Inside the world's most expensive AirBnB mansions
When thinking of Airbnb, you typically imagine a host with a spare room dreaming of monetizing their extra space. And the vast majority of Airbnb owners do fit that description. In recent months, however, the travel industry giant has given more attention to luxury homes, expanding its platform with premium offerings and travel services.
Looking to better cater to high net-worth individuals, Airbnb went as far as acquiring a luxury homes concierge service for a reported $300 million in cash and stock. As a result, various estates, mansions, castles and even private islands came online for its users to book for up $45,000 per day.
At this price point, users can have their pick amongst their favorite private islands. Over Yonder Cay, a drop of paradise located in the Exhumas (Bahamas), can be booked on Airbnb's luxury retreats from $44,000/day complete with its 15-bedroom house, 9-hole golf course, sandy beaches, pools, private chef, housekeepers and even massage therapists. The property even has crewed boats for its guests to use.
Users preferring a longer getaway could also opt to rent Coco Prive, a private island in the Maldives with 6 bedrooms surrounded by sandy beaches from $45,000/day. Fully serviced and staffed, there are over a dozen private islands available for rent on Airbnb in various parts of the world, some of them offered at even more attractive prices than more traditional homes and mansions.
Such remote getaways, however, remain an extremely marginal business for Airbnb. With ever increasing property and estate taxes, even the wealthy are however looking to monetize their properties to a discerning crowd. This has led to a number of mansions appearing on the platform throughout the US and Western Europe.
The Chateau Petit Versailles, sitting next to Vienna in Austria dates back to the 16th century and offers 4,500 square meters of fully renovated interior space for €25,000 per day. In addition to 14 bedrooms, the castle features a spa, a cinema, conference room, five halls to host parties like a royal and even a dedicated cigar room.
France became the leading country in terms of luxury retreats for Airbnb. With available properties distributed mainly across the Côte d'Azur or the French Alps, these properties do share in common interior spaces far superior to those found in five-star hotels at the same price point. Fully serviced, these have grown into true rivals for local hotels that now aim to distinguish themselves through services.
One of these properties that are starting to draw clients away from hotels is the Chalet Edelweiss, an 8-bedroom house in Courchevel 1850, the hotspot of the ultra-rich during the winter. Coming complete with a spa, pool, Jacuzzi, sauna and ski room, the property is available for over €51,000 per day during the week preceding New Year's Eve.
Understanding that such high prices come with high expectations, hosts, often corporations involved in the management of multiple properties, have introduced a professional staff to these chalets and villas including chefs, housekeepers, drivers, and managers to oversee all of these logistics.
Despite having gained a significant amount of traction in Europe and particularly southern regions, Airbnb's high-end offering is still predominantly located in Northern America from where both Luxury Retreats and its parent company originated.
One example of such property is the Chateau de Laurel in Beverly Hills, California listed on the platform for $15,000 per night. Its features include a large pool with a waterfall, a full-size tennis court, extensive outdoor space and plenty of formal dining spaces. Boasting a French architectural style, similar to that of castles found in Europe, the mansion is only one of a few that Airbnb is offering as a luxury retreat in the United States.
Some celebrities have been quick to join this luxury Airbnb trend. Following her Super Bowl performance, billionaire couple, Beyonce and Jay Z stayed in a contemporary Los Altos Hills estate that they rented out through Airbnb. A 12-acre property with five bedroom suites, seven bathrooms, a rooftop garden and an infinity pool, the estate was on the platform for $10,000 per night.
The boost in PR that the property received as a result was so significant that Justin Bieber rented the same house on Airbnb a few days later. Britney Spears, Gwyneth Paltrow and the Kardashians all joined the ranks of Airbnb Luxury Retreas users within the same time period as well.
Surprisingly, a Château de Brou, fit for a king, with 13 rooms (10 bedrooms and 15 beds) situated in a 100-hectare park planted with trees will cost you less than a suite at the Paris Four Seasons – only $2,641 per night. Apparently, this is just too far from the center of Paris (yes, about 280 kilometers).
In fact, a large number of chateaux scattered throughout France are available on the platform at relatively low rates. In the past years, the French government has heftily increased taxes on secondary homes, which has led to many families renting out these barely used castles to cover these expenses that can sometimes amount to over a million euros per year.
Romantic getaways, family vacations, and business trips are however no longer the only purpose for which these mansions or private islands are being rented out by Airbnb's users. Corporations have now started using some locations for company retreats or even, in some cases, to hold conferences.
For example, a former printing company, the Louvre Factory, which is today an industrial style loft designed for events, ideally located near the Louvre and the Stock Exchange, would cost €4,000 per day for corporate events.
Airbnb's strength since it's launch has been that not only is it a platform designed for people who are willing to spend money, it can also generate fortunes for landlords that are monetizing their assets through it. Indeed, in the past few years, some hosts have even invested heavy resources into building Airbnb businesses, yielding them more than enough profits to rent out the most expensive luxury retreats seen here above.
The most inspiring example is a London-based man who made $15.6 million in one year by renting out his 881 properties in London, according to data from Airbnb analysis site AirDNA.
London, with the third highest number of Airbnb listings in the world behind Paris and New York, has currently 49,348 Airbnb listings available. In other words, it implies that Airbnb's highest earner owns 1.8 percent of the city’s Airbnb market. According to AirDNA, 24% of London's hosts hedge their results by listing multiple properties at a time on the platform.
Another meaningful example is a man who made $15.4 million through his 504 properties in Bali, which makes him the world's second most successful. Last year, a report from Forbes said that 75 people in the U.S. made more than a million dollars from their Airbnb listings, ie about one out of every 3,850 people that list a home on Airbnb.
Landlords in Cape Town, Paris and Barcelona also featured among the most lucrative places for Airbnb property owners. In particular, a Cape Town Airbnb landlord is reportedly listed as the third wealthiest earner, with a staggering amount of 114 properties. The landlord is reported to have earned R109 million ($7.5 million) from October 2016 to September 2017.
AirDNA chief executive Scott Shatford told the Telegraph: “Airbnb is no longer a community just for individuals renting out their space or properties on their own.”
We’re seeing traditional property management companies operating as many as 1,000 listings,” says Scott Shatford. “These numbers don’t show a multimillionaire sitting on a gold mine. These are businesses that have emerged in this new economy, with hundreds of employees, managing other people’s second homes.
Scott Shatford, CEO, AirDNA
But still, this trend doesn’t dominate the Airbnb market, the split between individual and management companies is now around 65 percent to 35 percent, with the typical host earning £3,000 a month and hosting for 36 nights per year.
For those who choose Airbnb as a way to meet locals, the new trend is to avoid. Travelers who want a one-on-one connection with their host will never get what they want from a person who joined the service for business only. Otherwise, the stay could quickly start to resemble something like a hotel.
While the idea to acquire as many properties as possible to lend them on Airbnb undermines the initial idea of the service, Airbnb promised to solve another big problem. Being originally a short-term rental website, it is accused of driving up property prices and contributing to a housing shortage
In December 2016 Airbnb limited the number of days users could rent out their properties per year in London and Amsterdam, barring homeowners across the cities from renting their places to visitors for more than 90 and 60 days a year, respectively. Property owners in San Francisco have been limited to 60 days per year as well.
Now it’s Paris’ turn to get capped the number of days its hosts can rent their property. Since December, the app will only allow hosts to rent for 120 days per year. This will bring users in line with France's official laws on short-term rentals, according to Reuters. A "nights hosted" counter will be added to users' profiles to help track the number of nights they've already rented out their homes.
The rental cap will only apply to Paris' first four districts unless the host has the authorization to rent a property for longer. This means it could be harder to find an Airbnb next door to popular tourist spots such as the Louvre, Notre-Dame Cathedral, and the Marais. (The Eiffel Tower, in the seventh arrondissement, is safe for now.)
But Airbnb was quickly criticised for not imposing the new restriction -- which will begin in January -- across the entire city.
The measure will be applied in four central Parisian districts "which have faced the pressure of tourism and trade, as well as a particularly strong housing shortage over several decades," Airbnb said in a statement.
"It's unbelievable," Paris city hall official Ian Brossat told AFP.
"This means that Airbnb will not enforce the law" in the city's 16 other districts or arrondissements, "making an announcement that violates the law as a gesture of good will," calling for it to apply the rental limit in the whole of Paris.
Valued at $31 billion following a $1 billion fundraising round earlier this year in March, Airbnb has managed to become profitable as of the second quarter of 2016. With its 3 co-founders now valued at $3,8 billion each by Forbes, the company continues to operate in private markets without an IPO.
Its Luxury Retreats acquisition, which allowed Airbnb's overall portfolio of properties to gain the private islands and mansions we've seen, came at a time when other parties were looking at expanding into the market. Its main competitors were Accor, Europe's largest hotel operator, and Expedia, both of whom were eying the luxury property market as a possible expansion.
Interpreted by some as a defensive play, Airbnb's acquisition of Luxury Retreats for $300 million in cash and stock, also became the company's largest-ever M&A deal. According to insiders, the company however still has plans to develop through acquisitions into other niches other than luxury.
In an overall strategy change that now includes offering its users trips with particular experiences, offered or booked through the host, Airbnb is looking at expanding to services, such as restaurant reservations in the very near future on a global scale. In the luxury market, for example, it's inspecting every single property listed through Luxury Retreats in-person.
Every single home has a 24/7 concierge. And they have any service you can imagine. Somebody wanted a pop-up synagogue on the beach. Who knew you could do that? So most of Airbnb, by 2021 or so, will probably be new things that we’re shipping at of 2017 on – including new stuff within accommodations.
Brian Chesky, CEO, Airbnb told Fortune
At a time when high net-worth individuals are looking to best optimize their resources and in a world where Airbnb has seemingly mastered the art of getting its users to rent property only, Chesky prediction could very well come true in the near future.
Photos via Luxury Retreats