Onefinestay, the self-styled ‘unhotel’ that can be described as an upmarket Airbnb offering a select portfolio of luxury, city-centre homes kitted out with fancy linens, towels and toiletries so its users can enjoy premium city breaks in locals’ homes, has launched its service in two new locations — bringing its total operational footprint to four. The two new cities, launching today with 24 host homes apiece, are Paris and LA.
Paris and LA were the two most requested locations by onefinestay users and also potential hosts, founder and CEO Greg Marsh tells TechCrunch. The nature of onefinestay’s business requires a supply of upmarket yet frequently unoccupied homes — and Hollywood’s film industry fits that bill perfectly, with plenty of fancy homes in the Hollywood Hills whose owners may well be travelling for months on movie-related business. Paris, meanwhile, has lots of pied-à-terre stock that onefinestay can make use of, says Marsh.
“Our guests are people who would otherwise be staying at upscale, boutique hotels,” he adds, discussing the choice of location. “For us it’s partly about where are the places which people who stayed with us before will want to go and therefore would want to stay with us again if they could?’
Keyvan Nilforoushan, former managing partner at VC firm NextStage, has been appointed as General Manager of onefinestay’s Paris operation. Launch homes are in neighbourhoods including Le Marais, Montmartre and Batignolles, with prices ranging from €150 per night for a one bedroom apartment to more than €700 per night for a four-bedroom home.
Its Los Angeles expansion is being led by Alexandra Rethore, who joined onefinestay from Rent the Runway where she was director of operations. Initial homes in LA are in Santa Monica, Pacific Palisades, Venice, Brentwood and Hollywood, with prices ranging from $250 per night for a one-bedroom apartment to more than $2,000 per night for a four-bedroom house in Venice.
After launching in these two new cities, onefinestay plans to take a breather from new launches for a couple of months to ensure both markets are ticking over before likely ramping up to launch a new city every quarter (“or thereabouts”), according to Marsh. The next two locations aren’t entirely set in stone yet, but he says to expect one in Europe and one in the U.S.
“It’s the sort of places which you’d probably want to go if you were travelling to the states and you had a week free,” he adds.
Onefinestay is a U.K. startup founded in September 2009. It launched its unhotel offering in London around three years ago, where it now has more than 1,000 host homes for travellers to pay to stay in and is able to turn a profit in the market, according to Marsh — which he says “proves the model.” It is not, however, breaking out any customer numbers — but Marsh will say the business has “grown at a pretty steady clip”, and adds that it’s more than 3.5 x the size it was this time last year.
After London, in 2012 onefinestay added New York (where it now has 300 homes), and raised a $12 million Series B, led by Canaan Partners, to help fund the expansion. That round brought its total funding to around $16 million, although it’s likely raised more than that as Marsh says some of its funding has not been made public. It’s also not currently looking to raise a new round, despite doubling its city count — and increasing its on-the-ground headcount to serve the new markets (its total team exceeds 200 people, not including contractors).
What about competition? Airbnb just appointed a global head of hospitality with a remit to improve the guest experience — which potentially starts to stray into onefinestay’s upscale territory, at least for a portion of the homes on Airbnb’s books.
“I’m not sure who we should be most scared of. So we’re a little bit scared of everybody,” says Marsh. “I think though at the moment at least we don’t see many other companies trying to do what we’re doing. We see lots of local mom & pop operators in every market, who have been doing this often for many, many years.
“We’ve been in the market for just over three years, since we launched in London, so we’re still an early stage business in some senses, although we’re growing fast. But I’m sure that there will be competitors who come in. I’m also not sure that it’s going to be as competitive a space early in its evolution as businesses which are less complex.”
Specifically on Airbnb, Marsh adds that onefinestay differentiates its offering by providing a higher-quality bar that’s based partly on paying more not just to stay somewhere nice, but to get a guarantee that a trip will go smoothly and as planned. In other words, if things go wrong, onefinestay’s customer service reps will be at the other end of a phone to help smooth out the wrinkles.
“I don’t think of [Airbnb] as a direct competitor… I think they’ve got bigger fish to fry. They have a very large and rapidly growing business serving a set of guests who are principally value-sensitive and they’re providing a great product for those guests. Or many of them. The hospitality market has always had different segments — it’s a very big market. Estimates vary between $450 and $650 billion a year is spent on hotels so this is just a giant market and that market segments out dramatically,” he says.
“I think Airbnb is a particularly compelling solution for people who are price sensitive — and they clearly have products across the whole range of price points. But I think what we’re providing is a solution for people who more than anything else value their time and our craving an assurance about the promise of their experience — whether that’s a vacation or a business trip. And maybe are willing to pay a bit more for that comfort and that certainty.”
Another aspect of onefinestay’s business is a keyless entry device it’s developed (called Sherlock) — specifically for its hosts to install to make it easier to manage the comings and goings of guests. Marsh isn’t divulging much user data on this for now, saying only that it’s been installed in “dozens” of homes, and that demand for it among hosts is high.
But he suggests there’s work to do on ironing out bugs, and also stresses that the complexities associated with different types of houses and entry environments means no one piece of technology is likely going to be a panacea for the locking/unlocking problem. ”My view is that there’s not going to be one single point fix to what’s a very messy, scrappy problem,” he says. “What you’ll end up with is a battery of solutions, of which this may be one. But there’ll be others.”
However he does reveal that onefinestay has been approached by other companies interested in Sherlock, which he reckons could lead to an additional revenue stream for its business, based on licensing the keyless entry technology down the line. ”We might well consider licensing Sherlock,” he says. “Especially because some of these companies [that have approached it about the device] aren’t directly competing with us.
“Several quite well-known companies have approached us about licensing it. So that’s also something we’ll give some thought to over the next few months.”