The Real Deal New York

Piggybacking off of Airbnb

A cottage industry has sprouted up to capitalize on the short-term rental craze, providing everything from key exchange services to market analysis
By Ariel Stulberg | March 01, 2016 11:26AM
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Keycafe’s Clayton Brown and Jason Crabb

UPDATED: March 16, 12:18: As Airbnb has grown, so has the number of companies piggybacking on it and its rivals in the short-term rental market space. Firms like Keycafe, Pillow, AirDNA, Guesty and Happy Host are creating niches for themselves by offering marketing, cleaning, management and data analysis. These startups typically serve the most dedicated short-term hosts, but they have also marketed themselves to property investors, hotel research firms, global financial institutions, restaurants and, in at least one case, dog walkers. Some are thriving, but competition is fierce. The Real Deal tracked down the leaders of three of the companies operating in Airbnb’s shadow. Below is a rundown of who they are and what they do.

Happy Host

Some short-term rental hosts just want the income, without all that pesky management work. NYC-based Happy Host, which just launched in late 2015, is one of an array of new companies offering property management services. Like its larger and more established counterparts — Los Angeles-based Pillow and San Francisco-based Guesty — Happy Host creates professional, search-engine-optimized profiles for clients to post on Airbnb, screens and communicates with guests, sets up key exchanges and transportation, organizes cleaning and deals with emergencies.

“I was traveling 300 nights a year,” said the company’s 29-year-old founder, Blake Hinckley, a former Boston Consulting Group employee. “I was interested in Airbnb-ing my own apartment, but I didn’t have the time. I calculated I was missing out on $42,000 a year.”

Happy Host seeks to differentiate itself by focusing on the luxury end of the New York short-term rental market — and providing hands-on attention.

Hinckley, who has two part-time employees, screens guests on behalf of hosts, even calling some. He then personally greets them when they arrive.

Blake-Hinkley

Happy Host’s Blake Hinckley

Happy Host, which is currently managing 16 listings in Brooklyn and Manhattan, charges a hefty commission: 20 percent of the rental income. “For our economics to work, it requires [a listing with] an average per-night cost of about $200,“ said Hinckley. “The more the better. Our most expensive listing goes for $1,200 a night.”

Still, he avoids working with hosts who rent out multiple homes as investment properties, citing, among other things, the potential that Airbnb and its peers may soon face tighter legal scrutiny. Airbnb hosts are currently not allowed to rent out homes for less than 30 days if they are not present, but that law is regularly flouted.

“We haven’t tried to reach out to the folks with 20 to 30 listings,” Hinckley said. “Though I think we could make a lot of money from doing so. I want to stay on the right side of where I think the regulation is going to go.”

Keycafe

The Vancouver-based firm founded in 2013 started out offering just one service: creating a system for short-term rental hosts — or anyone else for that matter — to digitize keys and control access to their property remotely, via their computers and mobile devices.

The company partners with cafes, restaurants, delis, convenience stores and other local businesses. Hosts then drop off their keys with those businesses, where a digital fob is attached to the key ring. The keys are then placed into Keycafe’s special boxes, which are secured by digital password-protected keypads. Guests can then pick up the keys using the code provided by the host. No human interaction is required. And the host gets an automatic update once the key has been taken.

“People were doing it anyway,” said Jason Crabb, a former marketing executive who founded Keycafe with Clayton Brown, referring to hosts tapping local businesses to help with key exchanges. “We just created a way for people to digitize it.”

Brown and Crabb, both avid Airbnb users, concentrated their initial efforts on short-term renters but quickly saw interest from a wider set of users. Homeowners and renters wanted a way to remotely control access for service workers like home cleaners, dog walkers and even so-called cat nannies, Crabb said.

Even real estate brokers use the service to let photographers, interior designers and others into listed apartments, Crabb said. Today, only about half the service’s 40,000 active users are involved in short-term rentals.

Keycafe operates in eight cities — New York, San Francisco, London, Paris, Austin, Seattle, Toronto and Vancouver — with over 200 local partners. The firm has 90 New York City partners and, according to Crabb, one key exchange per minute in the Big Apple.

The company said it works “quite closely” with Airbnb. Its service is embedded into Airbnb’s software platform, allowing users to choose a Keycafe key exchange location from a drop-down menu on the site.

AirDNA

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AirDNA’s Scott Shatford

AirDNA started with a focus on “hardcore” Airbnb hosts, providing them with information and insights on how to squeeze the most money out of renting their properties.

But it’s since grown into a broader business that not only serves hosts but also provides market research and analysis to investors, hotel industry players and even global banks. It supplies data, for example, to the likes of Bank of America, Merrill Lynch and HVS Hospitality Services, which use the stats to analyze the short-term rental market nationally and globally. The company charges between $30 and $80 per report, depending on the number of properties in the geographical area in question.

The Santa Monica-based firm capitalized on the fact that Airbnb was not providing comprehensive data about its users’ activity.

Along with competitors Everbooked and SmartHost, AirDNA maintains constantly updated market reports on 4,500 different locations worldwide. It also advises hosts on demand levels and gives them intel on how to price their properties. For example, if a convention is coming to town and demand spikes, AirDNA notifies host clients that they should increase asking rates. The company also provides metrics on occupancy and revenue per available room (RevPar), equivalent to those used by the hotel industry.

“Lots of places are being undervalued based on their potential as short-term rentals,” said company co-founder and CEO Scott Shatford, explaining that all properties should factor short-term rental value into appraisals. AirDNA, he said, offers a better way to determine “the value of properties that are being rented.”

The company performs data scrapes of Airbnb’s listings and listings on rival sites. It then creates reports based on those scrapes, which contain listing volume, pricing, booking and other metrics. AirDNA scrapes a million listings a day, according to Shatford. 

Shatford, a “professional” Airbnb host who lists five properties, officially launched AirDNA last April along with his father, Will Shatford, a web developer and database manager. The father-son duo had previously founded Rentingyourplace.com, which offered tips and data to Airbnb hosts and served as a platform to sell Shatford’s e-book, “The Airbnb Expert’s Playbook — Secrets of a Six-Figure Rentalpreneur.”

AirDNA now has eight full-time employees and recently opened an office in Barcelona, one of Europe’s largest Airbnb markets.

Correction: A previous version of the article gave Blake Hinckley’s age as 25 years old. His surname was also misspelled.