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story.lead_photo.caption A new rental tier expands Airbnb's accommodation options to include 2,000 high-end homes and villas, such as this home on Lake Wanaka in New Zealand. (Photo by Airbnb via The New York Times)

When Airbnb started in 2008, the tech startup offered cash-strapped travelers cheap overnight stays on sofas and in spare bedrooms around the world.

What a difference 11 years makes.

With the introduction of a new rental tier aptly called Airbnb Luxe, the company's accommodation options, which had already expanded to include entire houses and even some upscale ones at that, now include the high-end market.

"We have an overall strategy of having a product for every traveler, and Luxe is for the ones seeking luxury," said Brian Chesky, Airbnb's chief executive and co-founder.

The Luxe portfolio of 2,000 houses includes villas in Tuscany, ski lodges in New Zealand and castles in the French countryside. They were selected from the 5,000 properties listed on Luxury Retreats, a high-end vacation rental company that Airbnb acquired in 2017.

The customers for these houses, Chesky said, are the same guests who rented sofas with the company when they were younger, though now they have well-paying jobs and more discerning tastes and seek upscale accommodations.

Bookings for Luxe's entry-level listings, typically two-bedroom condominiums in the Caribbean, start around $600 a night during low season. The most expensive, a private atoll in French Polynesia called Nukutepipi, is about $1 million a week. The property includes 21 bedrooms, four pools and a staff of 50.

Chesky said that the average listing on Luxe is $2,000 a night. On the main site, in comparison, travelers can find listings for less than $20 a night that include an apartment in St. Petersburg, Fla., for $10 a night. For Plus, the company's tier that includes more upmarket but not necessarily luxury houses, the average listing is $150 a night.

All renters are assigned a trip designer — similar to a concierge or travel adviser — who helps them arrange every aspect of their stay, from airport transfers and restaurant reservations to local tours and experiences at the property itself.

Even with this level of detail, it will be a challenge for Airbnb to gain credibility in the luxury travel sector, said Rummy Pandit, the executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in New Jersey.

"Airbnb has a reputation of being a more affordable alternative to a hotel, and the company needs to build a track record in a new area and appeal to a new demographic of travelers," he said. "That's not easy to do in a market that's ultracompetitive."

The overwhelming demand for vacation rentals may go in Airbnb's favor. Skift Research estimates that in 2018 alternate accommodations, which include these rentals, generated $22.7 billion in revenue. This year, Skift expects this sector's revenue to grow 30% to nearly $30 billion.

While luxury may be new to Airbnb, the company has already branched out to different segments of travel. Its Experiences platform, where travelers can book tours and activities with Airbnb hosts, is offered in more than a dozen destinations globally. Recently, its Adventures platform was introduced, offering hosted adventure-focused overnight trips such as tracking lions on foot in Africa.

Travel on 07/28/2019

Print Headline: Airbnb getting upscale

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