Casa Koko in Punta Mita, Mexico. (Source: Onefinestay)

Onefinestay Bets on Loyalty Program to Keep Luxury Airbnbs at Bay

(Bloomberg) -- Nearly two years into Accor SA’s $168 million play for a piece of the home-sharing pie, the multinational hotel group is throwing down the luxury gauntlet: free, round-the-clock concierge service for an entire year after your vacation. Called “Higher Living,” the offering was announced on Friday by Onefinestay, the luxury rental brand founded in 2009 and acquired by Accor in 2016.

Higher Living is being pegged as a loyalty program of sorts as Accor rapidly expands its footprint, becoming the first major hotel group to actively embrace home sharing. Last year they purchased Travel Keys and Squarebreak and merged them with Onefinestay, quadrupling the rental company’s portfolio overnight, from more than 2,000 units in 13 locales to more than 10,000 rentals in 200-plus destinations.

What sets Onefinestay’s privately owned properties apart from those on Airbnb, VRBO, and other peer-to-peer sites is that each one—from a beachfront villa in Anguilla to a penthouse in San Francisco—is heavily scrutinized in person and vetted against a checklist of 300 characteristics. In addition, there’s a consistent, hotel-like quality to every stay, from the toiletries (Le Labo in the U.S., L’Occitane in Paris, for example) to an on-call concierge to procure hard-to-get theater tickets, private chefs, or dog-sledding excursions in Courchevel. Those concierges now staff the Higher Living program.

Javier Cedillo-Espin, Onefinestay’s chief executive officer, likens Higher Living to the modern-day version of a butler, “almost like a guardian angel delivering local experiences,” he tells Pursuits in an interview.

Unlike traditional loyalty programs, Higher Living does not involve points, a tiered structure, or endless marketing emails, and guests are automatically enrolled from the minute a getaway ends. Need help finding a photographer for a family photo shoot? Just call, text, email, or use the dedicated mobile app to ask an on-staff Onefinestay concierge to find one; the only thing you pay for is the photo shoot. Planning your kid’s birthday party? Consider the venue, cake, and decorations handled. You can also use the service to arrange day trips or just send flowers. It’s a doubling down on Onefinestay’s view of itself as a full-fledged hospitality company, rather than merely a place to go for high-end rentals.

“Most of the time, you leave a trip and it’s over. Guests feel that they’re kicked out of their experience,” Cedillo-Espin says. “We’re taking the opposite approach and actually coming back with you.”

The inspiration for what he calls a “relationship program” came from months of research.

“When I learned how many times our guests and travel planners communicate during the booking process, I realized that we get such a high degree of information,” he says. “We get into your life, so we’d like to make sure we’re acting on it.” The more customers use Higher Living, the more data will be put into their profiles, so when the time comes for another trip, the booking process will be that much more seamless and personalized.

Rebookings are the ultimate goal for any loyalty program: After 12 months, the program expires unless a new booking is made (or a yet-to-be-decided fee is paid). Book a new trip, and another complimentary year starts immediately. Only the person who pays for a Onefinestay property can submit requests to the concierges—something to consider when splitting a rental with another couple or family.

Noting Onefinestay’s strongly positive word-of-mouth reputation, Cedillo-Espin pegs his company’s success on its ability to foster memorable experiences. “People trust us in a way that they seldom trust brands. And for me, that’s the biggest difference.”

Take segment-leader Airbnb Inc. Its 4 million listings and 65,000 cities include upscale properties, but it is far from being perceived as a luxury company. That may all change when its “Lux” tier debuts in the coming months; the new collection will comprise about 4,000 properties from Canada-based Luxury Retreats, which it acquired last year for $300 million—but the peer-to-peer rental behemoth says it has no plans yet to provide a comparable high-touch concierge service. In addition, Airbnb doesn’t pay commissions to travel agents, which Onefinestay does, incentivizing agents to consider its properties on par with hotels.

While that goes far to build bridges on the business side, David Lowy, president of Renshaw Travel and an expert in luxury travel, is less bullish on the idea that concierges are the way to engender customer loyalty.

“I don’t think [they] necessarily add value or will be a deciding factor as to why someone should book a villa,” he says when asked about concierge programs as rewards in a general sense. (Bloomberg received Onefinestay’s announcement under embargo.) “People booking high-end vacations already have access to tickets and dinner reservations and so on.”

American Express Platinum cardholders, for example, receive similar benefits for an annual fee of $550. Wealthy customers often have executive assistants or may already belong to a commercial concierge company such as Quintessentially.

Jack Ezon of Ovation Vacations sees a concierge program more as brand-building than business-moving. “It may be one carrot of many to entice people to use one company over another,” he says, “but at the end of the day—like concierge services that financial firms gift out—it is about generating long-term good will and the feeling that you don’t want to replace your firm because they care about you.”

This sentiment especially makes sense when you consider that some of Onefinestay’s properties are non-exclusive and listed on booking platforms with less personalized attention; the high-touch human element is the only thing setting them apart.

However Higher Living shakes out, Onefinestay will continue fine-tuning its inventory, proactively adding and dropping homes. Its beach collection includes more than 4,000 rentals from Hawaii to Bali; in 2018, it is looking to expand in the south of France and Greece. In the countryside, Provence, France, Tuscany, Italy, and Napa, Calif., will remain a focus, and the ski chalet collection will see growth in the North American market, including Vail and Aspen in Colorado and Lake Tahoe on the Nevada-California border.

More than anything else, Cedillo-Espin believes he is in the business of making people happy, and Onefinestay prides itself on its ability to deliver not only on wow-factor accommodations, but hot-air balloon rides and Alpine motor-skiing excursions to match. “The customer has become more demanding about what they require,” he says. “There are millions of experiences out there, and we’re focused on making sure they have the very best.”

©2018 Bloomberg L.P.

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