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Four European short-term rental property management companies — BnbBuddy, The London Residents Club, Hintown, and RentExperience — have merged operations under a new brand, Altido.
The new London-based company has more than 1,700 distinctive properties in 21 destinations. But it aims to run 2,500 by the end of the year.
On May 10, one of the founding companies, The London Residents Club, began supplying inventory to Marriott for its Homes & Villas by Marriott International short-term rental brand, that officially debuted in late April. Marriott guests can redeem loyalty points for stays at the properties, which the property management firm supplies via a connectivity partner, BookingPal. Executives at Altido said they intend to make more of their properties available to Marriott.
Several factors drove the decision to merge, said Will Parry, a co-founder of London Residents Club and now a co-founder of Altido. The rise of venture capital-backed startups had led to a price war in fees.
The four property management firms could spend more efficiently on other technology if they pooled their resources together, Parry said.
Altido’s biggest focus has been building a tool to make it easier for real estate agents to rent residential properties on short-term leases to the company temporarily.
“When we have control over the inventory instead of managing places on behalf of owners, we can decorate in a style we know will appeal to millennials, and we can more quickly scale up inventory,” said Parry. The four founding firms are profitable, he said, but the new organization is looking for a CEO and for external venture funding to fuel its growth.
Another purpose of the Altido brand is to develop a direct booking channel to increase the opportunity to encourage repeat bookings through an upcoming loyalty program and to upsell guests on ancillary services. The company’s executives said all of their properties comply with local regulations for homesharing, a factor that makes the listings attractive for partners like Marriott and aggregators like Airbnb, Booking, and Expedia.
“It’s still a massively fragmented market and a very large global opportunity,” said Johannes Siebers, co-founder and CEO of Holidu, a Munich-based search engine for vacation rentals that partners with more than 600 property management companies. “So joining forces can make sense on the property management side if synergies and data insights can be leveraged.”
Scale brings other gains, too. “Property managers are now forced to compete with an entire ecosystem of online tools and services offering a broader array of choices to vacation rental owners than ever before,” said Brian Egan, CEO of Evolve Vacation Rentals, a Denver-based property management company. “That factor places enormous pressure on margins and owner acquisition costs. The pressure, in turn, gives at least a theoretical edge to a scaled company.”
Altido’s debut comes in response to heightened activity in the vacation rental sector in Europe. In March, Guesty — which simplifies the operations of property management companies and facilitates online marketing for short-term rentals and is a platform used by all of the Altido companies — said it raised $35 million in Series C funding.
Last month GuestReady, a vacation-rental management company headquartered in Switzerland, acquired BnbLord, following on its acquisitions Easy Rental Services, Oporto City Flats, and We Stay In Paris. After the rollup, GuestReady manages more than 2,000 properties.
“There are several good reasons for consolidation such as building a stronger brand towards property owners and guests, getting access to growth capital, or sharing resources across a larger portfolio,” explained Alexander Limpert, CEO of GuestReady.
Global brands are also entering the short-term rental fray. Earlier this month, Oyo Hotels & Homes acquired Amsterdam-based vacation rental company @Leisure Group for $415 million (€369.5 million). Last month Airbnb led a $160 million funding round for Lyric, a San Francisco-based company that manages multifamily apartment complexes and rents out those units on platforms. Moreover, last October, Expedia Group acquired two small startups — Pillow and ApartmentJet — which help owners of multifamily residential communities list and manage short-term rentals while complying with local regulations.
The success of consolidation lies in the execution. Altido’s team said that, after a year of work, they have put into place an effective roll-up of property management companies.