Barcelona-based Only Apartments is making what appears to be a modest push into North America and Latin America, having opened a Miami office recently with the hope of soon staffing it with 10 people.
But, while much larger competitors such as Airbnb and HomeAway emphasize community with owner and guest profiles and reviews, Only Apartments shuns the idea.
“I don’t think owners really want relationships with their guests,” says Alon Eldar, the short-term rental site’s co-founder and CEO. “This is a business. Owners want bookings and guests want safe stays.”
Only Apartments offers instant bookings and confirmations, Eldar says, and in some cases publishes the apartment’s floor plans, as well as other details about the unit and surrounding neighborhoods. There is next to nothing about the apartment owner or management company.
“Our platform is instant booking and then you receive the information for getting the keys and everything,” says Lucia Casado, a spokesperson. “What makes people trust you is how you show the apartment’s information, showing everything clearly. It is not about displaying a face of someone you will see for three minutes giving you the keys.”
“What is more important is the customer service and the information about each apartment so you know you won’t have surprises,” Casado says.
Stock Market Entry
Not that Only Apartments shuns community entirely. The company, which listed on the small-cap Mercado Alternativo Bursátil exchange in Spain on July 28 and raised $5 million, detailed in its latest earnings report the country-by-country breakdown of its Facebook fans (187,094) and Twitter followers (2,459).
The MAB exchange is sort of a minor leagues for public companies, offering small-cap firms the opportunity to raise modest sums, and to increase the prominence of their profiles. Its stock closed at euro 2.07 per share ($2.65) on October 15, a 9.52% jump from the stock’s opening price on July 28.
Only Apartments does some other things differently beyond its stance on community and owner and guest profiles. It charges guests a commission when they book, but for owners everything is free, including listings and bookings. In contrast, HomeAway charges owners a 10% commission on bookings, and Airbnb charges owners a 3% service fee and guests a 6-12% fee per booking.
Alon Eldar and his wife Elisabet Cristià, both architects, co-founded Only Apartments about a decade ago. Alon Eldar says the company didn’t face inordinate competition in its markets until about four or five years ago when big players such as Airbnb and HomeAway stepped in.
“Companies like Airbnb right now have not reached break-even,” Eldar says. “They are throwing an enormous amount of money into marketing” with any hope for profits taking a back seat to driving traffic to its sites.
“It’s OK,” Eldar says, adding he welcomes new competitors. “Only Apartments has a solid model. We have been profitable from the beginning.”
It’s all relative, though. Due to rising personnel and operating costs, including the introduction of a new platform to bring property management companies on board, Only Apartments’ EBITDA fell nearly 72% through the June 30, 2014 quarter,.
Ambitious Expansion Plans Through Channel Managers
Only Apartments, which offers some 30,000 active apartment listings, 70% of which are in Europe, hopes to bring that number up to 300,000 within two years. It only currently lists around 400 properties in the U.S.
The company plans to increase its inventory through the use of channel managers such as Kigo and Rentals United, which enable owners and property managers to sign on and to distribute their properties to sites such as Only Apartments, HomeAway, Wiimdu, Hotelbeds and many other outlets.
“Channel managers are becoming very important, especially for those that want to offer online booking functionality,” says Gareth Thomas, co-founder of Edinburgh-based Reserve Apartments, a short-term rental site with no ties to Only Apartments.
“Managing availability via a channel manager is usually pretty straight forward,” Thomas says. “However, doing the same for prices is often either very difficult or not worth doing. What you end up is often not flexible enough to provide competitive pricing.”
Using a channel manager, which handles distribution to a variety of outlets, including global distribution systems and travel agencies, has advantages and disadvantages.
Reserve Apartments, which focuses on short-term rentals and corporate apartment services in Edinburgh and Glasgow, has decided not to use a channel manager for now, Thomas says.
“One would need to think clearly and carefully about what the unique selling proposition would be if it became a case of simply pulling in the same properties and prices as everyone else,” Thomas says.
Channel managers, though, clearly provide a shortcut for building up a company’s inventory when entering massive new markets, as Only Apartments is doing in North American and Latin America.
Eldar realizes that Only Apartments won’t get far in the U.S. until it adapts its website for the local market, a process he says will be complete in the next few weeks.
The U.S. website currently uses the European date format (today is 16/10/2014), has lots of reviews in foreign languages, and has references in some listings to things such as “football” fans not being eligible guests, a proposition that would eliminate possible business from lots of New York Giants and San Francisco 49ers fans, which is not the intent.
In Latin America, Eldar currently offers its services in Argentina and sees potential in markets such as Cuba and Colombia, which was once considered unsafe, but is coming into its own.
Despite its differentiation, it could be tough going for Only Apartments in some of its new markets as it will still have to face off against the marketing clout of its giant competitors if it is to have any hope of getting noticed.