Airbnb Launches $1,000+ per Night Luxury Rental Tier with More Than 2,000 Properties

Airbnb Enters the 'Luxe' Market with Listings That Includes a $1 Million per booking Polynesian Island

Airbnb Luxe went live Tuesday with a portfolio of 2,000 homes—includes castles, entire villages, and beachfront villas.

A two-bedroom condominiums in the Caribbean starts at around $600 a night during low season. But the price can go as high as $1 million a week for a private atoll in French Polynesia called Nukutepipi that comprises 21 bedrooms, four pools and a staff of 50.

French Polynesian paradise

French Polynesian paradise, the $1 million per booking, 7-day minimum listing.

The firm said each listing has passed a “strict evaluation” of more than 300 criteria to meet Airbnb’s standards in areas such as design, appliances, materials, location, surroundings and services—like the chef, driver and butler services.

All the homes were selected from the 5,000 properties listed on Luxury Retreats, a Canadian high-end vacation rental company that Airbnb acquired in 2017.

 We have an overall strategy of having a product for every traveler, and Luxe is for the ones seeking luxury,” said Brian Chesky, Airbnb’s chief executive and co-founder.

Airbnb has seen a 60 percent increase in the last year in bookings that cost $1,000 or more a night, Mr. Chesky said (he declined to be more specific).

Luxury travelers have been eyeing high-quality home-rentals for a while, says Nick Guezen, Airbnb’s global director of portfolio strategy. But the market hasn’t offered enough security to high-profile and mega-rich clients who seek privacy, he says. “I think that's something that was missing—the idea of ‘I want to travel to a luxury home, but I’m not sure where to find it or who to trust.’”

Which is not entirely the case, considering Accor SA-owned Onefinestay, the second-home rental platform ThirdHome, and apartment-rental company Paris Perfect are all established competitors in the space. And Airbnb Luxe itself is essentially a re-branding of the acquired Luxury Retreats.

The company is betting on the strength of its brand to give it the competitive edge. 

Every Luxe renter, unlike Airbnb's regular or higher-tier Plus listings renter, is assigned a trip designer. Like a concierge, butler or travel adviser, a trip designer helps renters arrange every aspect of their stay, from airport transfers and restaurant reservations to childcare to private chefs or in-house massage therapists.

Homeowners or their representatives must apply to be part of Luxe. Many of the homes are owned by mega-wealthy families, including billionaires and celebrities, Guezen says. In order to protect the host's privacy, guests are never told who owns the property and each home is stripped of anything that could personally identify them, like a bedside photograph or snail mail. Staff are advised not to disclose the identity of hosts or guests and each property is insured by Airbnb's standard $1 million guarantee to cover any damages.

Even with this level of detail, it will be a challenge for Airbnb to gain credibility in the luxury travel sector, said Rummy Pandit, the executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in New Jersey.

Airbnb has a reputation of being a more affordable alternative to a hotel, and the company needs to build a track record in a new area and appeal to a new demographic of travelers,” he said. “That's not easy to do in a market that's ultracompetitive.”

Conquering the luxury rental market will allow Airbnb to sell itself as a company that can not only comply with official rules, but also cater to the world's richest—and most demanding— travelers. “This is a way for a luxury traveler to book a home without any worries or hassle,” Guezen says. “We can give them something that is vetted and can be trusted.”

In April, Airbnb took over 10 floors of New York's 75 Rockefeller Plaza with plans to convert them into 200 overnight apartment-style suites.

Airbnb will face heat from competitors including HomeAway and Oliver's Travels. Marriott recently ventured into the home rental business with the launch of Homes & Villas by Marriott International, which offers 2,000 rentals in more than a 100 destinations globally. Last week, Four Seasons Hotels & Resorts announced Four Seasons Private Retreats, a collection of more than 750 upscale rental villas and homes in 21 destinations including Kyoto, Japan; the Seychelles; and Whistler, in Canada.

The overwhelming demand for vacation home rentals may go in Airbnb's favor. Skift Research estimates that in 2018 alternative accommodations, which include these rentals, generated $22.7 billion in revenue. This year, Skift expects this sector's revenue to grow 30 percent to nearly $30 billion.

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