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Have alternative accommodations reached a saturation point at which they’re no longer considered “alternative”?
While that’s certainly up for debate, it’s also clear that this particular part of the lodging business, while still relatively young, is beginning to mature and to evolve.
Giants like Airbnb are branching out into other tangential businesses like tours and activities and, perhaps, even flights. Major companies like AccorHotels are investing in home sharing and vacation rental businesses themselves, buying onefinestay and soon, Travel Keys, a luxury vacation rental platform.
And if you speak to Parker Stanberry, CEO of Oasis (formerly known as Oasis Collections), we should expect to see much more consolidation going forward.
“There will be some consolidation,” Stanberry told Skift. “We bought a couple of smaller local players. We bought a company in Buenos Aires three years ago. We bought a company in Sao Paulo six months ago. These were strong, I’d say, local versions of Oasis. [It gives us the] ability to sort of drive value by adding those local players to our marketplace. Just leveraging our platform and our expertise and our distribution channels to apply them to that inventory that these people have meticulously built over time, that’s something I think we can go do or a bigger player could also come in and buy companies like Oasis itself and a few other people and sort of put it all together.”
Last year, AccorHotels took a 30-percent stake in Oasis, which markets itself as “home meets hotel.” Last month, Oasis raised $2.5 million from an undisclosed investor, and it now has more than 2,000 properties in 22 cities worldwide.
For now, the company is content pursuing a strategy of targeted growth, even as the marketplace is increasingly more crowded and more competitive.
“The core is more about slower growth based upon quality of experience, curation, really kind of nailing the model and nailing the experience.” Stanberry said. “I want us to be a global brand and a global leader and that requires some sense of scale. But to me, scale is, you know, 70 to 80 key destinations, or 300 to 500 properties per city. So you’re talking about a you know, 15,000- or 20,000-properties kind of platform. That’s real scale but it’s still not as big as a 3-million listings platform where you’re just never going to be able to create a uniform experience, right? So I think it’s experience first for us, experience and curation and then scale sort of logically from there.”
He added, “We’re looking at ways to drive scale in a thoughtful way by buying or combining with more local leaders where, if we can go from 100 homes in a city to 250 homes, that’s an attractive route for us.”
Skift recently spoke to Stanberry about the current state of the alternative accommodations space, why the lines between vacation rental, short-term rental, and extended stay are blurring, and what’s next for Oasis.
The following is an edited version of our conversation with Stanberry.
Skift: What’s new for Oasis right now?
Stanberry: We did a rebrand to Oasis instead of Oasis Collections. A bit of a sort of fresher, younger look I’d say. We brought in a great VP of marketing who came over from Bonobos that has just a great vision for the brand. So we did that.
And then we also released an iOS app that facilitates booking but also has all of your stay details and curated city guides. It has a perks section where it shows you a deal with Barry’s Bootcamp or Soul Cycle so you have a free class as an Oasis guest. Or something complimentary, you know, like a behind the scenes art tour at a gallery. Soon, we’re going to put a chat functionality in there as well, with the local concierges. We’re trying to move more toward mobile and it’s definitely a big push.
The other thing we’re doing is called “upgrades,” that leverages the fact that we do have teams on the ground everywhere. So after you book you can add a stocked fridge, or professional cleaning multiple times a week, or an airport transfer or pre-book something like an art tour during your stay. We’re trying to take the experience to the next level via these upgrades. Again, we’re really distinguishing that from what an individual host on a peer-to-peer platform would really be able to execute.
We launched Rome and Chicago last October. And then San Francisco earlier this year — it’s sort of still in beta mode. It’s a tough market from a real estate perspective. It’s just a very, very tight real estate market. This kind of completes a 13-city geographic push that we did over the past five quarters.
Onefinestay, I’d say, is probably our closest competitor but they’re in six cities now. Then you’ve got some domestic players that are scaling a little bit, like Sonder and a few other guys that have done, you know, some more second-tier U.S. cities. But from a global perspective, we’ve got a pretty big lead now footprint-wise.
Skift: Are you also going after the extended stay market and if so, how do you position Oasis?
Stanberry: Yeah, definitely we do. Our business is kind of a barbell in terms of the use cases and the metrics. So we’ve got this sort of leisure, B2C piece that is a seven- to 10-day average stay, which is still quite long because we’re attracting an international traveler use case more so, than a New York to Boston, right? It’s a New Yorker going to Buenos Aires or a Brazilian family going to Paris for a two-week winter break or something. So we’ve got that dynamic of seven- to 10-day stays, but then we’ve got the corporate extended stay dynamic of 40-day average stays, which is very, very long. And we do stuff up to 6 to 12, even 12 months.
So the reason we’re positioned to do that is because our inventory is more sort of full-time rental ready inventory, where we’re not working with primary residences. So I can go to a JP Morgan and say, “If you’re moving 10 people to Buenos Aires for a year we can service that,” like true extended stay.
How we’re positioning it? We have offline sales people so we’re definitely doing in-person, good old-fashioned B2B sales and then we also find that a lot of leisure travelers who use us on their own are also the types of sort of young professionals who work for the kind of companies that could use us.
Skift: Lately it seems like all these categories we have in hospitality seem to be blurring. It’s hard to know what’s extended stay, a vacation rental, a short-term rental, etc. What are your thoughts on that?
Stanberry: I think trying to keep things in separate silos is not really necessary anymore and I think hospitality companies need to think about how products can be a little bit more versatile or sort of multi-use. With Oasis, people want me to say “This is exactly what it is.” Or they ask me: “Is it you know, for hip leisure travelers? Is it corporate? Is it extended stay? Is it short stay? Is it vacation rental?”
We’re trying to create a product that is versatile, that has a variety of use cases and that serves the same customer for different needs. During the course of the year or a lifetime. I think that’s why hotel brands are thinking about both. It’s so kind of far from their core businesses, it’s hard to imagine them actually building or having that skill set in house, right? But then if you come a little closer to what a traditional hotel is, what if half of your rooms had living rooms and kitchens?
There’s this really cool property in Amsterdam called Zoku that’s won some awards and has mini studio apartments, or mini loft apartments. It feels like a hotel but they’re like mini loft apartments.
Or what if a hotel made a deal with an adjacent condo building to administer short-term rentals?
The companies that are being innovative are trying to service areas, slivers of that spectrum and not just be so constricted, I guess. Does that make sense?
Skift: For people who aren’t familiar with Oasis, how would you best describe the model that you operate on, then?
Stanberry: The easy tagline is, “The home meets hotel.” It really is right in the middle and it’s trying to take the best parts of the hotel and the best parts of a home rental and ram them together to create a third sort of category that’s in the middle. By virtue of it being in a home, it could be a long-term rental. Someone might want to rent this thing for two years. Maybe they don’t care about our concierge services or whatever but they just really love the property.
And it’s suitable for a true extended stay. It’s also suitable for a 30-day corporate stay. It’s also suitable for a leisure stay. So you’re servicing an end of the spectrum that’s almost getting into real estate. It’s almost people that are actually looking for a place to live versus a combination.
I don’t compete for one and two night stays. I think the hotel experience is just fine for a 36-hour stay. I don’t think we add that much to a 36-hour stay, quite frankly. And there is so much on the convenience. You know, the in-and-the-out and the utter convenience. But when you start to get to sort of four nights, five nights, I think, our product caters to people that are hotel people and aren’t really interested in the sharing economy, per se. But our offering sort of tips them over the edge, you know? On those four-night plus use cases.
Skift: Right. And you’re managing these properties on behalf of the owners?
Stanberry: Yes. It’s a fully intermediated marketplace where the traveler and the owner never speak to one another. The traveler deals with Oasis as a hospitality provider. The owner deals with us a property manager, basically. So that’s another way to think of it from kind of a business model perspective.
Skift: Earlier this year there was so much talk about the luxury vacation rental space, with Accor saying it wants to buy Travel Keys and then Airbnb buying Luxury Retreats. Why do you think there was so much interest in that particular part of the business? And what does this mean for your business at Oasis?
Stanberry: People are acknowledging that there is a fundamental difference between a peer-to-peer classifieds or web-driven classifieds business and a high-service hospitality business. They’re two different things, right?
Airbnb realized that and said, “We’re sort of trying, we’ve been trying to fake it ’til we make it to some extent.” If they’re really going to step into it, it’s a different expertise. It’s a different approach, it’s a different model, and I think the easier niche within that sort of broader niche to focus on is the sort of villa rental business. Because it’s been around a bit longer and there’s people that have more scale.
Luxury Retreats has been around 18 years. It’s got, it’s just got more scale than anyone that’s doing it at an urban level. It’s an easier target. Wyndham has also bought a few more traditional villa rental or high-end vacation rental businesses over the years.
I think there’s a lot of disruption in the extended stay. It’s ripe for disruption, this sort of relocated extended stay business, because traditional corporate housing is pretty drab and pretty depressing a lot of times. And there are a lot of intermediaries in the whole value chain: a company who goes through a relocation company who goes through a corporate housing company aggregator who goes to someone like me. So there’s a lot of room for this intermediation there. That’s something I’m pretty excited about, in that sort of corporate extended stay niche.
Skift: How is Accor’s investment in Oasis playing out? What kind of a relationship do you have with the company’s other alternative accommodations players like onefinestay, which is a competitor?
Stanberry: I don’t want to speak for them too much but I think the way they approach it is, kind of a multi-brand strategy. They’ve got 19 brands and so, you know, if they’re going to go into alternative accommodations, having several brands that attack slightly different niches, is kind of the way they’ve chosen to play it.
We all are quite independent, whether they own 100 percent or they own 30 percent or they own 49 percent, there’s not a sort of unified operating platform or anything. We are each operating totally separately and we talk to each other and brainstorm things. We work with Accor on some specific synergies and projects.
I think there is definitely opportunity for some collaboration and synergies as time moves along. I expect that there would be some of that. But on the other hand, you’re right: I do consider onefinestay a competitor in the cities in which we coexist. We’re in a lot of cities where they’re not. But in the cities where we are in the same place, of course we are competing for the same travelers. But if you think of Accor’s universe or if you look at a Marriott-Starwood, you know, are Mercure and Novotel that different? You’ve got Mercure and Novotels in the same city.
So that’s kind of how hotel groups are set up. It’s definitely not the way that Silicon Valley brands are set up. The whole multi-brand thing is very hospitality. It’s not very start up-y. I can’t imagine Airbnb going out there and investing in or buying people and keeping those brands. They’re going to want everything under the Airbnb platform, I would think. But I think that’s just kind of a fundamental difference in how those two industries operate.
Skift: Are you concerned about brand awareness for Oasis given how competitive this market is becoming?
Stanberry: The travel and hospitality industry is the biggest industry in the world so if you’re small, it’s very, very hard to make a name. And I think we’ve done it in certain circles, based on just great guest experience and within the corporate travel universe, becoming a little bit better known and among the early adopters who knew us based on using us in South America in our early years.
Now they’re talking about us and they’ll come back and use this in Paris. We’ve done it in the kind of slower build, kind of word-of-mouth driven way. Now I think we are at the scale in terms of the offering and in terms of the coverage where that will naturally drive more awareness. Because we’re just going to be more relevant.
We’re still small scale but we’re going to be much more relevant being in 13 countries than when we were in, you know, 18 months ago we were in five countries, you know, in one region, and now we’re in 13 in three regions. So I think that pure kind of footprint is part of our push for awareness. And then beginning to scale up other channels.
But sure, is it a concern? Yeah. It’s hard and expensive to build a brand and build awareness in this space.
Skift: Are you planning to tackle the Chinese market?
Stanberry: No, I would do more probably more like the Western expat friendly destinations like Singapore, Hong Kong, and Sydney; they would probably be the first three cities that we would do. Tokyo has the Olympics in 2020 and the events business is kind of one of our angles as well, helping companies and consumers with accommodations around major events. So I would think after we establish a base there, we’d be looking at a Tokyo, Bangkok.
Skift: Is there any reason you want to avoid China for now?
Stanberry: It’s just not a region that I have any expertise in. I think you have to be pretty smart about how you enter mainland China. And I think it’s just such a big fish to fry, that there’s so much other opportunity in Asia outside of there.
Skift: How has Oasis dealt with regulatory challenges as you try to expand?
Stanberry: It is a challenge. I think because we are on the ground, we’re nimble. We’re able to sort of navigate it a bit better cause we don’t have to be all things to all people, right? If there are particular neighborhoods where you can’t do it, we can just not do that neighborhood, you know? We’re not out there saying we got thousands of listings in every single neighborhood; we don’t need to.
So if Santa Monica is tough, then we can just avoid Santa Monica, you know? I think we’re also able to kind of have more of a collaborative partnership with the owners because we are face to face and on the ground and make sure they understand the regulations. If they’re going to violate them, at least they know it’s ultimately their choice.
On the company side, we are going to be collecting the taxes and paying the taxes; the hotel occupancy tax is necessary. In Miami, LA, and a few of our other jurisdictions, we do that. We collect that and remit that on behalf of the owners if there are minimum stay requirements, then we sort of work with those city regulations. Madrid, for example, has a five-night minimum stay.
I’d say Barcelona and New York are the two toughest regulatory environments in which we operate. Ones that I’ve looked at that are hard, thus we haven’t done them, are Berlin and Amsterdam. I really wanted to do Amsterdam. We actually took a hard look at it, put someone on the ground and it just seemed like it was going to be too hard and Berlin is rough as well.
Again we have the advantage of vetting things on the ground so we can sort of steer people in the right direction and we don’t have to be everywhere, right? So we can be a little bit more selective about where we go.
The other thing that helps us is just our long average stay. A lot of the regulations involve minimum lengths of stay. Or they tell their tenants you can only do three or four leases per year or some rule like that. And because we’ve got the sort of extended stay, relocation, digital nomad clientele, we can say, “Sure. If that’s the rule of this building, we can, we’re happy to market this for 30-day or 90-day stays.”