24 May 2018

Hyatt Invests in Home-Rentals Firm

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Hyatt Hotels Corp. invested in onefinestay, a closely held company that enables travelers to rent upscale private homes, the rare instance of a major hotel operator aligning with the burgeoning home-rental industry. Onefinestay matches homeowners looking to rent their residences in London, New York, Los Angeles and Paris with travelers. It manages a portfolio of more than 2,500 homes with a combined value of more than $5 billion, said the company.

It is unclear how much Hyatt invested in onefinestay, but a person familiar with the matter said it was part of a nearly $40 million round of funding that was completed at the end of last year. Last fall, Hyatt sold for about $220 million a time-share operation with units in states like Florida, Arizona and Colorado. The company doesn’t view that business as the same as onefinestay’s urban home-rental operations.

Onefinestay has a fraction of the inventory managed by home- and vacation-rental firms such as Airbnb Inc. and HomeAway Inc., which each have more than a million listings, according to a report from investment bank Evercore Partners. Hyatt’s investment is likely to capture the attention of rivals such as Marriott International Inc. and Hilton Worldwide Holdings Inc., which hotel consultants say have been monitoring closely the impact of the home-rental companies on the lodging business.

Hyatt’s stake in onefinestay is the clearest sign yet that a major hotel operator views the home-rental market as a viable business. For the most part, hotel executives have tried to distance their companies from the home-rental startups. They have said these firms aren’t competitors because they don’t offer the same security measures and quality-control found in hotels and don’t necessarily compete for the same customer.

Executives at onefinestay, launched in London in 2010, say the company provides a service closer to what is found in a luxury hotel than the chains acknowledge. The company partners with owners of higher-end properties, setting a price for the guest’s stay and charging the owner a fee. It also offers a higher-level of service than the larger home-rental companies including Airbnb, though that company recently said it would be pursuing more vacation rentals as tighter local government controls impede on its core urban business.

Staff from onefinestay greet visitors when they arrive at the home and provide them with a 24-hour hotline in case they get locked out or something at the home goes wrong. Onefinestay homes are stocked with fresh linens and towels, and an iPhone preloaded with apps recommending local shops, restaurants and attractions.

The high-end home-rental companies may find they face some of the same legal challenges as Airbnb. In New York, for instance, politicians have said that many Airbnb hosts run afoul of a 2010 state lodging law that prohibits people from renting their apartments for fewer than 30 days unless the occupants are also present.

Onefinestay hosts could be in violation of the same New York law if they rent entire homes for less than a month. But with only about 500 listings in New York, the company hasn’t faced the criticism that Airbnb has seen with its much larger New York listings.

Click here to access the full article on The Wall Street Journal. 

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