How Airbnb Luxe is catering to the mega-rich

by Patricia R. Davis

Gone are the times of air mattresses on the floor. Airbnb is now catering to the mega-rich with a brand new tier of luxury apartment residences. Airbnb Luxe went live on Tuesday morning after long being teased, with 2,000 new listings on Airbnb’s website presenting visitors the chance to live in some of the world’s most extravagant houses.

Everything from entire islands to medieval castles and mansions decked out with water slides, dinosaur skulls, and archery levels are up for hire. The common luxurious list has an asking fee of US$14,000 a week – but can cross as high as US$1 million per week for a non-public island in French Polynesia, which incorporates sixteen residences. Luxury travelers have been eyeing extraordinary domestic rentals for a while, Nick Guezen, Airbnb’s international director of portfolio strategy, says.

However, the marketplace has not provided sufficient safety to excessive-profile and mega-wealthy clients who are searching for privateness, he says. However, this is not absolutely the case. Thinking about that, the Accor-owned Onefinestay, the second-domestic condo platform third home, and flat-rental agency Paris Perfect are all mounted competition in the space. Also, Airbnb Luxe is largely a rebranding of Luxury Retreats, a Canadian business enterprise specializing in remarkable listings, which turned into obtained using Airbnb in 2017 for about US$three hundred million.

None of the listings on Luxe is new to the marketplace: the homes definitely now sit underneath the Airbnb umbrella. The corporation is having a bet on its brand’s power to present it in an aggressive area. People are growing up with Airbnb,” Eshan Ponnadurai, worldwide advertising director of luxury for Airbnb, says. Someone that began in their early 20s renting a room at US$100 a night and is now developing in affluence can also need a room at US$1,000 a night.

Because Airbnb has become part of the cultural talk, renting out your home to a stranger has ended up legitimized in a sociological experience as nicely – even to the awesome-wealthy, says Arun Sundararajan, a professor at New York University, who’s an expert on the sharing economy. In the past, the one’s people who own multimillion-dollar residences could have been reticent approximately sharing them with strangers. Still, nowadays, the general public recognizes someone who has stayed in an Airbnb, he says.

It seems like a greater ordinary activity that lowers the barriers to rent out an extra pricey domestic. In 2017, simplest 36 in step with cent of affluent guests – people with a profit of greater than US$100,000 – who had been surveyed by using Skift Research pronounced to staying in opportunity accommodation or domestic rentals. This yr, that variety has mushroomed to 59 in line with cent.

Since it became based in 2008, Airbnb has upended the travel industry, challenging the big in chains and tour websites consisting of Booking Holdings, even as well as attracting the ire of cities around the arena searching to crack down on illegal listings and grappling with growing rents.

Conquering the posh condominium market will permit Airbnb to promote itself as an employer. However, this cannot comply best with professional rules and cater to the arena’s richest – and maximum demanding – visitors. This is a manner for a luxurious vacationer to e-book a home with no issues or problem,” Queen says. “We can provide them something that is vetted and can be relied on.” In April, Airbnb took over 10 floors of New York’s Rockefeller Plaza with plans to convert them into two hundred overnight flat-fashion suites.

Last month Airbnb introduced Angela Ahrendts, the high-profile luxurious retail govt, to its board of directors. Ahrendts, 58, spent 5 years overhauling Apple’s retail operations and, earlier than that, converted Burberry right into a global luxurious emblem. This new luxury tier represents a rewarding sales supply as properly. However, Luxe’s 2,000 listings pale in assessment with the extra than six million listings to be had on Airbnb’s preferred website.

The agency takes a percentage of the cost of each booking it arranges, so greater-highly-priced inventory generates higher margins and allows to justify the privately-held employer’s US$31 billion valuations. Under Airbnb Luxe, the complete charge comes from the host. The proportion depends on the marketplace and the kind of partnership organized with owners, says Guezen, who declines to present any specifics because the charges range too much among properties.

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