Monetizing your house

The Rise of Peer to Peer Sharing and Rentals

2011-02-07T21:18:00.000-08:00

Whether we recognize it or not, the American culture of consumerism is profoundly changing. Innovative peer to peer (P2P) technologies are giving up-start companies a set of tools to disrupt traditional forms of Business-to-Consumer (B2C) commerce. New payment technologies such as PayPal's Adaptive Payments system allow website developers to create marketplaces where people can rent or share virtually anything with anybody.

The future impact of these technologies may be difficult to gauge now, but they epitomize the basic premise of the discipline of economics: the efficient allocation of resources. After all, why should you own a step ladder if you only use it once a year when someone in your neighborhood or apartment building owns a ladder that your could borrow or rent? Until recently, it would have been nearly impossible to efficiently discover who in your area owned a ladder for you to use or rent. Plus, the P2P technologies to facilitate such transactions didn't so much as exist beyond auction and classified sites such as eBay and Craigslist.

However, new sites such as www.getaround.com and www.relayrides.com allow you to rent someone's unused car in California, and it's perfectly legal to do so given the recent changes in insurance laws in the state. These sites could have as significant of an impact on the traditional rental car companies and auto manufacturers as Google had on the publishing and newspaper businesses. My own experience with the car sharing service www.zipcar.com is a great example of how people can sell their cars and use car sharing services to locate and rent a car by the hour in the neighborhood. I owned a car that I used only 5-10 hours a month. That level of utilization is not only a huge waste of money ($275/month for a garage and $200/month for insurance), but it's a total waste of resources (metal, plastic, rubber, etc). Zipcars are utilized up to 80% of their physical capacity. This is the efficient allocation of resources at play, and it's good for me, better for the environment, and good for commerce to boot.

Sites such as www.rentalic.com allow you to list and rent your unused tools, law mower, and other household items. Our site, Sherpa Travel Exchange, allows people to rent their unused living space to travelers through a secure P2P online booking system using the latest Adaptive Payments technologies. All of these sites enable people to more efficiently allocate resources; whether those resources by lodging space (as in the case of Sherpa), household goods or your under-utilized Honda Civic in your driveway. The people who own the stuff make money from their stuff and the people that don't own the good or service benefit by paying only for what the need.

Thirteen years ago many people thought selling your items to complete strangers over the Internet was a crazy idea. Today, eBay is a multi-billion dollar business. Underscoring the success of sites like eBay and many of the new generation of P2P start-ups is the fact that these website operators offer the mechanism that is most essential to their survival and grown: ratings and reviews systems. Such systems engender trust and reliability and remove risk and uncertainty from the transaction. Ratings and reviews sites such as Yelp and TripAdvisor now permeate much of retail, travel and hospitality services, respectively. At the same time, the Better Business Bureau and the Gallup Organization recently found that 47% of consumers stated that they had "some, very little, or no trust at all" in companies that they do business with in everyday life. (Source found here) As our trust in companies erodes, we are beginning to trust complete strangers more and more.

P2P Sharing Goes Mainstream

Environmentally speaking, the impact of the new crop of P2P sites may impact the natural resource constraints that are so often an inconvenient truth about our modern society. Rachel Botsman's excellent book entitled What's Mine Is Yours: The Rise of Collaborative Consumption cites an interesting and chilling anecdote; that is, if everyone in the world lived like an average middle-class American, we would need five times more resources that actually exist on our planet. Frightening indeed. Folks, the planet's population ain't shrinking! So, we must find ways to more efficiently allocate the existing resources, goods and services we have at our disposal or face a future driven by unnecessary scarcity as the people within places like China, Brazil and India ascend to ever higher standards of living. Collaborative Consumption is not just a fad. In fact, Collaborative Consumption was listed as one of Time Magazine's top 10 sustainable trends.

If you're interested in learning even more about how P2P sharing business models are changing commerce, you can also check out an excellent new book by Lisa Gansky entitled The Mesh: the Future of Business is Sharing.

Safe travels,

Russ

National Parks Pass - Another Way to Stretch a Dollar

2010-05-10T10:14:00.000-07:00

The financial crisis, the housing crisis and the jobs crisis have made things very tough over the last 18 months for many families. Most people have to figure out how to do more, with less income, while still dealing with general instability. That said, life does not stop; people still have to find something to do to fill their weekends and vacations. The trick is figuring out something that will not break the bank, in addition to finding inexpensive ways to travel or lodge. My suggestion; visit the National Parks and Monuments of the United States. That is exactly what I did with my family over Spring Break this year.

We decided to take a week and visit the Grand Canyon, Bryce Canyon and Zion Canyon; called the Canyon Loop by some, as you can visit all three by driving in a big circle. While doing our research we discovered that the entrance fee for all of the parks was about $25 per vehicle. Doing some quick Math, we figured out that we could spend another $5 ($80 total) and get an annual pass for all 462 National Parks and Monuments in the country. Not only was this a no-brainer, for this one week trip, it really makes sense for everyone to do. Consider this; many of us live within an hour of at least 1 National Park or Monument.

With 52 weekends in a year, traveling an hour or two is nothing when trying to entertain the kids, or impress a person you just started dating. Now add, at least, 2 weeks of vacation and a number of national holidays each year, and most of us have the chance to drive the few hours it would take to reach far more than 3 parks or monuments in a year. When you consider dinner and a movie is going to run you at least $40, an annual pass to see some of the most amazing things on the planet for $80 is a drop in the bucket.

We started our trip at the Grand Canyon, looped up to Bryce for two days, and came back to finish in Zion. We flew to Las Vegas where we rented a van to start the first leg of our trip and spent the next week driving the Canyon Loop to all three parks. During the 7 days and 15 hours of driving, we came within an hour of 7 additional National Parks and Monuments that our annual pass would have gotten us access to. Take a look at Google Maps the next time you are planning a vacation, I am sure your route will take you within a stone’s throw of a few parks yourself.

The America the Beautiful National Park Pass is very easy to obtain. You can order it on-line at this link: http://store.usgs.gov/pass/index.html. Or, to make sure you squeeze every day out of your pass, you can pick one up at the entrance of the first park you visit. In addition to the America the Beautiful Pass, there is also a great deal for seniors. For just $10, seniors (age 62 and older) can obtain the America the Beautiful Senior Pass. This is a lifetime pass for all National Parks and Monuments. My father in law has this pass and uses it often.

What does the pass get you? In addition to covering the park entrance, there are a number of additional benefits the pass offers. Some of these benefits include Ranger Walks, Special Park Shows, Park Museums and access to park trams and busses which we used in Zion. The Pass is good for 3 adults (related or not) in areas that require a per person fee, and will get 2 motorcycles into the park of your choice. The pass gains you access to federal lands run by the following agencies:

Bureau of Land Management http://www.blm.gov
Bureau of Reclamation http://www.usbr.gov
Fish & Wildlife Service http://www.fws.gov
USDA Forest Service http://www.fs.fed.us
National Park Service http://www.nps.gov
Federal Recreation lands http://www.recreation.gov
National Atlas (lands maps) http://www.nationalatlas.gov/printable.html#fedlands

Not only is the National Parks pass a great deal for individuals and families, it is a great way to chip in and help keep these parks open for continued enjoyment. These rough economic times that are affecting each of us are also affecting these beautiful parks. We cannot trust our politicians to keep these places open during rough times. However, the purchase of a National Parks Pass by a few of us can help to guarantee continued enjoyment of these beautiful places for all of us. Personally, I plan on using my annual pass to visit Pinnacles National Park and Yosemite before my year ends. I really hope you will consider one also.

Darrin Underwood
Contributor
Sherpa Travel Exchange

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$3 Diet Cokes and Volcanoes... and Government Regulation

2010-04-29T09:02:00.000-07:00

The recent, and largely unpronounceable, Icelandic volcano eruption got me thinking about just how wacky the airline business has become. True, commercial airlines have perhaps the most unattractive business model of them all. I mean, you have to contend with airplanes that cost millions of dollars a month to lease, fluctuating fuel prices, huge labor costs, unions, disgruntled employees, and a customer base that's almost always in a hurry. That's a recipe for unhappy customers. Why anyone would want to start a commercial airline is beyond me (I'm looking at you Jet Blue). The risk vs. reward just isn't there.

Maybe their backwards business model makes it hard for the airlines to find clear thinking business analysts. Case in point, the $3 Diet Coke. Most of us can remember a time when the flight attendants passed out bags of pretzels and peanuts as if they were in endless supply. We didn't question the generosity because deep down we all knew that we were paying for those peanuts and 8 ounce beverages. We should have seen the writing on the wall when we were asked to pay to stay warm ($7 blankets!). But no, they just had to push us to the brink of exasperation.

Well, that happened to me on a recent Delta flight to Atlanta where I was prompted for $3 for my Diet Coke. I hadn't flown on Delta for quite some time. Being from California, I generally fly Southwest everywhere, where your 8 oz. beverage is included in the cost of your flight. I couldn't believe I was being asked to pay for a Diet Coke. It just didn't make sense. So, I got to thinking about how a big business that, presumably, employs lots of smart people could make such a dumb decision as to charge their passengers for a beverage when most other airlines don't charge.

This got me thinking about Customer Lifetime Value (CLV). A frequent flyer, such as myself, can be extremely valuable to an airline. Hence, all the frequent flyer/rewards programs. Let's just say that my CLV is $500k to an airline like Delta. Just how many $3 Diet Cokes do you need to sell to replace me as a lifetime customer? I'll tell you. You need to sell at least 166,666 Diet Cokes to replace ONE customer who has defected to another airline due to this violation of my perceived rights to a beverage. That's right, you need to sell almost 200,000 Diet Cokes to replace *one* customer. This doesn't even take into account the costs associated with procuring the Diet Coke from their supplier and the labor costs associated with transporting and delivering the Diet Coke to my cramped airline seat. When you account for those costs, Delta might need to sell more than 400k Diet Cokes to replace me as a customer.

When I asked a Delta representative for an explanation, he made the classy move (sic) of essentially blaming the customers for this change. In so many words he said that the price sensitivity of airline travelers and the high competition makes every dollar on the quoted fare price to be critically important. There's got to be a better way to streamline costs without having to nickle and dime passengers who expect a beverage to be included in their fare cost. RyanAir in Europe is completely transparent about their pricing model. You pay for everything and you might even be bombarded with advertising on the plane. In exchange, you can buy tickets from Dublin to Rome for less than $50. That seems like a more customer friendly model.

With all the talk here in America about "big government" and the perils of market regulation, I can't help but thinking that the romanticism of flying died after airlines were deregulated and allowed to run each other out of business. Maybe regulated markets are so bad after all. That is, as long as I get my Diet Coke at no additional cost...

Russ

Russ Hearl
CEO & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

www.staysherpa.com

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The "Social Rush": How Twitter and Facebook change social travel (Part 1 of 3)

2010-03-22T19:52:00.000-07:00

By Russ Hearl, CEO and Co-Founder, Sherpa Travel Exchange, http://www.staysherpa.com/

This is the first post in a three part series on the intersection of travel and social networking.

Is it just me or does it seem like everyone and their brother is claiming to be a social media "expert"? Just because one uses Facebook or Twitter doesn't make that person an expert. Individuals and businesses are rapidly trying to figure out how to "leverage" the power of the social networks. Candidly, this means they are trying to figure out how to market and sell you stuff now that they know a whole lot more about you than they could have ever known prior to you providing such wonderful information about your likes/dislikes and general whereabouts.

Like the California Gold Rush, there's now what I call a "Social Rush" of enterprising intermediaries attempting to stake their claim in the social travel landscape. It's been said that very few of the gold crazed 49ers became rich from their prospecting efforts. Rather, the entrepreneurs that provided the implements with which to search for gold (such as pix axes, shovels, hotels and food) were the ones to actually strike it rich and set the stage for a dramatically altered economic landscape.

A similar phenomena is playing out in the social travel space (By my definition, social travel is the intersection of community and travel). Fortunately for us travelers there are dozens, if not hundreds, of businesses being started at this moment that seek to provide the foundation and value added services needed to increase the availability of supply while driving down prices. In the end, the real winners will be the travelers who benefit from a greater variety of travel accommodations and destination services at a far lower cost. The burgeoning social travel movement will make travel generally more affordable around the world and will enable greater numbers of people to explore this amazing planet.

Let's first discuss the democratization of markets and how social travel will democratize established institutions:

The efficiency and productivity gains brought by the internet touched almost every corner of our post-industrial society. Unfettered and free access to information has proven to be the great equalizer that has broken down bureaucratic silos and even the most militaristic of institutional hierarchies. It would be hard to argue against the fact that the internet has squashed outdated business models and reduced barriers to entry; thereby allowing enterprising people to reach huge audiences through the distribution power of the internet.

YouTube offers the most visible example of the democratization of markets. YouTube wasn't the first user-generated video site, but it quickly became the most widely used because it gave video content providers an open platform for distribution. Before long, anyone with a camera could broadcast their video and quickly build a massive audience.

"Deal of the day" sites also built massive audiences in unbelievably short periods of time. Groupon, for example, started in late 2008 and is rumored to have more than 2 million members receiving deals of the day via email. This $100 million business was built virtually overnight through crowdsourcing. Zynga is another great example of a business that was built entirely on the backs of the social networks. Their inescapable and addictive FarmVille and MafiaWars game are a ubiquitous reminder of just how rapidly a business can scale an audience when they leverage an open platform distribution technology like Facebook or Twitter. There's never been a point in history where the "little guy" had so much power to democratize markets and build a significant following.

Social travel has manifested itself in community-oriented sites like Couchsurfing, GlobalFreeloaders and Tripping.com to name a few. These sites offer hosts and travelers an opportunity to engage in a cultural/hospitality exchange for little to no money. I've used all three sites and think they're really great, but they risk falling victim to the same problems that beset computing giants such as DEC and Sun: Proprietary standards and walled-garden technologies lead people to search for ways to break down those walls.

This is where the massive distribution power and reach of sites like Facebook and Twitter have the opportunity to transcend mere content syndication used by most social travel sites in the name of 'viral marketing.' Simply offering apps via the social networks to enable travelers to book a flight or find a couch to crash on is not enough and really only supports a quasi-walled garden approach to serving a massive market for travel services. Ultimately, I believe stand-alone social travel networks will be usurped by more organic, open communities that are accessible from all corners of the internet, rather than via a destination site.

Part two of this three part series on social travel will discuss how innovative entrepreneurs are building organic social networks as a way to dramatically increase the size of the social travel distribution pipe.

Russ Hearl

CEO & Co-Founder

Sherpa Travel Exchange, LLC

601 Van Ness Ave, Suite E-208

San Francisco, CA 94102

russ.hearl@staysherpa.com

http://www.staysherpa.com/

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Travel Review Sites: Moral Hazard Ahead

2010-03-01T20:34:00.000-08:00

By Russ Hearl, CEO and Co-Founder, Sherpa Travel Exchange, LLC

"Trust me." "To be honest with you."

Have you ever noticed that these prefacing statements are often precursors to a tall-tale? Well, when it comes to endorsements (or indictments, for that matter) of travel experiences it becomes equally difficult to separate fact from fiction.

User generated and social travel review sites such as TripAdvisor and HotelChatter have become mainstream options for travelers seeking a third-party review of airlines, car rental companies, tour operators, hotels, and vacation rentals, to name a few. Millions of people use these sites to obtain a less biased review than they would get by looking at a travel services supplier website or brochure.

But, how un-biased are these sites in reality?

It's a question that we should all ask ourselves. After all, many of these sites are supported by advertising revenues. This applies a not-so-insignificant amount of pressure on the site operators/businesspeople to make sure the people paying the bills are happy. I know this may sound cynical, but as a former advertising executive myself, I can tell you that there is a significant moral hazard present in advertising supported businesses. Lest we think that the big, colorful real estate section in our local newspaper is there because the editor just couldn't wait to tell you about the new sub-division opening up on the other side of town. I have friends in the newspaper business that tell me a meaningful portion of the content is written to garner paid advertisements. So ask yourself - Is it real news or bait to lure-in advertisers?

When it comes to review sites, how trustworthy is the 5-star aggregate score for the service provider in question? Case in point, Yelp was hit with a class action lawsuit alledging that they are really running an extortion scheme. The lawsuit was filed on behalf of a collection of local businesses that alledge Yelp promises to remove negative comments about their businesses only if they agree to pay a monthly advertising fee. Whoa. If that's true it really makes you wonder whether you're actually getting reviews of real exerpeinces or just the positive ones. Anyone that has used Yelp knows that there's no shortage of inflammatory reviews of service providers. Many of the negative reviews are actually really funny, but most are plain outrageous and could be considered libelous in some jurisdictions.

Forrester Research examined the motivations of travelers that read and wrote reviews of travel experiences. The research found that 21% of travelers had read reviews on travel review sites like TripAdvisor in the previous 12 months in order to make travel purchase decsisions. The research also found that:

19% of the travelers who responded said that they left a review because they were told they would be entered into a drawing for a prize or would receive some form of compensation for submitting a review.
27% said they wanted to warn others about a bad experience.
48% said they wanted to share a good experience with others.

Overall, more than 6 in 10 U.S. leisure travelers were found to regularly participate in travel-focused social media activities like rating a hotel. Clearly, travelers like to tell almost anyone about our experiences (witness the 50,000+ travel blogs).

Indeed, many marketers would argue that the revolutionary impact of the social networks and user generated content sites (like travel review sites) is embodied in the ability to inspire, monitor and, (cough, ahem!) control word of mouth marketing. Of course, the transparency offered by social networks can cut both ways. As travelers, we ought to question the credibility and integrity of some of the advertising supported review sites. Perhaps a more faithful representation of travel experiences could be gained by polling your own social networks using a Facebook poll or some sort of survey. But even then it would be difficult to gain a large enough sample size or let alone locate anyone within your network that has purchased or consumed services from a provider in your intended destination.

Despite the moral hazard, review sites might still over the best solution in the market for obtaining fast background checks on potential service providers.

How about you? Do you trust these review sites?

Russ

Russ Hearl
CEO & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave., Suite E208
San Francisco, CA 94012
http://www.staysherpa.com/

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It's been a while...

2010-01-27T15:33:00.000-08:00

I know, I know. It's been forever since I've posted anything. We've just been really busy on a number of fronts, including lots of traveling and staying in lots of hotels. Which got me thinking...

Ask nearly anyone who travels for business and they will probably tell you that business travel sucks. Traveling for business is not at all as fun as it sounds. No matter the how large the expense account and no matter how great it may sound to eat out at nice restaurants every night, the hassles and inconveniences constantly levied by the airlines, your grill being four inches from the back of some dude's head in United Economy, crazy taxi drivers, distant car rental lots, and dirty hotels can cancel out those aforementioned perceived benefits. I'm not generally a complainer- I just lower my expectations and take one for the team, as it were. The funny thing is, when I started traveling on business 12 years ago I really looked forward to getting on the road. Some romantic notion of flying on airplanes and hotel room service seemed to have clouded my thinking.

This week I've stayed at two hotels which claim to have been awareded the 4-Diamond distinction. Both hotels lost my reservation, didn't have my frequent guest rewards card number on my reservation and both checked me into rooms that were allegedly "clean" but were much dirtier than my own bedroom (which isn't THAT clean). Above all else, I felt like a stranger in both of the cities I've visited this week and I couldn't seem to get good directions or recommendations from the bell stand.

Speaking of dirty hotels, the Huffington Post released this expose yesterday...

The home based lodging movement aims to make travel much more accessible and authentic by empowering homeowners and property managers with the ability to compete with hotels for paying guests. For those people that question why would anyone want to allow a stranger to stay in their home, you need look no further than the fact that businesses such as HomeAway.com and even free classifieds and accommodations sites like Craigslist and Couchsurfing.org have become exceptionally popular. One of our competitors is even launching an integrated marketing campaign that includes a 30 second Super Bowl commercial. This demonstrates that there's a lot of growth potential in this space and will prove to be a viable and growing alternative to hotels in the future.

Until next time... Travel safe.

Russ

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
http://www.staysherpa.com/

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The real unemployment rate

2009-12-04T13:47:00.001-08:00

Today, the U.S. Bureau of Labor Statistics reported that the U.S. economy lost a paltry 11,000 jobs. With all the fanfare, you would have thought that there was some reason to celebrate. Far from it.

Sure, we're no longer losing jobs at the same pace as at the beginning of the Great Recession, but one in ten people in the labor force is still out of work. Of the 165 million people in the labor pool, that's 16.5 million people that are out of work that are looking for a job and just can't find one. But it's a lot worse than that... The Bureau of Labor Statistics doesn't count people who are employed in part-time jobs to make ends meet or people who are considered to be "discoraged job seekers" and have stopped looking for work altogether - presumably because any family of four can eat off of the $800 subsidy paid twice a month. Yeah, that is, if you like to feed your kids ramen noodles three times a day.

The reality is that our economy, and our labor market, is in shambles. The real unemployment rate is closer to 17.5% when you factor in all the people that have stopped looking or have taken on part-time work just to make a few extra bucks. That's another 12 million people that can't find suitable full-time work. At a "full-employment" rate of 5% unemployment, our economy would have about 8 million unemployed people. There's nearly 20 million more people unemployed than there was when our economy was at full employment a couple years ago. That's freightening.

So, what's one to do if they can't find full-time work or refuses to don the orange apron at Home Depot or the blue apron at Wal-Mart for 25 hours a week and no benefits? Well, many people have turned to eBay to sell there stuff. In the last year, the number of online auctions on eBay has more than doubled. The average daily auction volume in August, 2008 was 15 million auctions. In November, 2009 it was close to 35 million. eBay is as popular as ever because it's a great place for people to make some extra cash. People are selling their stuff in droves.

The unemployed and underemployed are also turning to direct selling and Multi-Level marketing companies in droves. Amway, Tupperware and Avon have all experienced record growth in the ranks of their agents/salespeople. When times are tough, Americans become ultra resourceful. Door to door selling is even making a comeback. Who would've thought? I guess if people aren't at a job, then they're at home, so why not...

Speaking of resourceful, people are also getting into the hospitality business. I recently counted the number of short-term rooms for rent posted on Craigslist. These are rooms for rent by the day - not by the month or by the year. These are people looking to make a few extra bucks by providing lodging services to travelers. I found that on a typical weekday there are more than 1,000 new ads posted for short-term rooms for rent. This is more than double the number from just a year ago. Craigslist lacks essential security features to make it a fully functioning lodiging classifieds site, yet people are willing to take the risk to make a few extra bucks by renting out their extra space to travelers.

Americans possess an unprecendented amount of unused space in their homes. Resourceful people all around the country are learning that they can monetize their unused living space by getting into the hospitality/lodging business. People are running make-shift B&Bs as a way to avoid foreclosure. Not a bad idea if you ask me...

Mint.com posted a humorous video that discusses the real unemployment rate on YouTube.

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

Stay Smart. Stay Sherpa.

Project update

2009-12-01T08:32:00.000-08:00

Hi everyone, it's been a while since my last post, so I thought I'd drop you a line to let you know what we've been up to. In the last month we've made considerable progress in building the Sherpa home based lodging marketplace. Designing and developing a complex product like this is challenging when you consider that we're building it for mass market adoption. During the last month we found a great software engineer, nearly completed the front-end design of the site and have been hard at work at programming the interface. We also participated in a VC competition that gave us many more ideas to enhance Sherpa's product ease of use and competitive advantage.

Simultaneously, we are ramping up our sales and marketing activities to line up key partnerships that will be important participants in our launch. We are also hard at work building an inventory of great homestays, B&Bs, vacation rentals and home exchange properties.

The early 2010 launch of Sherpa couldn't come at a better time. People around the world are struggling through this difficult recession and are in need of a life- line. Sherpa will extend a life-line to millions of people by providing them with a way to market their extra living space to travelers in search of a more authentic and personal travel experience. Homeowners and tenants around the world possess an unbelievable amount of unused space that can be monetized by accommodating travelers. With real unemployement hovering around 17.5% in the U.S., many people are looking for new and innovative ways to make some extra cash as they seek their next full-time job or work their way through an educational program that will help them change careers.

Over 50 million trips were booked this year in the U.S. alone where the accommodation type was someone else's home... and not a hotel. That includes vacation rentals, B&Bs, homestays and home exchanges. We're building a product, and a company, that is going to help millions of homeowners get into this market and compete for these paying guests. We welcome your feedback and questions.

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com
www.sherpatravelexchange.com

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Home based lodging: A recession proof business

2009-11-06T10:22:00.000-08:00

The last couple weeks I've been presenting and pitching Sherpa Travel Exchange to investors, potential vendors and just about anyone that will listen to me. Sometimes people have an instinctive reaction to the concept of home based lodging (housing paying guests in your primary or secondary home). The home based lodging market is a lot more than just 22 year olds backpacking around and crashing on each other's couches (ala Couchsurfing.org). This market consists of any type of lodging services provided in one's own home as opposed to a hotel, including: B&Bs, Homestays and Home Exchanges.

The market is actually a $5B+ market in the U.S. alone. With respect to B&Bs, the Professional Association of Innkeepers International cites more than 17,000 B&Bs in the U.S. generating more than $3.4B in revenue. Millions of people each year stay at B&Bs, while the owners sleep in a room nearby. Many consider B&Bs to offer a more authentic local experience than hotels. We agree. Which is why B&Bs will be a major component Sherpa - not only existing B&Bs, but enabling ordinary homeowners to create a make-shift B&B in their own homes to earn some extra cash. The B&B market niche as a whole has proven to be recession proof as money conscious travelers seek more affordable alternatives to boring, sterile and expensive hotel rooms.

I did a quick scan of Craiglist yesterday and found more than 500 new listings posted that were advertising rooms for rent by the day in someones home. Yes, there are lots of people that want to earn a few extra bucks by taking in paying guests. For many of these people it's a better alternative to getting a full-time roommate. But, for all the great things you can do on Craigslist, it lacks important peer to peer reviews of hosts and guests, online booking, background records and other critical pieces of information most people would require to feel comfortable running a make-shift home based hotel/B&B. We are creating some exciting innovations in this regard. Stay tuned...

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

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Sherpas aid in fight against global warming

2009-11-02T20:04:00.000-08:00

Check out how Sherpas are guiding a delegation of scientists and policy-makers up Mt. Everest to Base Camp...

http://www.fresnobee.com/world/story/1695297.html

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

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Hostage – At The Mercy of the Hotel Giants

2009-10-31T14:33:00.000-07:00

Last Spring, I took my 12 year old son up to Reno to play in a 3 day basketball tournament. This meant that I had to find a room for us to stay in. There were not many hotels that were walking distance from the basketball venue, so we were stuck with the decision of staying far away which meant driving through traffic to each game and paying for parking each time, or staying at the adjacent hotel and being left at their mercy regarding price and accommodations. In order to get a good price, I had to play the old hotel game of booking a room, checking pricing every day, and being prepared to cancel and re-book when the price came down. I also had to worry about the room I would end up in.

I later came to find out that this was a small, run down and bed bug invested hovel standing in the parking lot of the main hotel. It was easy to see that the hotel considered people in these accommodations to be second-class citizens. Reading the reviews also led me to another conclusion. The Motor Lodge was just a ruse to get people into the hotel. When people actually arrived and saw how bad it was, they immediately complained and asked for an upgrade. And, for an additional fee, the hotel would accommodate them. I, personally, thought it was misleading and out right robbery.

Well, let me tell you. Hotels are designed to be at or close to capacity at all times in order to meet their revenue goals. This means they will do anything they can think of to bring in more money. Second, the hotel industry has gotten away with having no real competition for years. Taking a look at the numbers, there are about 4.4 million hotel rooms in the United States. Matching this with the fact that hotels like to stay close to 70% full or more, means whenever it is believed a hotel can attain a profitable occupancy rate, one is built. In short, whenever hotel occupancy rates are good, the hotels are free to treat people like trash, because they know they will make their money any way. However, when occupancy rates fall, the hotels are forced to treat their customers better.

Try a Homestay. Yes, you heard right. More and more people are staying in other people’s homes when they take a trip. The accommodations are often better, the price is always better, and your options are unlimited. That is, if you can find a good source for Homestays. That is where companies like Sherpa Travel Exchange come into play. Sherpa will soon be offering a “Travel Exchange” focused on Homestays, Home Exchanges and Vacation Rentals. With 60 million homes in the United States, and 90 million vacant rooms, the inventory potential is huge. If just 5% of the available rooms were up for rent, the number of rooms available to travelers would double. Now this is something that would get the hotel industries attention.

So, my advice to you is to not get caught up in the games of the hotel giants. Don’t get stuck, like a hostage, at the check-in counter asking for a better room because they will stick you in a dump while they wait for you to beg and pay for a better room. Think about a Homestay and get treated like a real person by a knowledgeable local host the next time you travel. Until next time, happy travels.

Darrin Underwood

Contributor

Sherpa Travel Exchange

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What is a Sherpa?

2009-10-22T17:45:00.000-07:00

I thought you’d never ask.

Sherpa is a Tibetan word that stands for “eastern people.” The Sherpa people are an ethnic group living high up in the Himalayas in Nepal and parts of India. People commonly refer to a Sherpa when they speak of mountaineering porters and guides that escort adventurous hikers up the treacherous slopes of Mt. Everest. Stories such as “Into Thin Air” by Jon Krakauer depict Sherpa mountain guides as trustworthy, knowledgeable and tough as an ox. Sherpas are renown by the international climbing community for their expertise and experience at high altitudes. For all the stores about Sir Edmund Hillary’s first recorded Mt. Everest ascent, stories about the heroic life-saving efforts of Sherpas are few and far between. Nevertheless, climbers couldn’t scale the icy slopes without the intimate local knowledge of their Sherpa guides. Sherpas are the unsung heroes of mountaineering.

Sherpa Facts

Official language: Dialect of Central Tibetan.
Population: The 2001 Census in Nepal counted 154,622 Sherpas. Sherpas also live in the Darjeeling and Kalimpong in India.
Traditional Clothing: Robe-like garments made of woven woolen cloth known as “Chuba” are worn by Sherpas to keep warm in the harsh winter climate.
Interesting Factoid: In May, 2009, Apa Sherpa successfully climbed Mt. Everest for the 19th time.

Why “Sherpa” Travel Exchange?

We thought about calling our innovative new company Scooby-Doo Travel Exchange or some highly descriptive utilitarian name like Rentyourextraspace.com, but we just didn’t think those names exuded any character or embodied the ethos of the company and its Founders. So, we decided to create a modern, contemporary brand around the Sherpa mascot and the values that Sherpas represent to their patrons and the larger Himalayan community. From a business standpoint, we think an engaging, humorous and helpful Sherpa mascot gives us a chance to differentiate ourselves from current and future competitors. So, we named our mascot “Lucky the Sherpa” because we think that if you use Sherpa Travel Exchange that you will “Get Lucky” by spending less on travel or avoiding lodging costs altogether through our Sherpa Home Exchange program.

Thank you for visiting Sherpa Travel Exchange and may your journey be safe, rewarding and memorable.

Sincerely,

The Sherpa Travel Exchange Team

Couchsurfing

2009-10-22T08:49:00.000-07:00

Earlier this year I took some time out to travel the world. I met amazing people with whom I shared memorable experiences. However, I couldn't help but wonder whether I was getting the *real* feel of the cultures of the cities and countries that I had visited or some commercialized facsimile. Nearly two months into my trip I met some travelers in their early 20s while traveling through Switzerland. When I asked what hotel or hostel they were staying at they said they weren't staying at any hotels or hostels on their 6 month trek. Puzzled, I asked them if they were camping. They told me they were "couchsurfing." They continued to say that they joined the Couchsufring.org project so they could avoid spending money on hotels and hostels by crashing on someone's proverbial couch (in most cases, someone's extra bedroom).

Intrigued, I decided to check this out by visiting Couchsurfing.org. I was surprised to see that Couchsurfing has more than 1.4 million members from around the world and they have facilitated millions of cultural exchanges. The leaders of the Couchsurfing project states that the goal of Couchsurfing is to foster cultural exchange, goodwill and understanding. This simple concept has really taken off and Couchsurfing is experiencing a meteoric rise in memberships.

I subscribe to several blog feeds through Google Alerts, and judging by the sheer volume of people writing about Couchsurfing experiences, I would say that it represents a a significant sea change in the hotel business. I'm not saying that Couchsurfing is for everyone, because it clearly favors the adventurous. Couchsurfing is great for those people who favor an authentic cultural experience rather than a run of the mill tourist experience provided by most hotels and resorts. I used to work in the hotel industry and many of the hotels receive kick-backs from local restaurants and attractions for referrals. So, you gotta wonder if you are getting legitimate recommendations from a hotel concierge or front desk clerk.

Here's a good article that speaks to the virtues of Couchsurfing.

http://wildcat.arizona.edu/wildlife/students-build-global-community-by-hosting-strangers-on-couches-1.794753

Couchsurfing aside, the U.S. Census Bureau's American Community Survey found a 9.8 percent rise in cohabitation in the U.S. during the last year. Driven by higher unemployment and foreclosures, people are deciding to take in roommates or share their homes. Sherpa will help ordinary homeowners monetize their unused space by competing with hotels for paying guests. With more than 90 million unused rooms in American households, we think Sherpa has a good chance at doubling the lodging supply in the U.S. by helping people monetize their unused rooms. Stay tuned...

Russ

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

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What Should I Do With My Timeshare?

2009-10-19T12:55:00.001-07:00

What should I do with my timeshare?

That is the question facing thousands of people these days, especially with the downturn in the economy. Nobody wants to sell their timeshare for ½ of what they paid for it, but that may be the best thing to do. Let’s do the math. Say you paid $16,000 for your timeshare, and you are paying $600 a year for maintenance. Let’s also say that you can only sell your timeshare for $8,000. That means that you would lose $8,000 right? Not necessarily. At $600 a year for maintenance, you will pay almost $8,000 in $13 years (not including banking and timeshare location switching fees). If, however, you keep your timeshare for the next 20 to 30 years, you will pay $12,000 to $18,000 in maintenance fees; and that is if the fees do not go up. Yet, your timeshare will not be worth much, if any more money. So, my short answer is, sell it.

What if I don’t want to sell? Well, if you do not want to sell, then my suggestion would be to quit banking it through your timeshare management company. These companies charge up to $300 membership and another $150 transaction fee each time you want to travel to a different destination than the original purchase. Not only is it expensive, it is also difficult to find places, through your timeshare management company, that you really want to visit. Well, what should I do? Read on.

Whether you decide to sell your timeshare or keep it, you can save money and increase your travel options by finding someone to exchange your home or timeshare with that is located in the destination you want to travel to. Yes, you heard me, exchange your home or timeshare. Thousands of people are doing it these days and virtually staying for free all around the world. Websites like Sherpa Travel Exchange www.staysherpa.com have created a travel exchange that brings together interested parties for Home Exchanges, HomeStays and Vacation Rentals. The great thing about exchanging your timeshare is that you no longer have to worry about banking it due to an impending expiration date. Instead, exchange it with another homeowner or property owner so they can use your place now, and you can use their place at a later date.

The concept for exchanging homes has existed for years. However, the rise in high-speed internet and social networking has made it easier for people of common interests to connect. Keep an eye open for “Lucky” the Sherpa as he develops an easy way for you to get the most out of your timeshare if you plan to keep it, or get the most out of your travel dollars if you plan to sell it. Either way, you can’t lose.

Darrin Underwood
Contributor
Sherpa Travel Exchange

Stay Smart. Stay Sherpa.

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Ponzis and Pyramids

2009-10-16T15:12:00.000-07:00

Congress is set to pass another extension to the Federal unemployment benefits program. Now that the nation is approaching 10% unemployment, our government believes its a good idea to continue to extend the safety net. The news of the unemployment benefits extension got me thinking about what people do to make ends meet when they are unemployed or under-employed. So, I looked at the Bureau of Labor Statistics site (www.bls.gov) and found that for everyone one person that's unemployed in the U.S., there's at least one person that considers themselves "under-employed". That translates to more than 33 million working adults that aren't able to work as much as they'd like to.

One only needs to look at eBay to see the fallout of prolonged unemployment. In August, 2008 there were 15 million average daily auctions on eBay. In August, 2009 there were 30 million average daily auctions on eBay. People are selling their stuff to generate cash to survive.

Desperate times call for desperate measures for millions of people.

We've been hearing a lot about Ponzi schemes lately and it got me thinking about how people get involved in both illegal Ponzi schemes and borderline illegal multi-level marketing pyramid companies like Amway. People are trying to make an extra buck or two, which is why MLM companies like Amway exist where the members recruit other agents, who recruit more agents with everyone making a cut of the sales by their recruits - all the way down the pyramid.

In case you're curious about the origins of the term "Ponzi" scheme, it actually has nothing to do with my hero, Fonzi. Of course, Fonzi was the the always cool ladies man who I so desperately want to be . Charles Ponzi was an Italian immigrant to the U.S. who's likeness is associated with the get rich quick scams that he is so infamously associated with. Investors seeking abnormally high returns make investments in a fund that oddly generates a much higher rate of return than typical funds. Eventually, the fund manager running the Ponzi scheme can no longer afford to pay out the returns and the fraud becomes apparent. If you're trying to augment your income, try and stay away from anything that sounds too good to be true. It might turn out to be a Ponzi scheme.

Some people turn to other get rich schemes they find on the internet like the ones that promise you can earn thousands of dollars per week from the comfort of your own home. All you have to do is make a small investment - which is often where you get fleeced. Some people sell Tupperware, Longaberger Baskets, or Pre-Paid Legal services
to try and make ends meet. All of these involve making a pretty significant investment in time and/or money to actually make a decent income.

Sherpa has an idea that we think will prove to be the best way to earn some extra cash. There are 67 million homeowners in the U.S. with over 90 million unused rooms. Sherpa is going to help homeowners monetize those unused rooms by listing these rooms as Homestays. SmithTravel Research reports there are 4.8 million hotel rooms in the U.S. If only 5% of the unused rooms inside American homes become monetized on Sherpa, the lodging supply in the U.S. will more than double. This dramatic increase in supply will provide millions of homeowners with additional income and will make travel more affordable for so many more people. In doing so, Sherpa will address the growing demand for travel and empower millions of people to augment their income and earn a decent living.

Russ

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

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Timeshares - Do The Math

2009-10-16T11:53:00.000-07:00

If I knew then what I know now…

When my wife and I got married 14 years ago, we took off to Hawaii to spend a week in Kona and a week in Kauai. Our accommodations were in a timeshare owned by my wife’s parents. Staying in a timeshare vs. a hotel made sense; we had multiple rooms, a kitchen for cooking and a BBQ outside. What more could you want? Well, staying in a timeshare does mean one thing for sure; sometime during your trip, you will be pitched on buying a timeshare also. We were no exception.

During our 2 hour timeshare presentation, we were told of the wonders of ownership, and how much money it could save vs. spending thousands every year on accommodations. We were also sold on how we could either sell it if needed, or pass it on to our children, like a summer home. We were also told that we could use our place to trade to hundreds of additional locations if we chose to. Needless to say, my wife and I, like thousands of other people, thought it sounded good. We figured we would start small and buy into 1 week every other year on a 1 bedroom place. Hey, as a bonus, they threw in an extra week for the first 10 years to make it a no-brainer.

It was not until later that we discovered the error of our ways. Doing the math and looking at the reality of the timeshare market really opened our eyes:

1. $7,500 buy in for 1 week every other year

2. Add $2,500 if you finance the transaction

3. $300 per year for maintenance fees

After 10 years, we had spent $13,000 to own a vacation that we had barely used. To top it off, our investment was worth about $3,000 on the open market. Hmmm, not the best use of our hard earned money.

The things that we did not think about were total cost of ownership, our future travel plans and alternatives to the timeshare. Total cost of ownership includes the cost of getting to a far away location for your vacation, and those darn maintenance fees, which really add up. As for future travel plans, what if we did not want to go to that condo on that island? Well, then, we were given the option to trade our place in, bank the days and use them elsewhere. Sounds easy, right? Wrong. There is actually a $300 fee associated with banking your place with the management company. Add to that, a $150 fee for each banking and switching transaction you do. Like something wrapped in aluminum foil and lost in the back of the refrigerator, this is starting to smell bad.

What could we have done? Well, one thing we could have done is saved our $13,000 plus, and swapped our home when we wanted to vacation. What? Swap your home? Yes, you heard me right. To our credit, the internet was not all that large and fast 14 years ago. Getting information was tough, and looking for a house swapping partner was a tough and inefficient process. Today, however, things are different. Companies like Sherpa Travel Exchange (http://www.sherpatravelexchange.com/) are putting together solutions to help travelers see the world for far less than was possible before. Don’t get me wrong, people have been exchanging their homes for years. The problem came from the lack of communication and ease of process needed to make it mainstream. This era of high speed and wide spread internet, along with the surge in social networking is changing the landscape. Finding a home exchange, a homestay, or a vacation rental is now easier than ever, and it will only get better. To top it off, imagine staying anywhere you want for as many nights as you want for the price you spend on a tank of gas. It is possible, see below and Lucky the Sherpa will show you how.

My wife and I have since sold our timeshare. This has freed up some cash, and opened our travel possibilities far wider than we could have had we stayed locked in to the very controlled world of the timeshare. My advice to you is, if you do not own a timeshare, keep it that way. If you do own one, then see my next piece titled “I Feel Stuck - What should I do with my timeshare?”

Darrin Underwood

Contributor

Sherpa Travel Exchange

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Herding Cats

2009-10-09T15:22:00.000-07:00

Have you ever heard the expression "It's like herding cats"? Well, if you've ever tried to herd cats you'd know exactly what the expression means... as much as I love cute little kittens, you just can't seem to get them to work together for a common goal.

The same can be said about the vacation rental market. As a legitimate competitor to hotels, the vacation rental industry has grown to reach $24 billion U.S. in annual bookings. Not too shabby for an industry that's mostly comprised of individual second homeowners and about 7,000 vacation rental property management companies that either own their own vacation rental houses/condos/villas or represent the properties of private homeowners. Trying to standardize practices in a fragmented market niche such as the vacation rental niche is like herding cats.

Nevertheless, several intermediaries and technology providers are working hard to add a common set of business practices and processes to move vacation rentals into a mainstream lodging option that competes with hotels. Here's an example of what I mean.

This is Fleet Week in San Francisco. This weekend we have the pleasure of welcoming more than 1.5 million tourists into our city to watch the amazing Blue Angels fly over the San Francisco Bay and through the Golden Gate while the deftly maneuver their $500 million fighter jets within mere centimeters of each other. A quick scan of Craigslist shows that there are still several vacation rental condos and homes available for this weekend - some with an asking price of $3,000 for two nights. If I were a traveler that could afford this rental I would be asking myself, "how do I book this place." Travelers have become accustomed to booking hotels online. Yet, when it comes to vacation rentals, PhoCusWright says that only 15% of vacation rentals can be booked online.

If I wanted to book the San Francisco vacation rental home I would have had to bring a suitcase full of cash or find a way to overnight a large deposit to the property manager. Both of these options are more hassle than they're worth, so most people opt for a hotel.

Back to my original point, most vacation rental properties are marketed by homeowners or the property management firms they hire. The current recession means that these homeowners and property management firms are exceptionally motivated to find ways to increase their bookings. Several sites have sprung up that offer homeowners and property managers with exposure to travelers that might want to book their vacation rental homes. The most noteworthy site is HomeAway.com and their collection of vacation rental sites (including vacationrentals.com and vrbo.com). These are noteworthy not just because they drive more traffic to their sites than any other vacation rental intermediary, but because they have received more than $500 million in venture capital from several big time VC firms. That's quite an endorsement of their business strategy and market opportunity.

Anyhow, HomeAway has recognized that the vacation rental market niche is the next frontier in online travel. Given the relative under-development of the intermediary portion of the vacation rental value chain, there's plenty of room for competition. The intermediaries that can herd cats by offering homeowners and property managers solutions that drive bookings and simplify the process of managing a vacation rental home will ride the growth wave that is likely to follow.

Sherpa will drive standardization of business processes through providing an innovative online booking model for homeowners and vacation rental property managers that will enable them to earn extra cash and compete with hotels.

Looking forward to reading your thoughts and ideas.

Russ

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102

415-997-9925 Google Voice
russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx

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Questionable hotel security

2009-10-07T10:32:00.001-07:00

Last week I wrote a post entitled "Creepy Roommate Stories" where I implied that having roommates can really suck. Although it's often necessary to have a roommate in places like London, New York, Tokyo or San Francisco, it can definitely be a major privacy invasion. In that post I told you about a roommate that drilled a hole in my bedroom wall, presumably for ventilation... Of course, his motive was more perverted than that. That's creepy. Anyways, that guy was kicked out shortly thereafter.

Sherpa contributor Darrin Underwood forwarded me an article this morning that shines a light on issues with hotel security and an incident with a well known, and attractive, ESPN personality named Erin Andrews.

http://news.yahoo.com/s/ap/20091007/ap_on_en_tv/us_espn_andrews_video_hotel_security

As I speak with more people about Sherpa's home based lodging platform I've learned that the first concern that people raise has to do with security. After all, if you are operating a make shift hotel from the comfort of your own home, how would you know if the guest you are hosting is a sex offender or had a capricious criminal record? These valid concerns got us thinking about methods that traditional hotels use to safeguard your safety in an attempt to come up with some ideas to apply to Sherpa customers. What we found... or didn't find... raised some serious questions about hotel security.

More than 10 years ago I studied the hotel business as the primary subject matter of my travel and tourism undergraduate degree. I knew that there were some primitive methods that hotels use to safeguard your identity and security so it would be difficult for someone to walk up to the front desk and find out if you're staying at their hotel or obtain a room key to your suite. However, that's the extent of most security procedures. There's no way of knowing whether the person in the adjoining room next to you is a criminal, sex offender, communist (Glenn Beck thinks I should be afraid of these people, so I guess I ought to be :)) or some other unsavory sort. The article referenced above sheds a bright light on hotel security, or lack thereof.

Which is why we are going to take things several steps further by providing homeowners with a free sexual predator record search on any traveler/lodger that they host in their part-time hotel, vacation rental or their home exchange experience. We will also provide homeowners with the ability to conduct a criminal background search and we will feed this information back into the booking record so our homeowner customers can quickly assess any risk and make a decision to accept or reject the booking based on this information. We think this gives home based hoteliers better control and makes home based lodging safer than staying in a hotel where the person staying in the room next to you might be a wacko and you would never know it.

Russ

What Was Old Is New Again

2009-10-05T06:28:00.000-07:00

I recently read an article that discussed the unusual perks being offered by hotels to draw in new guests. Hotel managers are offering everything from a $100 voucher towards a tattoo, to a Harley Davidson motorcycle to use during your stay. One hotel, the Four Seasons Hollywood, is offering your choice of a Mercedes, BMW, or Porsche to drive during your vacation. What is the reason for all of these creative new ideas, you may ask? The answer is “the worst economic conditions since the Great Depression”.

As a matter of fact, hotel occupancy is down to 60% of normal booking activity, the lowest percentages since the 9-11 terror attacks. Many people are pointing out the fact that we went through a hotel building boom, in the years preceding the Great Recession. Also, businesses have cut back on the amount of business travel they are allowing their employees to do in person. While all of these things are true, there are other reasons for the decline of the hotel industry that are less conspicuous.

Years ago, before the advent of planes, trains and automobiles, it took a lot longer to travel from point A to point B. A 100-mile trip could take up to 2 weeks depending on conditions. During those times, travelers looked more to the generosity of people they met along the way to make their long trip feasible. Family farms and small town homes would open their doors to strangers for the night, cook them a meal and charge them a reasonable price for the service. Since this was not the primary business of these kind hosts, they could charge a price that would work out well for both them and the traveler.

Fast forward to modern day times and mega hotels. Filled to capacity rooms and charging large fees are the only way most hotels can make a profit. Because of this, they are strategically located in areas of high-need so they can do one thing; make money off of limited supply. The problem with this arrangement is that you and I are at the mercy of the hotel chains. Most travelers need a hotel room at the same time other people need it which drives up our costs even more. In addition, most hotels are limited to areas of high traffic. If you are looking to get off the beaten path, then your choices decline severely. This is where the “old has become new again”.

There are still plenty of kind people out there willing to open up their home to a traveler for a reasonable price; just like 200 years ago. And, with all of the “make money from home scams” going on during these tough times, people are discovering that it is pretty easy to make some extra cash if they are friendly, and have a spare room or couch for someone to crash on for the night. It is not rocket science.

Contrary to many thoughts about the economy, people are not taking fewer vacations than they used to, they are just getting smarter about how they travel. People are vacationing closer to home, and driving instead of flying. They are also looking for less expensive options, and what I like to call alternative accommodations. Crashing in the spare bedroom of a stranger, or exchanging homes with a like-minded family are two of the alternative travel options that are becoming a lot more popular, especially here in the United States. Many home exchange websites are seeing 20 to 35% increases in the number of listings they have in just the last year. This is a number that would make the hotel chains heads spin.

The only problem with this model is the lack of proper exposure and organization around the process. Yes, if you have heard of Home Exchanges or HomeStays before, then you should be able to find your way around. But, there are millions of us who this is new to. Most of us would not know where to start if you said the words Home Exchange to them. However, this is also something that companies like Sherpa Travel Exchange are looking to change. Everyone knows that, if given the information and guidance to travel easy and cheaply, people will do it. Look for us as we get things going with “Lucky”, the friendly Sherpa over the next couple of months.

Darrin Underwood

Contributor

Sherpa Travel Exchange

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

A new age of frugality

2009-09-30T10:02:00.000-07:00

A couple years ago I conducted an extensive research study that examined consumer behavior. Specifically, I studied the link between a consumer's overall level of happiness and their penchant for frugality, stinginess, or overly economical behavior. I surmised that people make themselves less happy by certain choices they make as consumers. Based on the visceral reactions from friends and family members, I was about to embark on a highly contentious study.

Prior to this study, I would casually observe how it seemed like the people that were constantly chasing bargains never seemed to be satisfied. However anecdotal this may seem to most people, I suspected the people that would drive across town to get gas at Costco (where it might be 20 to 30 cents cheaper per gallon), were actually chasing their tails because they weren't really saving any money when you considered the extra gas to get to the Costco across town or the lost time they could have applied to more productive uses.

Anyways, I hypothesized that people make themselves less happy (and, dare I say, miserable) by being overly frugal. To test this hypothesis I surveyed a panel of more than 15,000 consumers and assembled a small research subject group of 45 people to measure their epinephrine level response to a variety of images and phrases. Hooking people up to a biometric machine helped me determine how they would respond and see if people generally get excited by finding bargains. In sake of brevity, I found a direct correlation between frugality and negative associations with a person's well being and satisfaction. Frugal people were generally less happy than self-described non-frugal people. My hypothesis was supported.

Fast forward to today and I think something has really changed in the psyche of the American consumer (perhaps permanently). Citigroup released the results of a survey on Friday that showed that 63 percent of Americans polled said the way they spend and save has "forever changed" due to the economic downturn. Eighty percent of consumers making less than $50k said they would most likely cut back on everyday expenses while 68 percent of those earning between $75k and $150k said they would make such cuts. Thirty-four percent said they were saving or investing more money, while 60 percent said they would invest or save more going forward.

This is an earth moving change from where our consumer driven economy was just two years ago when I conducted my research into consumer behavior.

Despite the dramatic shift in spending habits, Smith Travel Research has reported that they expect leisure travel to begin growing again next year. My take away from the convergence of both research reports is that people will begin to travel more, but many people will be seeking new alternatives that are more cost effective. In short, this new era of frugality will drive consumer behavior in the direction of bargains, discounts and deals.

These seemingly disparate trends are actually highly correlated and this is exactly why we are building the a fully functioning market niche for Home Exchanges. Given the rise of social networking and the propensity for all age groups to network with friends, family and strangers online, we believe that the next big revolution in travel will be driven by this new era of frugality and social networking. This is exactly where house trading (aka home exchanges) comes into the picture.

Greater desire to travel combined with higher levels of social networking & increased frugality = Latent need for home trading as opposed to booking expensive hotels. Sherpa will make the latent need manifest.

We are creating a secure social networking driven marketplace for people to find other like minded people around the world who want to travel to each other's cities and avoid expensive hotels. Sherpa's home based lodging platform will feature proprietary matching technology that will connect you with other homeowners that want to swap homes for a few days, a few weeks or even a month or more.

Would you swap homes with someone for your travel lodging if you knew it was safe and secure?

I'm interested in hearing your thoughts.

Russ

Russ Hearl
Head Sherpa & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave, Suite E-208
San Francisco, CA 94102
415-601-6244 mobile
russ.hearl@staysherpa.com
Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Creepy roommate stories

2009-09-28T19:08:00.000-07:00

Renting the typical one bedroom apartment in San Francisco will put you back about $2k a month, so it’s no wonder so many people opt for a two-bedroom pad and a roommate. After having lived in London, New Haven, Tucson, Dallas, El Paso and Cleveland, I can tell you that I’d gladly pay $2k a month for a place in San Francisco. I’ve got nothing against those cities, but there’s just nothing like a balmy climate where you’d be hard pressed to find more than a few days a year when you break a sweat and you don’t freeze your ears off. In any case, living in San Francisco does have some disadvantages, not the least of which is the cost of housing.

So, many people deal with the high cost of living finding a roommate – often by posting a roommate wanted ad on classified sites like Craigslist. I always thought there was something a bit strange about a site where you had roommate wanted ads near casual encounter ads. You just hope that your possible new roommate is not also an active user of the casual encounter section as well. Eeew, weird.

The so-called Great Recession is driving more people to cohabitate. According to the U.S. Census Bureau’s American Community Survey, over 228,000 “family households” in California cohabitate with a non-family member as a roommate. Moreover, the Census Bureau reports that 674,000 “non-family households” cohabitate with a roommate in California. Clearly, lots of people in California and our country live with people to which they are not directly related. The Great Recession has contributed to a 9.7% rise in the number of American households that cohabitate. When facing the need to augment your income and offset your expenses with a roommate, millions of Americans are already comfortable living with relative strangers. For a proof point, just look at http://www.couchsurfing.org/. Couchsurfing touts more than 1.2 million members who crash on the couches of other members to avoid hotel costs.

A few years ago I was in search of an extra 500 bucks a month to help defray the cost of my rent and I entered into a short stint with a roommate who was probably a super user of Craiglist’s casual encounters section. Needless to say, after a nearly two months of constant strange women visiting my house at all hours of the night, I asked the guy to move out. As a follow-up to that movie-of-the-week special presentation, there was this roommate who thought it was great to have fondue parties at my house every weekend with 10 of his closest friends. Oh, and I can’t forget the roommate who drilled a hole in my bedroom wall, presumably for ventilation. Yeah right.

Not all roommates are sociopathic or party-animals, but there’s one thing you can say about at least 90% of roommates, it’s a full-time invasion of privacy. Sure, some people really like sharing their living space for social reasons, but if given the option, most people would rather live on their own.

This is why we came up with the idea to establish a viable homestay market in the U.S. A homestay is a pretty simple concept that involves an ordinary homeowner or tenant entering the hotel business by taking in lodgers on a part-time basis rather than taking in a full-time roommate. The homestay business has been around for centuries. America is full of people that augment their primary income with part-time jobs. Just look at the ongoing (if not utterly surprising) growth of direct selling/multi-level marketing companies like Amway or Avon as a microcosm of our entrepreneurial spirit here in the good ole US of A.

We think that many people, if given a properly functioning and safe marketplace, will opt to earn extra cash by taking in lodgers instead of a full-time roommate… especially if you can make more money in less time than sharing your home every day of the month. We're creating the first efficient online marketplace that provides homeowners with the tools that will enable them to compete with hotels by offering lodging services to travelers.

It may not be a solution for everyone, but it sure beats trying to recruit your cousin to become an Amway rep, and it certainly beats selling all your stuff on eBay or Craigslist to make ends meet.

What do you think??

Russ

Russ Hearl

Head Sherpa & Co-Founder

Sherpa Travel Exchange, LLC

601 Van Ness Ave, Suite E-208

San Francisco, CA 94102

415-601-6244 mobile

russ.hearl@staysherpa.com

Stay Smart. Stay Sherpa.

Follow Lucky the Sherpa on Twitter: sherpatravelx
Check out our Facebook page: www.facebook.com/home.php?#/pages/Sherpa-Travel-Exchange/123269124279?ref=ts

Becoming a hotel operator in your own home

2009-09-24T13:21:00.000-07:00

We partied like it was 1999.

Problem is, we partied hard for five long years from 2003-2008. Our party favors consisted of copious amounts of low interest adjustable rate mortgages, McMansions, Cadillac Escalades and $25k limit credit cards. We visited Home Depot more times than many of us care to admit as we pursued yet another home makeover project idea inspired by one of the 45 TV shows depicting the transformation of a modest 3 bedroom home into a castle fit for a king.

Like any good party, the after effects are usually just as memorable as the party itself, if not more so. Today, large swaths of the American population are suffering from a massive credit hangover that has been made even worse by rising unemployment/underemployment, rising monthly mortgage payments, and foreclosures.

In late August, the Mortgage Bankers Association reported that the number of Americans who are in serious delinquency on their mortgage rose to a record 9.24% during the previous quarter. They also reported that 9.24% of homeowners were at some stage of the foreclosure process. In a country of roughly 65 million homeowners, that means nearly 6 million homeowners are in the process of losing their home or coming pretty darn close to it. This doesn't even address the 13% of American homeowners that are at least one payment behind and risk foreclosure.

The "American Dream" of home ownership has turned into a nightmare for many well-intentioned, hard working people. The great thing about this country is that, at the core of our DNA, is an entrepreneurial spirit. It's this spirit that has lead America through and out of several recessions and has driven GDP growth for our country and countless countries beyond our borders. We pull ourselves up by the bootstraps and do something to make our situation better. We don't expect a corporate bail-out, we just put our nose to the grindstone and come up with solutions.

Case in point, consider the emerging trend of home monetization. I know, you're probably asking yourself, "what the hell is home monetization?" Good question, because I pretty much just made it up.

Actually, it's pretty simple, homeowners facing foreclosure, layoffs or unemployment are realizing that they can run a hotel business out of their own homes. Forget about stuffing envelopes to make extra money or hawking some Amway products to earn a few extra bucks, these enterprising homeowners are recognizing that the most valuable asset they will probably ever own is their home, and it is woefully under-utilized and, unfortunately, is depreciating in value in many markets across the country. Instead of whining and complaining, many Americans are mad as hell and just don't want to take it anymore. Okay, maybe they're not mad as hell - but I assure you they're not willing to take "it" anymore... whatever "it" might be.

On September 3, in an article entitled "The Reluctant Landlords," The Wall Street Journal reported an increase in the number of Americans who are opting to rent out their homes or extra bedrooms within their homes to make some extra cash. In effect, many of these homeowners are becoming not just landlords, but part-time hotel operators. Renting your extra living space in your home to lodgers is not exactly a new idea, but it's one that many homeowners and tenants have discovered on their own.

Driven by financial necessity, unemployment, opportunism or a myriad of other reasons, many homeowners are deciding to get into the hotel business rather than finding a full-time roommate to bridge their gap between their income and monthly expenses.

We've all been spammed by countless work-from-home schemes that promise yachts, endless riches and beautiful women - if only we are to stuff a bunch of envelopes in the comfort of our own living rooms. Most people know that which sounds too good be be true probably is.

Running a hotel out of your home to deal with the financial crisis is perhaps the only legitimate home-based business. After all, you're using your home to propel you into your own service business, even if only for a 3-4 nights a month. We've been hearing reports of homeowners charging $100-150 a night to take in lodgers in their extra bedrooms and making an extra $750 in income each month. I talked to one of my neighbors who made $1,000 this week by hosting a business traveler on assignment for a 2 week project with a major consulting firm here in San Francisco.

These stories were the impetus for my home based lodging concept. Home based lodging is home monetization for the masses. It's giving regular homeowners the ability to compete with hotels by tapping into their entrepreneurial spirit and using their assets (their homes) to make extra money. However, before you can scale this concept for mass adoption you have to give homeowners a marketplace to find travelers and, perhaps most importantly, make sure that the traveler isn't some psychopath, criminal, sex offender, or all three.

We're working on addressing these issues with Sherpa Travel Exchange. Stay tuned and let the home based lodging revolution begin!

Hotel industry - you're about to get a whole bunch of new competitors!

Good Luck,

Russ

Russ Hearl

Head Sherpa & Co-Founder

Sherpa Travel Exchange, LLC

601 Van Ness Ave, Suite E-208

San Francisco, CA 94102

415-601-6244 mobile

russ.hearl@staysherpa.com