Hyatt hotel operator invested millions to finance London-based Onefinestay, a company that allows travelers to rent upper scale private homes. Onefinestay works by matching homeowners who want to rent out private residences in London but also Paris, Los Angeles, and New York, with discerning travelers. Currently, the company has a portfolio of over 2,500 high-end homes for a combined value of $5 billion plus.
The investment by Hyatt Hotels Corporation is unique since seldom does a large hotel operator work in conjunction with the expanding home rental industry. Although no exact dollar amount of the investment has been confirmed, people on inside state it is close to $40 million, a deal to be finalized by the end of 2015.
Last year, Hyatt Hotels Corporation sold a time-share operation for $220 million. This operation had units in several states to include Arizona, Colorado, and Florida. However, when asked if that was similar to the deal with Onefinestay, the company expressed the time-share operation was completely different.
Although Onefinestay has a strong portfolio and is growing fast, it pales in comparison with competitors like HomeAway, Inc. and Airbnb that have more than one million listings as reported by Evercore Partners. However, Onefinestay offers higher end services than its rivals.
More Hotel Operators to Follow Suit
With Hyatt investing in Onefinestay, there is also a good possibility that other companies like Marriott International and Hilton Worldwide Holdings, Inc. will follow suit. After all, both of these companies have been keeping a watchful eye on how well home rental companies do within the lodging business. Now that Hyatt is firming up a deal, it appears that big hotel operators recognize the home rental sector as being a lucrative investment opportunity with great growth potential.
Sean Hennessey, CEO of Lodging Advisors, LLC, said he is not surprised that a large hotel operator broke rank and aligned with a home rental firm. He also agreed that it was just a matter of time before someone took this step and that other hotel companies will soon follow.
Typically, executives within the hotel industry steer clear from home rental startups, believing they are not competitors since the type of quality control and security measures associated with hotels does not match up. When comparing the two experiences, each has its own set of customers.
Richard Solomons, CEO of InterContinental Hotels Group PLC said that even though there are price-sensitive people, the home rental business is not really impacted. Instead, people look for security and strength in a brand. Since launching in 2010, Onefinestay has been able to provide guests with a service that is very comparable to what luxury hotel chains provide.
Onefinestay has strong partnerships with people who own homes that average $2 million. Although short stays happen, typically these homes attract travelers who need accommodations for weeks or months. Immediately upon arrival, visitors are greeted by staff from Onefinestay. Guests have a 24-hour hotline in case of lockout or emergency. Every home includes high quality linens and towels, as well as an iPod with preloaded applications for nearby restaurants, shops, attractions, and more.