Airbnb is facing it’s next big challenge – to legalize subleasing and attract the five-star hotel market. Airbnb has been looking at ways to attract customers who would rather book at high-end luxury hotels. This has initiated their project called ‘Select’ that will offer both luxury homes and 5-star style rooms to Airbnb customers. According to a report by The Information, Airbnb is planning a limited launch of ‘Select’ vacation rentals in 2018. The company is reportedly aiming to offer hundreds of thousands of Select homes in the near future.
To qualify for the ‘Select’ status, hosts will need to allow Airbnb inspectors to check that their rental meets a specific set of quality standards. Higher-end rentals also come with higher costs of monitoring the properties. To help homeowners ensure their properties are up to par, the Select program will offer the opportunity for Airbnb hosts to collect funds to offer only the best to their guests. These funds are expected to be used to conduct home improvements, such as remodeling or repainting in order to bring their standards up. The exact details are not yet set. This project will also provide more job opportunities within Airbnb with the need to hire inspectors and photographers.
Another new Airbnb initiative is to build its own branded apartment complex in Florida. Airbnb has created a partnership with the Miami-based Newgard Development Group. Florida has been a state where strict regulations have threatened Airbnb’s growth. Through this initiative, Airbnb is hoping to further challenge the traditional hotel industry in an even more challenging area. The first complex is said to be a 324-unit building in Kissimmee, Florida. The apartments will feature amenities like door lock keypads rather than physical keys, making it easier for self-check-in. According to a statement from Newgard and Airbnb, year-long tenants will sign annual contracts and be able to rent rooms or units for up to 50% or 180 nights per year and will share revenue with the landlords who own the units. The Newgard Development Group is funding the building costs and will own the buildings, while Airbnb will help to design the apartments and the buildings, including the amenities. Amenities like apartment cleaning, fresh sets of linens, and possibly even valet parking will be provided. Airbnb is taking this as a pilot opportunity and if they see that it succeeds they hope to make this an international initiative. Newguard Development CEO, Harvey Hernandez, realized that tenants were struggling to afford homes in the places they really wanted to live. “This project brings the opportunity for all our tenants to monetize the units they rent from us,” Hernandez says.
Newguard approached Airbnb with this idea to create a home-sharing based community that can be scaled. This project is not a hotel, rather it “elevates the developments”. Each rental experience is individual, “The host has the opportunity to create a personalized experience for each guest.” Airbnb is trying to deliver a higher quality vacation rental by empowering Airbnb hosts to offer a luxury travel experience to their guests. They are also working to solve the anti short-term rental movement by bringing tenants and landlords together in a clear agreement over short-term rentals. The aim is to share revenue between hosts and landlords, that way everyone wins. As city regulations have become a big threat to Airbnb’s growth, this will help increase hosting by approximately 100 percent, and in a legitimate and legal way. With revenue share between the landlord and the property manager, everyone wins.
These are entirely different entities from Airbnb’s original initiative. Airbnb is putting a growing emphasis on legal and upscale rentals, something that was not emphasized with the company’s start. The ‘Airbnb Select’ project focuses on luxury rentals and is hoping through this initiative to reel in the older generation to the short-term rental industry. The Airbnb partnership with the Newguard Development project is hoping to create a shared wealth opportunity for both landlords, developers and tenants alike. This program could help Airbnb attract new customers. With these luxury vetted homes and high-quality accommodations, Airbnb is aiming to target a new marketplace… but will they succeed?