Marriott International is dipping its toe into the frenzied Hamptons rental market.
The hotel management company’s short-term rental business, Homes & Villas by Marriott, has partnered with Hamptons rental company StayMarquis to offer hotel-quality properties and concierge services to guests, the companies announced.
When Homes & Villas launched last May, Marriott said the move reflected the evident evolution of “consumer travel needs.” Rental guests can also use and earn points via Marriott’s loyalty program, which has over 140 million members.
Within a month, Airbnb responded by rolling out its high-end vertical, Airbnb Luxe, for properties charging a nightly $1,000 or more. Most of the listings came from Luxury Retreats.
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Hotel occupancy has fallen dramatically since the pandemic hit the U.S. in March. Marriott furloughed tens of thousands of workers and the hotel industry asked the federal government for a bailout.
The Hamptons rental market was another story, with demand surging as well-heeled New York City residents sought refuge in sprawling East End houses with cushy amenities such as tennis courts and pools.
Jennifer Hsieh, vice president of Marriott’s Home & Villas, said the Hamptons was a market the company had been looking to break into for its appeal to “millions of New York [Bonvoy] members.”
In her statement, Hsieh added that Homes & Villas is “well positioned to capitalize on the current travel mindset favoring drive-to destinations” amid the pandemic.
StayMarquis was founded by Long Island natives Bryan Fedner and Alex Goldstein. According to Fedner, the pair had managed a handful of summer rentals in the Hamptons since their college days but decided to dive in full-time after Airbnb acquired high-end rental firm Luxury Retreats for $300 million in 2017.
(Fedner later clarified that a high-ticket acquisition isn’t their goal. “The business we’re building is here for the long run, regardless of an acquisition,” he explained.)
There are about 600 properties on the StayMarquis platform, all of which are owned by individuals who pay the company a commission for renting out their homes. The company distributes its listings to other sites, including Airbnb, Vrbo and HomeAway. Askings rents range from $300 a night for a bungalow to $15,000 per night.
StayMarquis charges a 10 percent commission to market a home and process the renter’s payment, or 20 percent to handle the transaction, provide 24/7 concierge service and outfit the property with premium linens, towels and bath amenities.
Concierge services include a “guest experience manager” who greets renters when they first arrive, troubleshoots any property issues and books services such as grocery delivery or a private chef.
The 150 StayMarquis rentals that Marriott has listed in its network are properties managed under the 20-percent model.
Fedner said Marriott initiated the conversation at a conference last fall. “Hamptons was a market they really wanted to get in because they don’t have any hotel exposure,” he said.
Hsieh confirmed that Marriott is adding rental inventory “especially in markets where we do not have hotels.” Home & Villas properties are available in 250 locations, 80 of which do not have its hotels, she said.
She added that Marriott is expecting to see a surge in bookings and searches for rentals in the western U.S. over the coming weeks, and is now prioritizing adding homes in Oregon, California and Colorado to its network.
Marriott was considering several short-term rental companies, among them StayMarquis, and conducted six months of due diligence before cementing the partnership, Fedner said.
“They really looked at every facet of our business,” be it data security, paying taxes and insurance, he said.
Fedner noted that StayMarquis has no external investors and “has been cash flow–positive since day one.” He said StayMarquis might seek external funding in the future to expand to other markets, which is “on the horizon.”
Write to Erin Hudson at ekh@therealdeal.com