Growing numbers of remote workers and soaring travel and accommodation costs represent favorable conditions for house exchange platforms to thrive in, but are people ready to trust strangers during a time when confidence is low?
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Home swapping platforms see an opportunity to cash in on the fast-growing flexible work trend and and the appetite for more “authentic” experiences.
And the fact they offer free, or at least more affordable, stays during a post-pandemic travel boom that’s seeing flights, hotels and vacation rental costs soar is another favorable condition. But the challenge for the house exchange sector, once associated with classified ads and listings websites, will be to win guests’ trust.
A handful of well-known investors see the potential in one new network, with venture capital firm Andreessen Horowitz leading a $7.75 million funding round for a platform called Kindred in April this year.
Co-founders Justine Palefsky and Tasneem Amina previously worked at property technology company Opendoor, and in the round tapped former colleagues, Eric Wu, co-founder and CEO, and Rohan Seth — who co-founded audio platform ClubHouse. Elad Gil, who previously invested in Airbnb, also took part.
The concept with these platforms is you pay an annual subscription, and need to have an approved home yourself. You agree to swap with another home, and any cleaning fees. Kindred, for example, charges $300 a year, and a service fee can be around $30 per night service. However some platforms, such as Intervac, accept homes that are also rented out.
Palefsky believes the bigger vacation rental companies have become “over-commercialized” today.
“Airbnb and VRBO have increasingly professionalized their supply. By and large, their inventory is coming from full-time investment homes,” she said. “People aren’t comfortable joining Airbnb or a similar company with their primary residence as it’s become more professionalized. That’s where it started, but (now) it’s not where the host lives day-to-day.”
She added that her financial backers’ interest was piqued because, according to her research, there are about 800,000 Airbnbs in the U.S., but 150 million primary residences. “It’s a really, really big market,” Palefsky said. “People spend a lot on travel. But what appealed to Andreesen is seeing how many primary residences there are in the world that aren’t on any vacation rental platform.”
Palefsky launched the company in April last year after struggling to find properties to work from remotely herself.
“Vacation rentals are not cheap, especially if it’s longer than just a few nights,” she said. “I explored becoming a full-time digital nomad to avoid paying double rent, but it wasn’t a convenient long-term option.”
Kindred aims to differentiate itself from the crowd, which also includes Homelink, by honing in on themes (similar to Airbnb’s latest redesign.) Rather than searching by dates, Kindred has taken the curated route.
“Instead of sending 60 emails to different homes, you only contact the right home that fits the date and style you’re looking for,” Palefsky said.”We’re taking it from listings to managed marketplace.”
One established player, HomeExchange, launched a similar feature called Collection earlier this month. After a soft launch in late 2021, a new collection features 300 homes (out of its 450,000 total) that are certified based on aspects including technology available, wellness or family-friendly features, and even notable artworks.
HomeExchange, which charges $1,000 on an annual subscription, also now lets members lend their homes without reciprocity, as guests can offer GuestPoints to be used at a later date.
There’s certainly innovation in the market, but Kindred now needs to scale up. It currently has 500 homes, but a waiting list of 6,000 applications. “We’re growing, but trying to do so in a thoughtful way,” Palefsk said.
Every well moderated webinar or online conference leaves a little time for a Q&A session, but speakers found themselves caught out during a recent event that aimed to tackle the complexities of digital nomad visas.
The usual questions were fielded during the Let’s Talk Visas — The Modern Way of Nomadic Freedom webinar, hosted by Boundless Life and Relocate.
Lawyers and accountants from Greece, Italy and Portugal shared the ins and outs of dealing with application processes to help remote workers seamlessly transform into digital nomads. They discussed golden visas, entrepreneur applications, short and long-term residency permits, family reunification, blue cards and citizenship processes.
But one audience member threw this curveball: can a child be born a digital nomad to digital nomad parents? First up, Italian chartered accountant Nicolo Bolla: “Whenever’s a baby born, we have a big discussion about new soil. If a baby’s born in Italy, they’re not a citizen.”
Greece’s Eleftheria Charalambous said parents can apply for a visa for them, while in Portugal, if the parents have been legal residents for more than a year, they can automatically request Portuguese citizienship for the child, or file for a family residency card, according to Sara Sousa Rebolo.
Then followed quetions about child care and nannies. Italy offers a dedicated au pair visa. Sousa Rebolo said she wished Portugal offered the same.
A more serious question surrounded what happens if a digital nomad overstays their welcome. Just don’t, seems to be the answer.
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