A hybrid of hospitality and private homes, onefinestay shares its unique take on “handmade hospitality.”
By Fiona Soltes
As ideal locations go, the latest may well be an upscale private home with luxury-resort hospitality – sitting squarely at the intersection of traditional hotels and sharing economy businesses like Airbnb.
In mid-2016, leading European hotel operator Accor acquired residential vacation rental company onefinestay in a deal worth more than $240 million. Founded in 2009, onefinestay already was in a category of its own, providing personal vetting of rental locations, property preparation, greeting upon arrival and 24-hour availability during each guest’s stay.
The acquisition, however, builds a creative bridge right through the heart of the ever-popular collaborative economy, allowing Accor to please customers with different needs and expectations. Granted, onefinestay’s properties are on the higher end of the scale than the average Airbnb. But the merger means the same customer might stay at a Sofitel on one trip, and a private apartment in another.
“We’re huge fans of Airbnb,” said onefinestay CEO Evan Frank. “But it is a different business.”
A different business, indeed – and a different tactic for making things work in changing times. Whether known as the sharing economy, peer economy, collaborative consumption or another name, the practice of reserving a stranger’s property – living space, car, tools, bicycle or other item – has continued to grow. Juniper Research projects sharing economy platforms will rise from $6.4 billion in 2015 to $20.4 billion in 2020. In addition, Pew Research Center reported in 2016 that 72 percent of Americans have now used some type of shared or on-demand online service (11 percent, online home-sharing services).
“We have a sector that is growing, by any measure, exceptionally quickly,” said Frank, adding that onefinestay will continue to operate independently, though the acquisition allows for greater cross-promotion. “If you look at the vacation rental market, three or four years ago it was $40–50 billion globally, and now it’s $100 billion. Hotels are not seeing that kind of growth. They’ve looked at what’s happened with Airbnb, and thought, ‘That’s great. Let’s get a piece of that.’ What’s been achieved in just a few years is impressive. You think about growth if you’re a CEO, but also a portfolio of choice.”
In search of the social experience
Some in the hotel industry continue to dismiss the possibility of threat from Airbnb, HomeAway, VRBO and their ilk. There are, after all, those matters of trust, security and consistent experience. As for sharing economy experts, they’ve begun pointing out opportunity rather than risk.
“I think the hotel industry has an awesome opportunity to learn from the sharing economy and to partner with home-sharing platforms and hosts to create a unique, novel and exciting experience for travelers,” said Chelsea Rustrum, author of “It’s a Shareable Life” and new economy consultant.
“To me, there is such a need to switch up the travel model and create something in between an Airbnb, a hostel, co-living networks and hotel. The ‘flashpacking,’ digitally connected, 25–30 something adults of today don’t necessarily want to stay in a typical white-washed hotel room where they’ll be sectioned off from any kind of social experience. Conversely, they need a place to work, to eat, to hang out and meet other people. These travelers aren’t interested in fireball shot parties on the rooftop, but they’d definitely be keen to have a farm-to-table meal with a group of other travelers or participate in a wine and cheese soiree.”
What interests them, she said, is a social experience; fast, reliable internet; a good place to work; and a quiet, central place to sleep.
“But they don’t need a fancy large hotel room with lots of amenities, either,” she said. “They need and want to meet other travelers and locals alike. They want to feel a sense of community. They want to spend less on sleeping and more on the experience of being in a city.”
The onefinestay acquisition is certainly one example of cooperation within this collaborative community. But it’s not the only one. Rachel Botsman, writer, commentator, speaker and global authority on the way collaboration and trust enabled by technology is changing our lives, also points to Wyndham’s investment in London-based LoveHomeSwap, Marriott’s partnership with LiquidSpace and Qantas partnering with Airbnb.
“Above new sources of revenue,” she said, “I think that traditional travel companies are looking for a new and relevant story to tell their customers.”
Technology is a driving force behind all of this change, especially since it has made it easier to trust strangers.
“In different ways, it reduces the unknowns of people we have never met,” Botsman said. “For example, through social networks we can find out if someone went to the same school or is a friend of a friend. Ratings and reviews enable us to see what other people think of a stranger.”
The beginnings of the trust revolution
In the first phase of the sharing economy, she said, “Trust, for the most part, stayed online. You bought goods, for example, on eBay. But now, technology is creating enough trust for us to use the internet to get off the internet and meet up in the real world. We are only in the early stages of this trust revolution, and already we see how it enables us to go on dates or stay in the home of a stranger.”
The question remains, however, whether “trust” can only come through increased consumer protection via regulation.
In late 2017, the Federal Trade Commission (FTC) released “The ‘Sharing’ Economy: Issues Facing Platforms, Participants and Regulators.” The report summarized a June 2015 FTC public workshop, and highlighted both competitive benefits and potential consumer protection challenges presented by the movement.
Workshop participants, the report said, generally recognized that the services provided by Uber drivers and other suppliers in the for-hire transport sector were similar in important respects to the services provided by taxi drivers.
In contrast, the workshop participants disagreed on the level of difference between platform lodging suppliers such as Airbnb hosts and traditional hotels and bed-and-breakfasts.
“Airbnb claimed that hosts generally are individual residents who allow guests to stay in their homes once in a while, and should not be subject to regulations applied to hotels and bed-and-breakfasts,” the report stated. “Hotels disagreed, claiming in part that many Airbnb hosts are in fact operating commercially and thus should be similarly regulated.”
The platforms, according to the report, emphasized that their ratings mechanisms and other policies “help address the need to protect consumers and the public. Uber, for example, vets its own drivers, and its rating system is intended to promote safe and effective service. Airbnb has a rating system and handles guests’ payments, transmitting them to the hosts only after the guests have checked in. Airbnb and Uber also take other significant steps to provide guarantees and insurance products to suppliers. However, disputes remain as to the adequacy of some of these measures, for example, whether background checks for platform-based drivers should include fingerprinting.”
There’s still much debate about the level of regulation needed, and at what point it hinders potential growth. (For what it’s worth, a 2015 PricewaterhouseCoopers report, “The Sharing Economy,” showed that 64 percent of consumers say that in the sharing economy, peer regulation is more important than government regulation.) Specific areas of regulatory concern, however, include general public safety, reputation systems and other trust mechanisms, and insurance. Also part of the ongoing conversation are issues of taxation, zoning/preservation of residential neighborhoods and service to the disabled/disadvantaged.
“Regulation and innovation will always butt heads in the early stages of change,” Botsman said. “We are already seeing many regulators change their tune in terms of figuring out ways to keep providers and customers safe versus trying to stop behaviors that have become mainstream. I think we still have a long way to go in terms of regulation and figuring out the role it can effectively play in self-regulated markets. I predict that we will see a wave of regulations trying to protect market competition and also coming down harder on the platforms in terms of their responsibility to providers. We will also see clearer regulation in terms of distinguishing between different types of providers.”
There’s a massive difference, she noted, between “a family who rents out their house once a year on Airbnb to help pay for a holiday versus a landlord who owns several properties rented out full-time.”
And the latter is a good example of how the industry has changed over time.
“When I wrote ‘What’s Mine is Yours’ in 2009, I didn’t think the likes of Airbnb and Uber would become these new network monopolies so fast,” Botsman said. “And that they would not only create a new type of travel, or a way to get from A to B, but would become multi-billion-dollar platforms that would lead the way in redefining a category.”
As for Rustrum, she admits feeling a sense of loss about the fact the sharing economy has become more of a business model than a movement.
“I’m definitely still feeling like we need to integrate the idea of sharing into the very way we do business through sharing ownership and some governance with users, members, providers and participants of the sharing economy and any digital platform, for that matter.”
Shared values, shared vision
As technology and the possibilities it creates continue to advance, there may yet be occasion for traditional hotels to stand out. As Rustrum puts it, “I think people actually like talking to other humans, asking for personal advice on where to eat or connecting with a warm smile.”
Botsman adds that the use of big data and personalization can help members of the hospitality industry compete. “I think data scientists are like the new guest managers in terms of their role in helping to deliver to guests the experience of, ‘you know me, what I want and when.’” Another priority for the industry: Reimagining communal areas such as lounges, work areas, laundry bars, kitchens and the like to bring guests together [she cites Jo&Joe as an example].
The future likely will bring both refined services from traditional hotels as well as additional unique collaborations with sharing platforms. In the case of onefinestay and Accor, Frank said it ultimately was shared values and shared vision that brought the companies together.
Regardless of who owns the property, be it individual or company, the goal is still to deliver an experience that will engender another one.
“We really think of ourselves as a hospitality business within a home setting,” Frank said. “The fact that these are people’s real homes is important and needs to come through…. We’re going to look after you during your stay locally, we will respond should anything go wrong and will ensure you are having a unique and distinct experience with us.”
onefinestay, he added, is not a technology company – and that may be a crucial point in coming days. Pew Research reports that 58 percent of home-sharing users consider such services as software companies first, rather than hospitality businesses.
Today’s hotelier, then, can still find distinction and market share by valuing that hospitality – and focusing on an enriched customer experience. ■
Sharing the numbers
16% vs. 9%
Those ages 35–44 are nearly twice as likely as those ages 18–24 to have used a home-sharing service (16 percent vs. 9 percent).
42 years old
The median age of home-sharing users in the U.S. is 42, almost a decade older than the median age of ride-hailing users.
Adventurous or risky?
More than half of users consider sharing services best suited to “adventurous travelers,” and 18 percent consider them generally risky.
18–24 years old
Those who are most excited about the sharing economy once they’ve tried it tend to be 18–24 years old; in households with income between $50,000 and $75,000; and/or those with kids under 18 at home.
The majority don’t trust
72 percent agree that the sharing economy experience isn’t consistent. In addition, 69 percent agree that they won’t trust sharing economy companies until they’re recommended by someone they trust.