AvantStay raises $ 160 million due to short-term rental boom

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As the world emerged from the pandemic earlier this year, the wealthy did not curb bookings to BeforeStay Upscale homes from Inc. for family retreats or to celebrate with friends.

While traditional hotel chains have been decimated by a steep drop in overnight stays, the West Hollywood-based travel industry is experiencing a boom in many of its remote short-term rental locations, located within short driving distances. large metropolitan areas or in hidden areas. Shangri-Las.


For example, it offers luxury living anywhere in California’s Paso Robles wine country, where a seven-bedroom house with four bathrooms and an Olympic-size pool rents from $ 2,765 a night to $ 659 a night. for a two bedroom bungalow with ocean view. on the island of Oahu in Hawaii.

They are not cabins either.

Homes have everything from hot tubs and pools to fire pits and keyless entry for security. The average daily rate travelers are willing to pay to stay at one of these mansions is $ 880, with groups of seven as the average number of guests, which works out to $ 120 per person.

It’s comparable to staying in a four or five star hotel at a fraction of the price, said Sean Breuner, CEO and co-founder of the company. “It’s a much cheaper and affordable experience.”

The appetite of investors in the niche is intense.

Swimply, a New York-based online marketplace for private pool rentals as a form of stay, raised $ 40 million in funding this week.

Sean Breuner, CEO of AvantStay

Some short-term rental companies have also gone public in recent months, including Sonder Corp., which operates a boutique hotel-apartment hotel company based in San Francisco, and Vicasa, an international rental management services company. Portland, Oregon-based vacation that went public on Dec. 7.

There is a good chance AvantStay will follow the same path.

“Absolutely. I think going public is an option for us,” Breuner said in an interview.

This week, AvantStay raised $ 160 million in a round of Series B funding to help the platform decorate – called “gear” in industry parlance – its lavish homes and list the properties owned by others to rent for vacation or short term. stays. It’s teamed up with 800-pound gorilla from space, AirBnb Inc., as the short-term rental giant tries to branch out into other lines of business.

Tarsadia Investments and 3L Capital co-led the last cycle, also with the participation of previous backers Plus Capital, Bullpen Capital and Convivialite.

AvantStay rentals include a Who’s Who list of hotspot destinations for globetrotters: Park City Ski Resort, Utah; the luxury ski towns of Breckenridge and Vail in the Colorado Rocky Mountains; the hotspot of musical nights Austin, Texas; and the coastal California beach towns for the rich and famous at Malibu and Newport Beach.

The company employs around 400 people, but plans to double or triple the size of the workforce over the next 18 months and double the number of cities in which its homes are located from 100 to 200, according to Breuner. .

“It’s a step in the direction where people want these large private spaces versus crowded hotels, and where they are looking for a seamless travel experience,” Breuner said.

Jamie Lane, vice president of research at AirDNA, a Denver-based short-term rental data and analytics company, observed that travelers want to escape the crowds and not worry about catching the virus. COVID-19 or wearing masks, he said.

“Most of these resorts continue to generate peak season income, which is better than ever. We see them expanding their seasonality so that they get income over a much wider period of time, which makes these types of homes and rentals much more profitable, ”Lane said.

“What we have seen is that the demand for short term rentals has done better than anyone could have imagined,” he said.

“Overall, traditional hotels are still talking about going back to 2019 levels,” added Lane, who noted that short-term rentals last month were 15% above levels two years ago.

Average daily rates for short-term rentals are around $ 248 a night, about 30.1% higher than the November 2019 average, he said.

“AvantStay’s markets are doing well. They were lucky because they weren’t tackling urban markets, ”Lane said, noting the company is one of the few with a national footprint.

He cited some in three short-term rental spaces that weren’t so lucky.

Lyric, a San Francisco-based short-term rental startup that raised $ 180 million from Airbnb and other investors, closed in July 2020.

Washington-based Stay Alfred closed in May 2020 and New York-based Domio, an apartment-hotel rental service for group travelers, closed in November 2020.

Correction: An earlier version of this post misspelled CEO Sean Breuner’s name.

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