Reinventing Luxury Holiday Home RentalsWritten by Jenora V
With their one-of-a-kind social platform, Stay One Degree is reinventing luxury holiday home rentals, restoring trust for a hesitant audience scared off by horror stories of Airbnb scams and wrecked homes.
In the luxury travel world where social media is king, Stay One Degree is pioneering one very simple technological solution to rebuild trust and boost consumer confidence: a social network that connects homeowners and travellers. Riffing off the idea of ‘six degrees of separation,’ co-founder Jorge Munoz has married the best of social media with real-life connections in his luxury home rental site. “The initial idea, the niche of the business, is about renting from people that you know, a friend of a friend, or a connection in your network, and empowering homeowners to decide who they rent to, and who they don’t,” he explains. Addressing a major pain point in the online luxury travel market, the two-year-old enterprise that marries a social network with a marketplace is well on its way to becoming a global giant in the luxury holiday home rental industry.
“Right now, the top five players only account for 20% of the overall market,” Jorge states. “And 40% of holiday home owners do not rent their property for fear of property damage.” As Stay One Degree sees it, the issue preventing both big players from cornering more of the market and homeowners from subscribing to third-party rental services – be those Airbnb or other rental companies – is a pervasive sense of risk. To mitigate that, they introduce the personal, facilitating transactions between people homeowners already know, or share a mutual friend with. “We’re giving people an alternative to transacting anonymously.”
Recognising the business’s massive potential to amplify its market share, investors have capitalised upon this opportunity – Stay One Degree raised USD 1.5 million in their first round of funding in early 2018. Jorge puts their success in raising investment down to their ability to establish strong evidence that their concept could be successful. “I think any early-stage funding is always a difficult task. You’ve got to have not only a very good concept but in many cases, investors will also demand proof of concept,” he says.
Together with co-founder Thomas Bennett, Jorge bootstrapped the company through its initial phases, growing the company organically. “It wasn’t really until the end of 2017 that we decided to do a public launch when we felt we had the necessary scale with 400 homes on the site. At the same time, we started to have growth from virtually any metric you looked at which demonstrated the concept was very well received.”
Unlike other digital travel booking services on the market, Stay One Degree resolves the trust issues of transacting with strangers. “We vet every single home. Amongst other checks, for every home that joins our network, we request proof of ownership to ensure the person posting the home is the lawful owner of the property or its manager,” Jorge assures. Equally, the first line of protection applies to the homeowner: if they don’t feel comfortable, they’re completely entitled to decide not to rent their homes. The reality is simple: “You have the power to decide.”
Peer-to-peer rental has exploded in popularity in recent years, becoming the fastest-growing segment in the holiday market thanks to the increasing digitisation of the travel space. Reports from Pipper Jaffray have indicated a 27% rate of growth over the last two years, one which is predicted to continue at the same rate until 2025. Multinational hospitality conglomerates such as Hyatt, Marriott and Accor, too, are trying to hop on the bandwagon, having tried to, or already entered the holiday home rental space by offering vacation ownership services – properties where ownership is shared between multiple individuals and each owner is given an allotted period to use the property. Capitalising on increasing concerns about personal safety and property damage, Stay One Degree is perfectly positioned to establish itself in what is currently a hugely fragmented market.
For now, Stay One Degree is firmly focused on growth. “We have huge ambitions in terms of the market share that we want to have in the overall holiday rental market,” Jorge states. “Right now, we are very focused on disrupting and creating a better way for homeowners to rent their holiday homes. Once we solidify our position in that segment, there is no reason why we wouldn’t replicate the model with other depreciable assets which are primed for sharing economies such as yachts and private jets.” Forging the future with more meaningful connections in a technology-enabled world, Stay One Degree marries the best of digital with the old fashioned safety of personal networks in what they propose as a win-win for all involved. Given their recent growth, it could well be a win for them, too.