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A taste of the high life with Airbnb Luxe
GONE are the days of air mattresses on the floor. Airbnb is now catering to the mega-wealthy with a new tier of luxury rentals.
Airbnb Luxe went live on Tuesday morning in the US with 2,000 new listings on its website offering guests the chance to stay in some of the world's most extravagant homes. Everything from entire islands to medieval castles and mansions decked out with water slides, dinosaur skulls, and archery ranges are up for rent.
The average luxury listing has an asking price of US$14,000 a week, but can go as high as US$1 million a week for a private atoll near Tahiti that comprises 21 bungalows and a staff of 50.
Luxury travellers have been eyeing high-quality home-rentals for a while, says Nick Guezen, Airbnb's global director of portfolio strategy.
But the market hasn't offered enough security to high-profile and mega-rich clients who seek privacy, he said.
Which is not entirely the case, considering Accor-owned Onefinestay, the second-home rental platform ThirdHome, and apartment-rental company Paris Perfect are all established competitors in the space.
Airbnb Luxe itself is essentially a re-branding of Luxury Retreats, a Canadian company that specialises in high-quality listings and was acquired by Airbnb in 2017 for around US$300 million.
None of the listings on Luxe are new to market, they just now sit under the Airbnb umbrella. The company is betting on the strength of its brand to give it the competitive edge.
Because Airbnb has become part of the cultural dialogue, renting out your home to a stranger has become legitimised in a sociological sense as well - even to the super-rich, said New York University Professor Arun Sundararajan, an expert on the sharing economy.
In the past, those who own multi-million dollar properties might have been reticent to share them with strangers, but today most people know someone who has stayed in an Aribnb, he said. "It feels like a more normal activity and that lowers the barriers to rent out a more expensive home."
In 2017, only 36 per cent of affluent travellers, with an income over US$100,000, surveyed by Skift Research reported to staying in alternative accommodation or home rentals. This year, that number has mushroomed to 59 per cent.
Conquering the luxury rental market will allow Airbnb to sell itself as a company that can not only comply with official rules, but also cater to the world's richest and most demanding travellers. "This is a way for a luxury traveller to book a home without any worries or hassle," Mr Guezen said. "We can give them something that is vetted and can be trusted."
In April, it took over 10 floors of New York's Rockefeller Plaza with plans to convert them into 200 overnight apartment-style suites.
In May, Airbnb added to its board of directors high-profile luxury retail executive Angela Ahrendts, 58, who spent five years overhauling Apple's retail operations and, prior to that, transformed Burberry into a global luxury brand.
This new luxury tier represents a lucrative revenue source as well, even if Luxe's 2,000 listings pale proportion-wise to the more than six million listings available on the general site.
The company takes a percentage of the cost of each booking it arranges, so more-expensive inventory generate higher margins and help justify the privately held company's US$31 billion valuation. The global luxury travel market is worth more than US$200 billion and analysts expect it to continue growing in coming years.
The biggest difference booking under Luxe than Airbnb's regular or higher-tier Plus listings is free access to a trip designer, who will be responsible for arranging check-in logistics, local bespoke experiences and services from childcare to private chefs or in-house massage therapists.
Airbnb's 20 trip designers will be available to guests around-the-clock for VIP support. Some have already handled bizarre requests during Luxe's pilot phase, such as building a temporary basketball court in Los Cabos, Mexico, for an NBA player or cordoning off a section of a jungle in Tulum for a high-profile family to cave dive in private.
Homeowners or their representatives must apply to be part of Luxe. Each property is reviewed by an internal team, who run through a 300-point check list scrutinising everything from the home's design qualities and architecture to the quality of its linen and the water pressure in its showers.
Listings include the Fleming Villa in Jamaica where Ian Fleming penned his James Bond novels and a medieval castle in the Tuscan countryside with nearly 100 acres of land for hiking and harvesting local produce.
Many of the homes are owned by mega wealthy families, including billionaires and celebrities, Mr Guezen said. Some own multiple properties around the world and rent up to half a dozen through the site, he said.
In order to protect the host's privacy, guests are never told who owns the property and each home is stripped of anything that could personally identify them, like a bedside photograph or snail mail.
Staff are advised not to disclose the identity of hosts or guests and each property is insured by Airbnb's standard US$1 million guarantee to cover any damages.
Luxury rentals is the next step in Airbnb's plan to diversify its business ahead of an initial public offering likely next year.
The launch of Airbnb Luxe helps meet increasing demand for luxury properties, the company said. In 2018, the number of Airbnb bookings for listings worth at least US$1,000 a night increased by more than 60 per cent, according to the company. BLOOMBERG