London company One Fine Stay arrived in New York City this summer with a business model that involves renting out the homes of New Yorkers?"hosts"?to out-of-towners?"guests." Unlike AirBnB, where the company is mostly hands-off throughout the rental process, One Fine Stay is involved in finding (and cleaning) the apartments it rents out, photographing them for listings, and vetting guests. We talked with Evan Frank, the company's co-founder and VP, about how the whole process works.
Curbed: What did Hurricane Sandy mean for business?
Frank: We had a couple places on our own books that we were able to accommodate people in, and then it was about calling around and seeing what was actually available?After the very short-term guests, we got an influx of New Yorkers who were looking for places to stay?.We called around to all of our hosts after the storm happened and asked if anyone was unexpectedly not at home. We freed up one of our homes on Bedford Street.
We do have a few places that are still available. You need to have the flexibility to move around a little bit. Finding places that are available for the next two to three months is quite difficult. So I guess my advice would be to be as flexible as possible in terms of being able to move around a bit. Having the flexibility to go to Brooklyn?shock and horror!?probably about 25 percent of our homes and apartments are in Brooklyn.
How do you find apartments? How do tenants find you?
The first double-digit homes came from referrals from [London One Fine Stay hosts]. We don't take out ads in magazines. We're much more focused on relevant partners. We also have partnerships with a variety of large and small travel agents.
How do you decide which apartments to accept?
I think a lot of it has to do with something that feels a little bit distinctive and special. It doesn't have to be super high-end. A lot of our homes are modest kind of one-bedroom affairs but that are decorated really distinctively. They either have something interesting about the architecture or the design so that they will photograph well. You need to be in good operating order?a nice hot shower with good pressure, the appliances need to be in good working order. We're always there meeting our hosts?If hosts only view us as a mechanism to feed them cash, it's really the wrong dynamic.
Is there a process for vetting the guests?
The first way we vet them is very simple Internet searching. We want to make sure we can verify their identities when they're [registering]. Are they professional? We just want to make sure we can identify their digital footprint?.We meet them in person, we photograph their passports, we make sure their photographs match their passports match their credit cards.
How do you keep people's belongings safe when you're renting out an apartment?
We seal off cupboards, cabinets, and closets with the personal effects in them. We've never taken anything off-site?if you have some expensive china, we always recommend that we designate an area in the kitchen for that and we seal that off.
How does it work with the staging and photography of the apartments?
When a host decides to join, we go in and we professionally photograph their home and register their home?.The purpose of the registration is to develop the plan for what we do every time you leave and the guest comes. It's not just about professional cleaning, it's also about?sealing off cabinets, where do we store your sheets, towels, and toiletries?we call it a provisioning. How do we operate the home in your absence? How do you dispose of garbage? Once the home has been added, and a booking happens, we go in, we clean the home, we prepare the home?We can do a fridge fill if someone has some specific food requirements that they like, for example.
What are the price ranges? How much does the apartment owner make on the deal?
They start at probably $250 plus tax per night, and that's for a kind of basic one-bedroom or studio. That would go all the way up to?probably $1,500/night plus tax. And that's about to be bested again, because we just took on a very striking modern townhouse. The average is about $500/night plus tax.
It's hard to say [how much owners make] because it varies dramatically. We mark up the homes to a point where we're able to provide the service that we provide. We're new to town, so we're much more inclined to be generous with getting guests in the homes.
Averages mask extremes on either end. For a large expensive house, our markup would be modest?we want to make sure that we have guests in. A smaller apartment means less money to spread out our operating costs on.
We actually are structured as a club. What that means is that hosts?can also, or in lieu of income, earn benefits. We'll clean your home for a year, if you earn enough credits.
What about sublets and the legal issues?
New York is probably the most complicated land use and building environment in the world. There is regulation in place. It doesn't affect all types of homes or all types of stays?.We've chosen a segment of the market that we feel is fully protected and okay. Effectively we've taken the view that we want to be whiter than white in NYC with the local authorities, so we collect and remit occupancy taxes (technically on behalf of our hosts) and sales taxes just as a hotel would. Technically Airbnb should probably be doing this as well but they are relying on the hosts themselves to pay occupancy taxes, which of course they probably never do.
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