and licenses its proprietary Marketplace Management System (MMS) to others to power their own networks, allowing travelers, vacation property owners, hoteliers, and industry suppliers to book travel experiences, list properties, and trade in the market. Demeure was founded in 2009 in Waterloo, Canada.
Peter provided some impressive numbers about Demeure’s recent success, as it relates to its new ideas. These have created a substantial evolution — from a member-based club to an inclusive travel marketplace, with over:
8000+ buyer registrations
2400 curated private vacation residences
5500 subscriptions for buyers & sellers
100+ partners serving their market participants using our platform
170,000+ total audience
Four years ago, I interviewed Peter, and even then he was looking to the distant future, hoping to create a scalable travel platform and through that, a more substantial travel experience. Today, with the creation of the patent-pending MMS, he is moving closer to this goal. I interviewed him again in Toronto earlier in October 2013.
JustLuxe: This is not our first interview; the first one was about four years ago when the original Demeure actually launched. But your platform has changed; it’s no longer a member model, but rather a travel infrastructure that allows greater collaboration in many areas: private property owners, second home owners, hotel operators, fractional and other types of vacation clubs. How was this evolution accomplished?
Peter Schwartz: Well, originally, our idea was to take unused capacity, and by that I mean homes that were sitting empty for many months of the year, from both private property owners and second home owners, and develop a fair method to value it and to allow this capacity to be traded as the first level of value that we could give back to consumers.
We then added the ability for any asset owner [to] define their own privacy comfort level as to who stays in their homes — from public to premium only and to a list of private names — and that would be reflected in the value they could realize from their unused capacity. This factor along with other real world factors like seasonality, lead time, rental rates and other variables would drive the overall value of what asset owners would get in return; and what they would get, they could in turn spend on their own travel.
Demeure, Costa Rica
We worked to create used capacity, instead of unused capacity and made it interchangeable with cash for the owners to use on vacations of their own. We wanted those who own their homes to use their unused capacity as currency to travel to other places, to trade time in their homes for other homes, hotels, yachts, etc. No one else in the home exchange space can offer so many options. And these options can come with local hosts and concierges too, which is also unique in the home exchange field.
We have also deepened our relationships with property hosts, independent travel agents and hoteliers, allowing them to bring their value to Demeure and offer their services, using the same notion of used capacity to trade and exchange value on the platform.
Demeure, Turks & Caicos
JL: What is the process involved in licensing the platform?
PS: We have begun licensing the platform on a Branded and White Label basis to large supply and demand pools that can then increase the value of their offerings. Then, we have connected all parties in a ‘network of networks,’ creating a strong travel marketplace, and allowing each party to decide how deeply they wish to connect. In August we opened the marketplace up to everyone, and we are experiencing tremendous growth.
JL: It is an economically sensible and sensitive idea.
PS: Yes. The value of what we are doing works on both the tangible and the intangible sides, because it combines both economics and sentiment, two things that are usually not mentioned in the same sentence.
JL: What original ideas have you put into play that have created Demeure's competitive differentiators from other vacation clubs or associations?
PS: First, we don’t see them as competitors at all! We see an opportunity to extend the marketplace and our platform, our patent pending MMS or marketplace management system, to everyone. Vacation clubs and associations can derive significant benefit from plugging into the MMS and driving value to their customers, whether they are buyers or sellers. In contrast, the first generation of travel online was not focused on this type of value creation. Online travel sites have been focused predominantly on monetization of data (selling ads, more or less) and could be classified as single-sided marketplaces. But if buyers and sellers come together in a multi-sided marketplace, we believe that value will find the rightful recipients. Our growth to date is indicative of our confidence about this.
JL: So what role does Demeure play in all this?
PS: So, our role is, in essence, to put the private properties, hotels and other assets in a pool, find a fair way to value them, and then the owners would make available what they would want to. But then, we asked, in addition to how a property owner could realize value on their asset, how we create a level of demand for those assets and from those who own the assets? Can we take those who wanted and expected a high level of significant service experience and make it better? Well, yes we can.
JL: How did Demeure’s destination club connections allow you to better answer this last question?
PS: We dealt with the destination club experience in 2010,and came to understand a significant thing: that no matter how many challenges they had, how many fissures were in the original system, the members still wanted the reality of the great, seamless vacation. Which is what we wanted to provide them. Service provisions were and are crucial to the success of our mission and vision, as they create truly engaged, loyal customers. And, as I said, many of the best service providers are travel agents and property managers. They know most about the destination and the asset itself.
JL: So, how would your platform work with fractionals?
PS: We are now dealing with a fractional exchange, and in using our platform, we can now take those customers also, to the next level of greater service options. As an example of how we are doing this, let’s say I own a company whose customers own fractions and exchanges them. I go to the Demeure website and see how buyers and sellers work together in a marketplace. And if I could drop my company ideas in, allowing the Demeure platform to create more value, I could create a more engaged clientele. If I could add all of the Demeure service choices for a fraction of the cost, why wouldn’t I do this?
JL: And with destination clubs?
PS: Yes. Let’s say an equity-based destination club, where all the members own the assets or a right to use. They were all investors together and they all said it makes economic sense, but when they looked on the Demeure site and saw we could introduce MORE choices, without the incremental cost of buying another house or 400 properties. If they could add all of those choices for a fraction of the cost, why wouldn’t they do this?
JL: And with hotels?
PS: The Demeure platform, with all of its ‘yield management’ services, brings this kind of value to hotels also, because if the customer knows he is getting the greatest value and the most for his money, he will return to that hotel again and again. We help create a level of customer engagement and retention that underscores their trust and loyalty.
JL: How do you see the fluidity of the Internet working in your favor, in 2013 and beyond?
PS: Well, I see that the Internet has in a sense, democratized data substantially. We have been provided a type of ideological fluidity that can move toward greater transparency of explanation of consumer wants and needs. The Demeure platform can meet everyone in the middle, no matter who they are: property owners, hoteliers, consumers, property managers, travel agents, private jet and yacht agents, or interested people just looking to take a trip and wanting the most value for their money. In all cases, we aren’t changing what’s there, we are adding to their options. You add to, you don't change; being cooperative, not competitive, gets you further, especially in our new collaborative economy.
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