Greg Marsh of onefinestay offers a unique perspective on the lodging industry from one of the so-called ‘disruptors.’ The CEO—who founded the London-based company in 2010—recently touched on the origins of onefinestay, the online rental company’s growth strategy moving forward and how he sees the hospitality industry shaking out in the future.
onefinestay rents out for owners what it defines as “upmarket and distinctive” homes in major global markets such as London, New York, Paris, Los Angeles, and Rome. Marsh reflected on the beginning or as he calls it his “no lightbulb moment” when he was walking through the Mayfair district of London having recently returned from holiday in Italy.
“This thought struck me, ‘how come the lights aren’t on?’ These are beautiful parts of the city. Typically people in properties like this, multi-million dollar properties, don’t need the cash. So when they are traveling their homes sit empty. I put one and one together in my head and I became increasingly obsessed with the idea that if you can make it easy enough for owners of properties like this to have guests stay when they were away then you’d create something that didn’t otherwise exist. You’d create a new tier of inventory,” he said.
Marsh further explained that these home owners are not necessarily looking for a yield on their homes. He elaborated on the business model, which includes a staff of people that prepare the apartments for guests. “We went to market with a proposition, really more for owners in the first instance than for guests. That proposition was this, ‘we’re going to take your home when you’re not using it and we’re going to make it so easy for you to make some extra money.’ We’re going to do all the work, we’ll take all the risk and we’ll take all the inconvenience,” he said.
As an example, Marsh noted the company’s efforts can include decluttering; putting nice sheets on the bed and fluffy towels in the bathroom; as well as putting personal items away. “We’ll do dozens of hours of work so the guests will feel welcome in their stay and enjoy your space and you’ll get free money,” he said.
Marsh talked about the importance of partnerships for the company’s growth strategy, pointing out that, in addition to the OTAs, it has relationships with over 1,000 independent travel agents or advisors globally that have introduced “high spending, very quality sensitive guests. It’s a very loyal group,” he said, adding, “That’s been a good partnership for us.”
Marsh added the company has been covered well in the international press as a lifestyle brand and hopes to continue that push, particularly in the U.S. “Although we’re not well known today in North America there’s a huge opportunity to build a captivating leadership position and that’s really front and center focus for us over the next 12 months,” he said.
Of course, there has been much discussion throughout the industry about online rental giant Airbnb and the impact that it’s had. Marsh, however, pointed out some of the more obvious differences between the two companies. “People say ‘isn’t it just like Airbnb?’ I say ‘yes in the sense that a Four Seasons is like a Howard Johnson. The reality is it’s a very different kind of business; we’re a full service brand, we do all this work. We have more than 750 people in the company. We are a hospitality business, and we take that very seriously. We think that’s where we create value. It is not the same market that Airbnb is servicing, these are not backpackers these are affluent travelers,” he said, stressing the company typically accepts roughly 1 in 10 homes to rent.
Marsh also elaborated on the impact of the OTAs and brand loyalty. He told the hoteliers in the audience, “The story is massive value capture by distributors. The OTAs have basically been eating your lunch and they’re going to keep eating that lunch because the product is undifferentiated, and it’s a real problem,” he said.
He pointed out that Booking.com, for example, has revenues that exceed all of the traditional hotel chains combined and such sites are also seizing customer loyalty. “Why would I start with a hotel major when I could start with a brand that provides me with a better booking experience with more choice, more selection and price parity? Why wouldn’t I start with the aggregator? You’ve got to defend against the commoditization threat. How do you do that? It’s a scale game,” he said.
In summing up, Marsh anticipates a period of great change ahead for the industry. “Maybe some of you disagree with some of the doomsaying. When there’s a sunset there’s always a sunrise; it doesn’t necessarily have to be the end of something. I think the change is coming and we’re seeing the beginning of it. I think what will emerge 10, 15, 20 years from now will be a global hospitality industry that has a fundamentally different shape than the one that we’ve grown up with and been used to. The way people use technology devices, such as mobile phones, and the marketplace for accommodation services, it’s not going to go back in the bottle; the genie is out. What you’re beginning to feel is the tip of that sphere and it will go right through the body and the hotel will industry will not emerge in its current form. There’s never been a more exciting time to be in the industry,” he said.