Airbnb is launching branded purpose-built apartments in a tie-up with US real estate developer Newgard Development Group.
The partnership marks the first time for the San Francisco-based home-sharing group has worked with a property developer, and underscores how Airbnb is expanding beyond simply booking accommodation. It also pits it against traditional hotel operators that also work with developers providing serviced apartments, such as Marriott International.
The 300-unit rental complex in Kissimmee, Florida, near Orlando, will be built and owned by Newgard but carry a new brand “Niido powered by Airbnb”.
Jaja Jackson, head of multi-family housing projects at Airbnb, suggested that other similar developments were being planned. “This is something that philosophically matches with our long-term strategy,” he said.
The project comes at a time when real estate groups across the US are changing their approach to developments to adapt to the rise of the “sharing economy”. For example, building complexes with fewer parking spaces and instead offering residents discounts on Uber rides.
Harvey Hernandez, chief executive of Miami-based Newgard, said the company planned to build 2,000 Airbnb-branded units in the next two years. Tenants who rent the apartments can choose to sublet them through Airbnb for up to 180 days a year.
“This is only the beginning . . . we want to take home-sharing to everywhere in the US that we can,” said Mr Hernandez. He said Newgard was working with Airbnb “to select the right neighbourhoods and the right designs” for another five apartment complexes.
The Kissimmee apartment building, due to open early next year, includes features such as keyless doors and secure storage that will make it easier for long-term tenants to rent out their rooms when they are away. Through an app, tenant hosts can manage their Airbnb guests’ stay and even co-ordinate services such as changing bedsheets.
It will have human touches as well. A “master host” will be on site, and all apartments will have a mandatory cleaning service, in the style of a serviced apartment. Tenants will be able to rent out their apartments on Airbnb for up to 180 days a year.
“The demographic that we are targeting are travelling more than ever before,” said Mr Hernandez. “So when that property is empty, they can be making money with it.”
Newgard, Airbnb and the tenant will all derive revenue from the short-term rentals, with Newgard taking 25 per cent of the nightly room rate, Airbnb taking 3 per cent (the same commission it charges hosts anywhere), and the tenant receiving the remainder.
Marriott operates serviced apartments whereby it does not own the property but the building carries its branding and Marriott provides hospitality services. Unlike Marriott, Airbnb will not operate the hospitality services and nor is it charging Newgard for the use of its brand.
Airbnb’s relationship with owners of apartment complexes has been a difficult one at times. To address the frequent tensions between building owners, residents and Airbnb hosts, the company launched a revenue-sharing scheme two years ago, which allows apartment buildings to collect part of the revenue from Airbnb rentals.