The City View: August CEO Mélie Dunod on rethinking holiday home co-ownership
Today Andy Silvester talks to Mélie Dunod, CEO and co-founder of holiday home co-ownership firm August. She talks us through the company’s inception; why their equity purchase model allows for better and more transparent co-ownership; and the post-Covid re-examination of lifestyle purchases.
And in the news: law giant Eversheds Sutherland has re-entered Russia, striking a deal with a new Russian firm; the cost of living crisis is increasing the chances of borrowers defaulting on their debts; and WHSmith has returned to profit.Andy Silvester 0:08 Good afternoon and welcome to the City View podcast me Andy Sylvester editor here at City am is but 24 hours or so until the city M awards take centre stage at the Guildhall tomorrow night’s gala dinner celebrating the very brightest and best of the square mile all the coverage and winners in Friday’s city am newspaper. In a few minutes I’ll be joined by Mélie Dunod the co-founder of August’s a holiday home company with a difference is looking to revolutionise the slightly tried and tested and dare I say it slightly tired timeshare for a more discerning modern audience. Firstly, the corporate headlines and law giant Eversheds Sutherland is entered into an exclusive relationship with a newly formed Russian law firm, consisting entirely of its former employees just weeks after vowing to cut links with Russia in response to the country’s invasion of Ukraine. The London law firm said all of its Russian lawyers are transferred to this newly launched relationship firm birch legal, which will continue to service eversheds international clients, but its legal intern boasts to its customers that only the company’s name has changed. The launch comes after eversheds last month voted to exit the Russian market and sever its ties to the country just weeks after Russia invaded Ukraine on the 24th of February. At the time, eversheds said it would no longer have a presence in Russia, as it took a firm moral stance against Vladimir Putin’s decision to send troops into the Ukraine. On its website, Berkeley also is set to act as eversheds as exclusive partner in the Russian market, as the firm boasts that it will keep all of its connections with foreign colleagues on all current as well as new projects. A foreign office spokesperson said that while it was commercial matter for the firm, Russia’s attack on Ukraine must be a wake up call for British businesses with commercial interests in Russia. Meanwhile, the cost of living shocks that is rippling throughout household finances increasing the chances of borrowers defaulting on their debts, Britain’s biggest mortgage lender warned today, worsening economic conditions triggered by inflation scaling to a 30 year high is likely to lead to greater financial distress amongst Brits Lloyds Bank said today. The bleak assessment touches on a similar conclusion announced yesterday by the UK is the largest lender overall HSB See, stationary giant meanwhile, WH Smith is returned to profit and said it was set to reap the benefits of opening a number of new stores in airports as international travel rebounded in interim results for the six months to the end of Feb. The high street named headline profit before tax of about 14 million. Chang pointed to a new store pipeline of more than 125 stores and travel hubs including 63 in North America and 31 in Spain. Elsewhere, there is good news for Addison Lee, which is returned to profit. Drax has been asked by the government to consider keeping its coal plants open and a court case will decide whether cornflakes are a high fat high sugar food or whether because they usually serve with milk, they aren’t quite as bad as first thought on to the Jaffa Cake Cake or biscuit club that that one. And now we’re joined by Melody know, the co founder of Aug, A three year old company which is doing timeshares very differently. Indeed. Rather than buying one home with August Dubai five locations available, including the south of France, the Cotswolds and Barcelona million I will talk about August, but also about the new version of travel and people dipping into their savings in ways they never have before Millie, thanks for joining us. Mélie Dunod 3:15 Thank you, Andy, great to be here. Andy Silvester 3:16 Um, why don’t I mean, goodness knows I look outside at the weather with grey skies. It’s nice to be talking about holidays and getting away. Why don’t you take us back to 2019 and the inception of August and what the problem was that you were trying to solve with the with the new business? Mélie Dunod 3:36 Yes, of course. Well, I guess we call my co founder and myself from a real estate and interior design background, both in London and some of our customers who were using our services to decorate their homes in London also had properties, abroad and holiday homes. And we quickly realised that it was a very broken market. So the only option you have if you want to buy a holiday home is to lock yourself with just one location to navigate how you buy in a different country and then take care of all the costs on your own. And actually just use those homes probably five, six weeks. So we thought well actually, it doesn’t really add up. And there’s probably a much better way to use your phones. And actually not buy just one home but multiple ones, and take care of all the management hassles that come with it. So that’s how we came up with August and so that actually co ownership for holiday homes makes just so much more sense. Andy Silvester 4:40 It’s quite an innovative model, right? Because there will be people who here or buy a home alongside you know, other people and other share or whatever they go back to those. There’s all timeshares but this is a very different concept. Right? Mélie Dunod 4:54 Exactly. So, of course the idea of sharing assets that you don’t use a lot It is not new, right? timeshare was there and and that was an innovative proposition. However it was done in a way that didn’t make sense. And that’s why there’s such a terrible reputation for it. CO ownership is completely different, because the way we structured it is that it’s real ownership. So it’s an equity purchase, meaning that Aug doesn’t own the assets and the shareholders who are the governor, own 100% of the of the properties, and have full transparency and control on how things are run. So it’s, it’s more comparable to, there’s nothing new here as well, some a group of friends who decides to buy a home together in the south of France. The difference with August is we mix you with people with different interests, so it makes more sense. And it’s obviously all modelled and done in a way that it just makes more sense and standardised. Andy Silvester 5:50 Yeah. And I want to talk about that, actually, because the model is slightly different. So you’re not just buying properties, and then kind of getting the keys and then farming them out. Right, you spend quite a bit of time as I understand it, anyway, doing a lot of work on the design of the property and trying to bring them up to this sort of luxury class, which I guess, is what after the pandemic, in particular, people are looking for, because my instinct and correct me if I’m wrong, is that being locked away, as we were for such a long period has made people really start to think again about how they travel and actually wanting that extra level of luxury that maybe they might have passed on before people seem to, you know, and this is just anecdotal evidence, but you know, people I speak to are all talking about their lifetime holidays, you know, their once in lifetime holidays that they’ve brought forward and, and they’re going to do it properly, they’re going to dip into savings or whatever, because they feel like they deserve it after such a tough time. Mélie Dunod 6:42 Yeah, that’s very, very true. There’s a clear shift in the way people approach travelling and holiday homes in general. And I think I mean, for August, we saw a huge increase in demand after COVID, because you’re very so people feel that they deserve, you know, to actually spend more on their lifestyle. And August, obviously fits within that proposition. But more than that, I think people also want to spend more quality time together with their family, and having holiday homes that you know, you have, and you don’t need to plan ahead, and you don’t need to spend the time to find a property, it’s already there. So you actually do holiday a lot more when you have your own holiday homes. Because oftentimes you speak about I would be great to holiday in August, but you don’t really get around and do it. And so there was a real shift where people wanted to have their own holiday homes that feel homey, where they feel safe, and they feel that they can invite their loved ones and friends. And this is also the what we’re seeing with August and why all of a sudden, we had we’ve got a huge demand of people wanting to join August and our predictions of homes. Andy Silvester 7:52 Yeah, absolutely. And he seems to have grown. I mean, as you say, there was a huge amount of demand increase. But there seems to be a degree of growth, it also launched three new collections this year was kind of take the, you know, the sort of destinations you’d expect, I suppose in a certain way, and really kind of Adeleke European destinations is the plan to just keep expanding because the model seems to be quite replicable as you just as you bring in more demand, you sort of just go and find these new properties and build it out that way. Mélie Dunod 8:20 Yes, absolutely. And I think what is fun as well is we adapt to the demand that we have. So for example, one of the latest collection that we just snapped at is called the premium collection, where you really have access to bigger properties very, very high end, the founding member of this collection is actually one of our existing co owner who joined one of the first collection that we did, and he wanted bigger properties. He loves August, you know, he wants to the whole journey of us building a collection. And so was a bit the initiator of us creating that next collection. So yes, it is expensable. And I think also a lot of our current co owners are recommending their friends. So it’s just growing organically as well, which is really nice. And our plan is to have even more moms and connections in the coming years. Andy Silvester 9:07 And my last question, you know, where’s your favourite of these destinations that you’re in? Because, as I say, it’s a very grey day in central London right now and it’d be nice to think of somewhere sunny and luxurious? Mélie Dunod 9:20 Well, it’s a very difficult question because I think the way we selected the August vacation was that they’re all still very different and have something very different to offer. Because of course if you have five holiday homes, you want them to all be very special, so it doesn’t see me and that’s why we buy old real estate with a lot of history that we’ve written events or when you’re in the south of France, you know you’re in France when you’re in Italy, you know you’re in Italy, I guess I have a soft spot for the South of France, which is delivered to really really great homes, their apartment in Cannes and a large farmhouse a bit more inland and the villages there are just so nice, the food the weather. So I guess I would say south of France but I’m biased… Andy Silvester 10:02 Biased perhaps but yeah the food the weather when you didn’t mention the rose over I’ll add that one in. Thank you so much for joining us really interesting to hear about a kind of new model of holder homeownership and, and a time that we’re all thinking about doing things differently post pandemic when it comes to travel. So thank you so much. Mélie Dunod 10:17 Thank you so much for having me. Have a good day. Andy Silvester 10:21 That was Mélie Dunod of August doing travel a bit differently. I’ll be back tomorrow just before heading off to the City A.M. awards hope you’re joining us there but if not, as I say all the coverage online on Friday.