Travel is one market the web has consistently disrupted, going back to Travelocity and other dot-com, boom-era companies — but it’s a sector that still keeps turning out new ideas, whether it’s friendly flight-finding a la Hipmunk or peer-to-peer accommodation services like AirBnB.
No surprise, perhaps, to hear that there’s yet another entrant into the travel market, this time in the form of high-end British startup OneFineStay, which has just announced $3.7 million funding from Index Ventures in the hope of going global.
The site, which currently only operates in London, offers what it calls — rather cloyingly — the “unhotel” experience. That’s the chance to vacation in somebody else’s home while receiving the same level of service you’d expect from a four- or five-star hotel (such as concierge, fresh linen, free Wi-Fi and more). Those who choose to rent out their properties, meanwhile, are given the luxury of letting somebody else do all the hard work of running the operation — for a substantial fee.
It’s an unashamedly posh proposition. Host properties are carefully vetted to make sure they’re up to standard, and the average worth of the homes available is £1 million ($1.62 million USD). The target market, says CEO Greg Marsh, is the high-end business traveler, couples looking for a luxury break or just folks with money to spend who want to get away from the traditional hotel experience and enjoy something more local.
“The penny dropped when I was on holiday in Italy — like a lot of people who travel a lot for work, hotels can be depressing,” he says.”Couchsurfing has exploded in recent years and home exchanging is growing and companies like AirBnB are taking off. It made sense.”
The company started in 2009, with money from friends and family. Now it’s on an upward curve.
“The economics are sound,” says Marsh. “We’re getting much more interest from hosts than anyone can keep up with. There’s a vast number of underused homes in London.”
In many ways, that approach of edited mediation between owners and travelers makes it the conceptual opposite of the aforementioned AirBnB, the scrappy Y Combinator company that matches the two groups directly (Om wrote recently about what other startups can learn from its approach).
But OneFineStay’s equally ambitious, in its own way.
The site’s 15 staff currently work with around 50 property owners in London, and the upscale market means it claims to have turned cashflow positive last year — just a few months after its initial launch. Today’s funding announcement brings in a significant boost of cash from Index Ventures, where Marsh was previously an associate (“Better the devil you know,” he told me).
Index partner Robin Klein will sit on the board, and the plan for the funding is to help OneFineStay extend its model to new cities. New York and Paris are the frontrunners, Marsh says, along with other international hotspots like Milan and Berlin.
A viable idea? If nothing else, the success of owner-controlled vacation rental sites like HomeAway proves there’s a market — and if jetsetting customers and property owners are happy to pay for somebody to do all the dirty work, then who can argue, even if it seems like OneFineStay sometimes takes that “dirty work” a bit too literally?
“Last October we had a photographer who was coming to take photos of one of our properties when the cleaner dropped out at the last minute” says Marsh. “There I was on my hands and knees scrubbing the floor to make sure it looked perfect in the photos, while in the other hand I had my mobile trying to secure investment.”
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