Three years ago, Karl Scarlett was a software developer in D.C. running an Airbnb property on the side. The success of his Airbnb led him to get another one up and running, and then another. The upkeep and management of three short-term rental spaces was more than a handful.
But Scarlett says his success raised eyebrows with executives at Guesty, the property management platform he was using. A Guesty rep planted the idea for a standalone business over dinner with Scarlett.
“He said, ‘Man, you need to turn this into a business. We get to see the reviews that our clients have and your places have no problem,’” Scarlett recalled. “With my computer science background, I kind of built a website to see if there would be any traction, and it started to flood in.”
Scarlett founded Great Dwellings, a startup built around managing short-term rental properties found on Airbnb, Vrbo and other sites. Those marketplaces are competitive, and hosts need to stay on top of everything in a guest’s experience to secure good reviews, more stays and a steady revenue stream. Great Dwellings takes over that responsibility from the host, making sure guests get everything they need, and taking a 25 percent commission from each stay.
So while the listing is done under the client’s name, they let Great Dwellings take care of the whole operation. The company cleans and restocks the property, handles key exchanges and even messages renters as the owner’s proxy. Scarlett said the company makes it a point not to erode the personal vibe of staying in a home rental as opposed to a hotel.
“We feel like on a site like Airbnb, you're kind of on there because you want to stay in someone's home or because of the comfort value,” Scarlett said. “You could be asleep. You could not even have Airbnb on your phone. But our team 24/7 is responding to the guests on your behalf.”
Great Dwellings currently runs about 100 properties and brought in about $3 million in revenue last year, Scarlett said. While the company is built on technological solutions, Scarlett says the success is driven by the emphasis on customer service.
“We've got a shared bottom line. We're almost selfishly trying to get us as much money as possible, and that in turn gets the owner that much,” he said. “It's not like ‘Oh, just put some beds in and make sure there's a couple towels.’ We have a 40-page standards PowerPoint that lists countless things that have to go in the home before we even go live. So we know the recipe now.”
With properties spread across D.C., Mexico and the Dominican Republic, Scarlett said that focused customer service is only possible because of a hardworking team. The company employs just under 20 people, with six in D.C.
“It takes great software, but it also takes a great team. Literally without the team, we'd be nowhere,” he said.
After capitalizing on the private homestay market, Scarlett said he saw another opportunity with travelers who want the comfort of a home but the consistent experience of a hotel. So about six months ago, Great Dwellings sprouted another brand called DEWL.
With DEWL, Scarlett’s team takes over a block of apartments from a residential property developer and runs them like a hotel under the DEWL brand. The company either leases the units from the property owner or enters a revenue-sharing agreement. DEWL currently runs a 12-unit property near Cancun, Mexico and is slated to launch in D.C. this spring. The company is also working on taking DEWL to Los Angeles and Chicago.
DEWL’s model tracks pretty closely with WhyHotel, another D.C. hospitality startup that has raised $35 million in investor funding and is running hundreds of apartments as quasi-hotel rooms.
“I will say we are not trying to compete with [WhyHotel]. In general, we're trying to go for that, you know, two dozen units,” he said. “I really love what they're doing. Super proud of them. And we would just be a smaller, more boutique approach.”
Scarlett says Great Dwellings is focused on improving its technological capabilities to build trust with its clients, whether they are homeowners or developers. The company is also doubling down on the DEWL brand as it grows under the Great Dwellings umbrella.
“I spend a ton of money making sure our developers are always adding to what we do, especially for our homeowners. They want more insight into what the calendar looks like and how the properties are performing,” Scarlett said. “So we were constantly improving that homeowner slash developer insight into their investment.”
