As the luxury real estate rental market takes off, service becomes a differentiator.
In 2009, Greg Marsh, CEO of the hospitality company Onefinestay, was on a trip to Pisa, Italy. He loved wandering off the beaten path to Piazza delle Vettovaglie and realized that he would never have ventured to the area if he had not had a friend living there. When he returned home, Marsh realized that his empty flat could have been occupied by someone else while he was on his trip. He also noticed that so many apartments in London were empty or half-occupied while the hotels nearby were booked to maximum capacity. He decided right then and there to launch his own luxury hospitality company, similar to AirBnB in concept, but focused on the luxury market. He launched the company Onefinestay with co-founders Demetrios Zoppos, Evan Frank and Tim Davey, and listed his own home as the first property on its new website in May 2010.
Venture Capital, Private Companies
Both Onefinestay and AirBnB are privately funded companies. While AirBnb launched in August 2008, Onefinestay launched two years later. Onefinestay succeeded in raising Series A funding of $3.7 million from Index Ventures in 2011, followed by a second round raising $12.2 million Series B funding by US venture capital firms. Then in June 2015, Onefinestay scooped up $40 million Series D funding with investors that included Hyatt Hotels and Intel Capital. By April 2016, Onefinestay was acquired by AccorHotelsfor $170 million (£117 million).
Market Size
Today Onefinestay operates in London, New York, Paris, Los Angeles, Rome, Hawaii, Mexico and the Caribbean with over 2,600 private luxury homes under management. Recognized by the British Hospitality Association, Onefinestay is based in London and enables owners of luxury homes to rent out their properties to guests when the homes are unoccupied.
At 10,000 properties, Onefinestay is significantly smaller in size than AirBnb which has over four million locations worldwide. However, its return on investment per property is significantly higher as well. While Airbnb charges homeowners anywhere between 3 and 5 percent, Onefinestay charges homeowners a 50/50 split. This may seem steep,but the cost of rentals is also significantly higher, and enables these homeowners to rent out properties that would otherwise lay idle and unoccupied. Onefinestay also insists on security, privacy and ensuring the comfort of homeowners in renting out their luxury accommodations to guests.
Luxury Amenities and Service
Onefinestay differentiates itself from AirBnB by its emphasis on luxury and service. This includes attention to detail from the guest’s arrival such as having a friendly face greeting guests, high quality sheets and toiletries as well as 24/7 service as desired by the discerning traveler.
“We are not just putting up a website and allowing others to list their homes and then transact,” says Evan Frank, Onefinestay co-founder. “We are actually taking full accountability for the experience.” The company takes pride in accurately listing each property with a beautiful presentation including background information and photos. They take the time to get to know the property owners well and understand all aspects of the property itself. This is significantly different from AirBnb that does not require such careful curation for each individual property.
Partners include Centurion, the travel agent from American Express) and Signature.
Onefinestay uses Sherlock, its own patented keyless entry technology that enables keyless entry with just a cell phone. Onefinestay also provides guests with its own free luxury in-house magazine called Guestbook, run by Alex Bagner, the former editor of Wallpaper, the well-known, distinctive architecture and design magazine.
AirBnB seems to be interested in the luxury rental market as well, acquiring Canadian rental company Luxury Retreats for $300 million in 2017, besting Accor, the parent company of Onefinestay.
Onefinestay co-founders insist that their business model and approach is different from AirBnb as they focus on “providing an end-to-end, high touch management service for our homeowners.”
Without a doubt, the luxury real estate tourism industry has been growing in recent years, even faster than the travel industry as a whole, according to a report by Amadeus. Catering to this clientele requires more attention to detail and providing an impressive experience through concierge services and extended support that can range from having a personal chef to providing special entertainment tickets – all at the beck and call of the luxury traveler. Onefinestay provides its guests with a Higher Living app for up to a full year after their travel experience to help them stay connected.
It is clear that the luxury real estate rental market is in hot demand and expected to only grow for the foreseeable future. Who will own this growing market and be the top preferred choice among discerning luxury travelers? The answer remains to be seen.
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