Fresh off a $40 million funding round, hospitality startup Onefinestay – which bills itself as an upscale Airbnb – is rolling out an initiative targeting the gatekeepers of New York real estate: brokers.
To date, the London-based company has marketed itself to travelers who want to book short-term, high-end properties from its carefully curated portfolio. Now, the startup wants to partner with sales agents, residential brokerages and the boards of co-ops and condos as a way to grow its footprint here.
“What we’re looking to do is grow our listings in New York,” cofounder Evan Frank told The Real Deal. “Our guests are asking for more of what we have.”
A simple way of doing that, he said, is by partnering with brokers whose clients are looking to rent — or rent out –their New York City pads.
Launched in 2009 in London, Onefinestay has been operating in New York for three years. It currently has just shy of 500 listings here with an average rate of $700 to $800 a night, including a townhouse on Perry Street for $719 per night and a studio on Gansevoort Street for $459 a night.
On Monday, Onefinestay announced it had raised $40 million in a Series D round from investors including Intel Capital and Hyatt Hotels. The company has raised a total of $80 million to date. Onefinestay plans to use the latest funding round to support international growth and growth in existing markets.
In New York’s broker-centric world, Onefinestay is piloting an initiative it says can help agents, too. For starters, brokers can pass along their short-term rental business in order to focus on (more lucrative) sales. “It’s not really driving their economic engine,” Frank said. “For us, it’s what we specialize in.”
And Onefinestay’s guestbook may also be a source of leads for brokers. “We have a book of guests and hosts that are vetted, that are affluent. Many reach out looking to buy homes,” said Ryan O’Connor, Onefinestay’s head of business development. And, he added, brokers can use Onefinestay as a marketing tool.
“We can give someone a case study [saying], ‘Hey, this property can generate $340,000 a year if you partner with Onefinestay,’” he said.
O’Connor said despite being a fragmented segment of the market, there is high demand for short-term rentals in New York.
In fact, rival Airbnb generated more than $500 million in sales in New York City over the past several years, according to a 2014 report from the New York Attorney General’s office.
Just last week, Airbnb and realtor.com unveiled a “try before you buy” strategy that similarly partners with the brokerage community. Under a new agreement between the companies, potential buyers using realtor.com can select a new online option to “Airbnb before buying” – meaning, they can book a stay in a particular neighborhood to try things out before buying there.
In Onefinestay’s case, if the broker initiative is successful, Frank said the company would export the strategy to its operations in London and Paris.
In New York, Onefinestay has generated $500,000 in gross revenue via the broker initiative over the past two months, O’Connor said. Onefinestay is working with about a dozen agents, he said, from Douglas Elliman, Corcoran Group and other firms.
Town Residential’s Brandon Trentham said he recently shared a $20,000-a-month rental listing with Onefinestay. “I represented [the owner] in her purchase and she’s gone for the summer,” he said. “From my side, the main thing is just to appease the owner regardless if I do it or they do it. Two heads are better than one.”
Similarly, Scottparks International Realty – which rents out high-end, furnished pads to clients in the entertainment industry – tapped Onefinestay to market several listings over the past six month. CEO Justin Parks said Onefinestay helps to fill his clients’ property when he’s not able to rent it out. “If I rent it for the month of July for $50,000, they could bring someone [else] in … and bring my client that much more income on the property,” he said.
Onefinestay is also working with board of a co-op Building On Riverside And West 89th Street. O’Connor said 40 percent of the building’s owners are signed up to participate. Hosts there can make between $50,000 and $90,000 a year, and the board gets 5 percent to 10 percent, depending on the particular unit.