Maison Privee or translated from French, “private home”, is a premium holiday home accommodations service that was born, among others, to accommodate travelers’ changing lifestyles.
While that may be true, it’s not an easy business to keep afloat. It’s where usually players are tempted to onboard as many properties as possible, disillusioned into thinking that managing an impressive premium property portfolio will lead to massive income and sustainable business. It’s seldom a good idea and certainly not Maison Privee’s strategy.
“Our premium holiday home offering means we turn down more properties than we accept,” said Paul Mallee co-founder and joint managing director of Maison Privee, premium holiday homes in Dubai.
“We need to maintain the highest reputation in quality.”
In the following, and based on a telephone interview with Maison Privee co-founders and joint managing directors, Rami Shamaa and Paul Mallee, we dig deeper into the business and bring insights from these two leaders’ intent on calculated expansion, organic or otherwise.
Funding and expansion
Two years ago, this company turned a Series A funding round into a cash cow.
“The technology aspect requires extensive funding. We still did not consume our initial funds which will allow us to expand into different markets for the next 2 years. We will be back on the market for a series B funding round but not before a couple of years have passed. We are very well capitalized,” Shamaa said for his part.
Organic growth apart, Maison Privee is now looking to find new green pastures at home and abroad using in part strategic international alignment with hotel operators steeped in know-how.
Last February, Maison Privee inked a partnership deal with Southeast Asia’s largest private hotel group, Archipelago International.
The partnership sees Archipelago enter the luxury holiday rental market in Dubai and give Maison Privee access to the infrastructure and scaling expertise of Archipelago’s Southeast Asian arm.
“They had come across our products, were impressed and approached us to see about cooperating with them at a strategic level to leverage their capabilities internationally and make sure we’re able to use their best practices but also to lead and bolster our e-commerce capabilities and management capability on the technology side where they saw they can assist on,” Mallee told AMEinfo.
“Their having international presence in the Middle east and working on projects in Saudi, we thought about aligning and coordinating on the traffic and the business coming from Indonesia through Dubai.”
Shamaa added “It’s more of a win-win situation. There are more hotel groups entering into this holiday home setup, like Marriott Hotels “Homes and Villas”, where they have the culture and capabilities to do this and align with technology-managed agreements which they lack, in order to accomplish this.”
Results of this deal
Maison Privee is already benefiting from this deal, getting up to 3-7% discounts from Online Travel Agencies (OTAs) thanks to Archipelago’s networks and economies of scale.
“They opened for us access to other OTA distribution channels internationally. We’re also working on a new website, and an App for guests to use with functionalities that make their stay more convenient, simpler,” said Mallee.
“Dubai is our first city but not our last and only. We are putting all the infrastructure we need to leverage international expansion in the right way but not by overstretching ourselves of course. It’s a measured expansion.”
The holiday home sector is growing internationally where players, especially in the US and Europe, consolidate so as to lower costs, eliminate competition and add business verticals complimentary to the business.
Maison Privee is looking to do the same when opportunities avail themselves.
Shamaa said: “It’s a new segment in the hospitality industry in this region. We continue to grow organically very quickly, and if we feel the need for a ‘takeover’, we will then look for additional funding.”
“There are a number of players in Dubai and we don’t expect everyone to survive.”
Is the Coronavirus infecting business?
Extended and flexible stay are part and parcel of a new lifestyle for travelers and corporates and will continue being part of travel and a significant portion of Maison Privee for the long term, and while the Corona Virus has had an impact, it’s the future that matters for the company.
According to Shamaa, “These are still very early days and we have seen some slowdown in the number of bookings, but it’s not yet had a big impact at the moment.”
EXPO 2020 and beyond
Shamaa said that the Dubai expo this year was one of many reasons they entered into this business, which was to meet the expected demand from over 25 million visitors.
“We are working on increasing the supply we have and the demand is starting to appear already,” Shamaa said.
Mellee added: “The Expo happens over a 6-months period and during which time we will be very busy, but the growth plans we have are not related to the Expo. We see the expo as a nice kicker, but our business sustainability is clear, and we expect it to continue.”
Maison Privee has close to 220 units under management in the luxury hospitality sector, in areas like Downtown, the Marina and other premium locations.
In August of last year, Maison Privee signed a deal to manage a portfolio of luxury villas on Palm Jumeirah valued at over $100 million.
“The management model is a revenue sharing one with property owners, which brings superior returns than traditional long-term leases,” explained Shamaa.
Mellee added: “Vacation rental properties bring in 30% higher values than what the assets would normally get in a year.”
To get the right, new and repeat customers, the company structures the rental agreement and products to be owner- friendly.
It provides flexibility whereby owners are given access to their units for their family or friends to use, offering relief from stress over lease markets where wait times could be around 3-4 months before a tenant arrives.
But it doesn’t stop there.
The company provides services for the owners and tenants of the property. For owners, it manages on their behalf apartment designs, property services, furnishing, cleaning, accounting and maintenance. For tenants, it provides cleaning, and concierge services but also on demand excursions, private drivers, chefs, and other high end amenities and services.
Shamaa explains that Airbnb doesn’t do these things.
“Airbnb is a platform that matches hosts and guests and we use their property management offering, us being the hosts and operators. Airbnb is one of the distribution channels we rely on but it’s not really competition.
Cost and revenue model
A vacation rental company derives its costs from staff and cleaning costs.
“We currently have close to 25 in house employees for guest and client relations on top of some 50 others outsourced for property maintenance, and services,” said Shamaa.
The luxury rental sector has over 1,500 active listings and Maison Privee handles homes valued anywhere from $1 million to $10 million, but with prices varying depending on the number of rooms and their locations.
For fiscal 2020, Maison Privee returned revenues around $10 million.
Shamaa Concludes: “Our biggest challenge is finding the right owner/client and recruiting the right talent. This is crucial to create an excellent service for our guests.”