Airbnb is one of the largest online hospitality service providers that offer short-term rental accommodations to the users. It benefits both the hosts and guests where hosts are the persons who are giving their homes for rent and guests are the people who need accommodation for a short period of time. Airbnb offers a variety of lodging services to the users such as home stays, hostel beds, apartment rentals, vacation rentals, and more.
The company does not possess any own residential lodgings and it utilizes the homes provided by the hosts for rental services and just acts as a broker between the guests and hosts. It gets commissions or service fees from both the ends for every booking and it consists of more than three million residential places around 65,000 cities in 191 countries across the world.
The cost for lodging can be fixed by the host and Airbnb does not involve in the price fixation for lodgings. Airbnb is also similar to all other hospitality services and consists of collaborative consumption and sharing. Initially, it started its services by providing short-term living quarters and breakfast to the users.
Recently, Airbnb has acquired the Montreal-based Luxury Retreats for nearly two hundred to three hundred million US Dollars. Hence, it showed that the company is trying to expand its service from home-sharing services to luxury rental services.
Airbnb and its growth
According to the reports, Airbnb’s revenue has raised to eighty nine percent in July 2016 when compared to the last year revenue at the same time. The reports disclosed the revenue growth and it did not reveal the revenue amount. Airbnb announced that it would hit the revenue about nine hundred million US dollars by the end of 2015. Hence, it was predicted that the company could reach nearly 1.7 billion US dollars in revenue.
At the end of 2016, the company has obtained 850 million dollars in a funding round which was estimated as thirty billion dollars. For a past few years, the company’s growth has surpassed the development of all other hotel booking websites. The rise in the growth of Airbnb is due to the lowest price offered by the company when compared to the average rent for a hotel room. According to the survey, it was found that the person who used Airbnb has spent lesser than the person who chose hotels and it was about an average of twenty six percent per night. The average rate of Airbnb is about 128 dollars per night, while compared with other discount hotels.
Acquisition of Luxury Retreats
The home-sharing company was continuing to include many new features to its online marketplace to fulfill all the demands from the both ends and the increasing growth in the number of hosts and guests, the company is focusing mainly on the providing high-end properties to its users. Airbnb has acquired Luxury Retreats and the financial details were not disclosed to the public.
Luxury Retreats is a rental company that operated in a full service and it offers above four thousand homes and nearly hundred destinations across the world. It has specialization in providing high quality concierge services, the variety of facilities and world class listings. The company is providing villas for rent at a cost of thousands of pounds for a single night stay along with the own concierge services.
The company was founded by Joe Poulin in 1999 while he was working as a web developer and he inspired by the own experience of his high-end accommodations and decided to provide luxurious rental services through online. Initially, the idea was rejected by many financial backers and later it was accepted by many property owners worldwide.
This acquisition of Luxury Retreats will enhance the Airbnb’s effort to offer different kinds of homes and better experiences to the visitors, especially for the travelers who are visiting the traditional holiday destinations. Hence, Airbnb will offer various amenities from simple air mattresses in an apartment to the castles to the luxurious villas.
Role of the villa rental firm
For a short period of time, Luxury Retreats will be operating as a stand-alone organization and it will take some time to include in Airbnb community. After that, the listings of Luxury Retreats will be combined and highlighted on the Airbnb website. The villa providing company consists of nearly 250 employees and the entire team will integrate with the Airbnb family. This partnership focusing mainly on offering many more excellence services to the users in the Airbnb community.
Both the companies are expecting to invest in their Montreal Office and it will be adding a number of additional resources and employees to the Canadian team in the upcoming years. One of the luxuries rental sites of Luxury Retreats is St. Barthelemy in the region of the Caribbean, which provides five bedroom house for about 32,000 square foot. It costs 3,571 dollars for a night in the off season and during the December and January month, it will cost nearly 15,714 dollars. Another famous farmhouse is present at the San Casciano’s Tuscan village that is available as a seven bedroom farmhouse.
The reason behind the everlasting success of the Luxury Retreats is the sharing economy and it is responsible for completing their target and also responsible for the funding and growth of the company. Airbnb was using the idea of providing the rental rooms at low cost where the stay is unique to hotel stays, but the cost was cheaper than the hotels. Luxury Retreats has raised its revenue to five million dollars in funding by the iNovia Capital.
In the travel industry, the growth of Luxury Retreats provided as a sign of the advantages offered by implementing sharing economy in their businesses. The idea of sharing economy has blown up in high popularity and it is highly helpful for the companies to deliver consistent and predictable services to the guests.
The process of providing high-end rental services for wealthy people has many competitors and Luxury Retreats is standing out of them by offering different services to the people. It pays more attention to vetting sites or curation that makes the huge difference in their growth.
The process of loading the properties to the Luxury Retreats is not completely peer to peer process because the hosts that loaded their properties would not be published immediately on their site. The company will verify all the documents of the properties and after the successful completion of the verification; it will be published to all other users.
Luxury Retreats will get twenty percent or more for a booking, where the Airbnb obtained five percent on the host side and charges nearly six to twelve percent of a commission to the guests.
The acquisition of Airbnb also shows that the company needs a new identity of operating as a travel agency, because of the increase in legal challenges faced by the core product of Airbnb. Airbnb announced that the users have to sign up with Luxury Retreats separately to book the luxurious villas through the Airbnb site. Airbnb also started to expand its services to various categories and it also aims to provide flight booking services on its own site. It has partnered with airline loyalty programs to implement the air ticket booking.
Author Bio : Anand Rajendran is the Co-Founder and CEO of Zoplay,a best android apps development company in Chennai. As a digital marketer, his main objective is to create new apps with latest coding scripts. The Renter Software Script available from his company is mainly meant for Ios and Android users which is also Airbnb clone script.