“Homesharing is not just a solution to create utility for housing oversupply in Vietnam, it also fits the demand change for accommodation in the travel industry,” shared Steven Nguyen, the CEO of Luxstay. A few weeks ago, Nguyen pitched Luxstay on Shark Tank Vietnam’s season three kick-off episode and walked away with a $6 million USD investment, the largest number in Shark Tank Vietnam history.
It’s easy to compare this Vietnamese startup to the leading company in the homesharing space, Airbnb. However, Steven and his team like to think that they don’t compete against anyone specifically. They want to become a pioneer in the space, to create a new, modern chapter for the homesharing marketplace and Vietnam’s travel industry.
Luxstay’s CEO Steven Nguyen spoke with Vietcetera last week, sitting in Luxstay’s new offices in one of Ho Chi Minh City’s newest skyline additions, Landmark 81.
Most industry followers wonder how Luxstay will build its presence when the homesharing industry already features big names like Airbnb. What’s your reply?
When we first started, we knew that this industry offered a lot of competition. At the same time, we knew that other companies will continue to innovate in this industry anyways, even if Luxstay never existed. And despite the odds, we sought to become one of the pioneers pushing for a place in this space.
During our research and development stage, we came to realize that the homesharing industry has problems that Luxstay can create a solution for. Currently, we view Airbnb as a company that helps to grow the homesharing market in Vietnam alongside us. We have yet to think about competition. It can be a challenge in the future, but it isn’t one for us currently.
Can you share some of the trends currently developing in Vietnam’s travel industry?
The emergence of tech companies creating solutions for the travel industry is worth highlighting. It helps to bring the image of Vietnam to the global audience in a faster and more powerful way.
Vietnamese millennials and Gen-Z’s make up most of the Vietnamese consumer market, enabling faster adoption of new services and technology. We’re at the heart of it. Consumers are also becoming more proactive in buying and selling online instead of using services from tour agencies.
Where else did your career take you for before starting Luxstay?
In 2007, I founded Netlink, which specializes in public relations and online advertising. We were the first and only Google Publishing Certified Partner in Vietnam. In 2014, I founded Metub Network. It’s currently the largest YouTube multichannel network. We operate more than 3,000 YouTube channels hosted by many content creators, generating almost five billion views per month.
What were some past experiences that have helped guide you when you started a new business this time around?
All of my past experiences have taught me how to start a new business, from recruiting a team to creating an effective business strategy that maximizes profit. These past experiences have also helped me avoid the mistakes that I made in the past. It also helped me to network and build connections. These networks I’ve created are the primary support for my current business.
How did Luxstay retain its first group of customers?
When we first started, Luxstay featured a few beautifully furnished houses. We advertised them online and received a lot of attention. From there, we started to have customers trying out our service. Customers are attracted to Luxstay because of the unique offerings with affordable prices and great amenities.
Can you share what was the first success and failure that Luxstay experienced?
After three years operating in Vietnam, we’re still a growing company with room to grow. We’re making an effort to create a community of homestay businesses all over the country. We hope this will create a new trend among Vietnamese travelers.
What common traits are shared by the leading homesharing businesses?
I personally believe that the common trait we see in the homesharing industry is a passion for creating products that customers love to use.
What do you wish you knew before starting this project?
I would have started way earlier if I knew that the homesharing industry had such great potential.
What are some challenges that Luxstay faces in order to scale?
The biggest challenge now is building a team of talented people and securing enough capital to speed up the process of gaining market share. The second challenge is our need to focus on developing technology that provides a solution to market demands.
What’s your plan and vision for the travel industry in Vietnam within the next few years?
Vietnam is a country with a coastal line that stretches over 3,400km, features a tropical climate, and is home to a diverse cuisine. There is a great potential for the travel sector to grow all over Vietnam, not just in big cities. This is one of the strengths helping grow Vietnam.
However, the scale of the travel sector in Vietnam is quite small compared to other countries such as Thailand or Singapore, especially if we compare their infrastructure and resources. The Vietnamese government recently announced that the travel industry will be a key driver in economic growth over the next five years with further support and regulations soon coming from the government. The opportunity to create value as a business in this sector is huge. In the next few years, I think that Vietnam’s travel industry will develop with many more new destinations popping up. More and more travel business and technology startups are tapping into this market.