Keynotes by Casago

, we're talking today with Chad and Rowdy
from Costco's third home initiative,

which is the homeowner exchange program
that we offer to our homeowners.

Guys, thanks for coming on.

You got it.

Thanks for having us.

Thanks, Steve.

So we've had a lot of homeowners ask
the questions, , what is the third

home initiative through Costco?

Um, how do they jump onto the
program and how does it work exactly?

So we're going to dig a
little bit into that today.

, Can you tell us as a homeowner in Casago?

How, , how does it work for them?

How does the home exchange work?

And, , just give it a quick overview of
what they need to know as a homeowner.

And then we'll dig down
into the details of it.

Sure, absolutely.

Well, the, , genesis is, , to
find more flexible usage for

Steve: Properties globally, and to
allow more flexibility for that property

to be monetized, uh, towards travel.

Around the world

, essentially each of each of you as
homeowners under a Costco, , would have

the right to deposit a fixed time in
the increments of seven night weeks,

, into our portfolio of third home.

And in return for that, you'd get,
, travel credits, what we call keys.

, to then be used as currency against
other exchanges around the globe.

Yeah.

we have something that's called an
indirect model versus a direct model.

What's the difference between an
indirect model versus a direct model?

And why is the, uh, Costco's third home
program better by being an indirect model?

, The quick answer is organization
and efficiency, right?

The concept of home
exchange and home swapping.

Is decades old, but the process and
the reality of two homeowners on

different sides of the continent or
world, um, communicating with one

another effectively to exchange a
specific week in each other's property.

Steve, I would love to stay in
your property and, um, Scottsdale.

You can use my home and veil at
the same time for the same week.

Um, how do we coordinate this?

Um, it, it's a bit antiquated . And
instead of, of following that, we

decided to, to follow a much more tried
and true concept of, um, indirect.

In other words, A point space system.

Time in a home equates to
a certain value of points.

Those keys , are then used as
currency to exchange into other homes.

And so when you mentioned keys,
Roddy, how are keys earned?

How are they calculated?

And, , how do owners know what the value
of a week in their property is worth?

So basically , when, um, uh, a
person joins , we evaluate their

property and the, and the way keys
work is, is we made it pretty simple.

Basically, if you have a, a 1 million
property that equates to a, to a one

key week, if you have a 5 million
property and you put in a week of that

property, you would earn five keys.

And a non peak season and a non peak week.

Now we do have a scale where people,
, when people join and they look at the

calendar and they're like, and they
decide, okay, we want to put, , August

1st in or you choose your date, there
are some peak weeks and super peak

weeks, and when you put your, your home
in, in a peaks peak week, you'll get

a two X you'll get a two X multipliers
to get double the amount of keys and

for a super peak week, like a Christmas
week and tell your ride, you would get

\ .
A three X multiplier on your property.

Can you walk me through the process
in which a homeowner would go

through when they want to list
their property on the Costco's.

Third Home initiative.

Sure.

So basically they would
fill out a URL link.

They would put their address in
their and then a member experience

associate would contact them.

But once they put their address
in, we would go ahead and, uh,

take a look at the property.

We would, uh, we would evaluate the
property and see what the value is, and

then we would discuss with the homeowner.

The key value and then we would
discuss with the homeowner the

weeks that they want to put in.

It's a pretty simple process.

It if Steve, , , if you put one of your
properties in, you gave us the address.

. You wouldn't have to do a lot of work.

So basically they will, you know,
they'll choose the weeks and then

.
It's, I don't know.

It's about a three day process.

I would say to, to fill out that
form and to go through the process.

Um, and I would say one of the, the
really great things is that when they.

When they join and they get their,
their keys, they're not waiting

for anyone to book their property.

They actually get those keys.

The moment that they deposit those
two weeks . Um, that's a huge

benefit because you don't have to
wait around for anyone to book it.

Like you, you can literally
join today and travel next week.

Yeah.

You know, I just signed up my own
personal property on third home.

Uh, it was so easy.

And, uh, went right through, you know,
the channels, knocked it out, put

the description in it up, uploaded
some photos and, uh, I ended up

getting six keys, uh, for my couple
of weeks out of the whole deal.

Now I used one of the premium weeks, , you
know, a week that you'd said was premium.

So I got a multiplier on my keys there,
but I'm really excited , something that's

important to understand is, um, getting
onto the service is free for Costco

homeowners, but there is an exchange fee.

How do they know what that
is or where to find that?

. When you go on and book a vacation,
you book a trip, everything is,

all the fees are listed right
there on the, on the page.

So you'll, you'll scroll
down, you'll choose a week.

And then when you choose.

Your timeframe that you want to
travel on the same line, it will

have, , 695 or whatever the exchange
fee is for that specific property.

Uh, it's probably an average of 900
a week, but you're talking about

a, you know, 20, 30, 000 vacation.

Um, but it's all right there.

There's no, , there's no.

Hidden information that you're going to be
surprised by, , a fee when you show up to

the property or anything like that, like
everything is, is pretty upfront for you.

. When you book your trip.

Yeah.

The savings looked, when I was digging
through the software, when I was

digging through all the inventory
that's available to us, it looked

like it was about a 95 percent savings

you know, a 600 fee.

I was living in Italy, but
it was a 6, 000 rental.

It was 6, 000 and change.

I'm like, well, that's a pretty good deal.

So that's how it seemed to work out.

Sorry.

You're right on the money.

And in fact, it averages
closer to 97 percent discount.

If you related directly to a pure
rental and fee based model, right?

Um, good news for, Okay.

Each of, of your owners is that, , , the
value of the properties that they're

trading into well exceeds that the average
nightly rate, for instance, within a

inventory is similar to what our weekly.

Uh, exchange fee might be so
tremendous discount in that regard.

Um, and they get the keys, whether
or not somebody stays there or not.

. So if I, so for my property, I put in
Christmas week, , down in, in Rocky

point, Mexico, , the week is there.

Now, if nobody books it or stays, I
still have my keys no matter what.

Is that correct?

That's right.

That's right.

, there's an exception to that.

, our part of our, our model is to reward
our members with instant gratification.

You, you trust us with guaranteed time in
your home for other members to utilize.

We're going to reward you
immediately With keys.

The only exception to that is
if those if the week for which

you deposit is within 60 days.

From the date you deposit it to
arrival date within 60 days of the date

you deposit it, um, which is in our
world is a tight turn, so to speak.

, so we, we switched to a keys
when booked model at that point.

, the key values hold true.

But you don't earn them for last minute
deposits like that until someone chooses

to, , to exchange into that property.

That makes sense.

So nobody books like, Hey,
somebody come in tomorrow and

then they got the keys, right?

That makes no sense.

That's right.

, as long as I offer a week at 61
days or more, I'm guaranteed to

get my keys to use somewhere else.

Whether somebody stays
in my property or not.

That's correct.

So the best way for a homeowner to
get signed up is to reach out to their

local property manager here at Costco.

As everybody knows, every Costco
office is locally owned and operated,

and they're going to go ahead and
send you a link for you to sign up

with Costco's third home initiative.

Now, if you.

Haven't, if you're not able to get ahold
of that, go ahead and go to Costco.

com four slash third home and
select the city you're in.

It'll send you to a,
uh, to the proper link.

Can you get signed up from there?

And that will give you all the
benefits and perks of being part

of Costco and being a Costco
homeowner with this exchange program.

Is that right?.

Yeah, , that's a great process.

And, , just know, you know,
this is a people business.

So there are always.

Individuals within our team,
including Rowdy and myself that are

more than happy to pick up one on
one conversations with your owners.

Um, every home is unique.

Every body is unique and if their
circumstances might be a little bit

different from the norm We want to hear
about that and work with them to find a

comfortable, partnership with us there.

, Chad Rowdy.

Thanks for coming on and explaining
Costco's third home , initiative

and the exchange program that we
have , you have any final words or

final thoughts as we sign off today?

, I'm excited for homeowners
to start traveling Steve,

because , it's a game changer.

, it's a life changing experience to be a
part of this because you're truly able

to travel to places around the world
that you normally don't have access to.

It's life changing.

So I'm excited for you
guys to be a part of it.

Thanks for joining us guys.

We really appreciate it.

If you're a Costco homeowner and
you're looking for more information,

make sure to go to costco.

com for slash third home, or you
can check the show notes below

and, , find the links there.

Thanks guys.

Thank you.