Earlier this month, Frank Porter, an Airbnb Management company, announced their representation of SOHO Residential Building, Palm Jumeirah, the first building in the UAE to be solely managed by the company.
The announcement took us by surprise. Has the Airbnb model changed from retail clients offering their residences as holiday homes to entire commercial blocks of space on short term rentals?
The SOHO property appears highly attractive for tourists as an ultra-luxurious boutique development offering beachfront living on the Palm in suites range from 950sq/ft to 2,100 sq/ft that will also be home to the soon-to-be-open Palm West Beach.
But is this a divergence from the original strategy model of Airbnb?
Frank Porter CEO Anna Skigin provided AMEinfo with an exclusive Op-Ed where she discloses that enterprising transformation in the business model of AirBnb.
“Airbnb has grown exponentially over the last 10 years – with more and more homes being converted to short-term rentals. What first began as simple renting of a spare room or mattress has grown into renting out whole floors or buildings in anticipation of higher returns. Short-term rental companies such as ours – Frank Porter – specialize in helping owners turn their property into a short-term rental, facilitating everything from furnishing and photography to listing and managing guests.
In markets where tourism is booming – such as Dubai – the returns on short-term rentals supersede those of long-term. This trend has not gone unnoticed by investors who specifically purchase apartments and quickly convert them to Holiday Homes. Many investors buy multiple units in the same building or different buildings and manage them as a portfolio.
So, has the original Airbnb model changed? In a way. Airbnb now has to cater to clients with portfolios of properties that use their platform. This means a change in their customer service and platform capabilities. The company recognizes the trend for ‘professional hosts’ and is making strides to cater to them. However, Airbnb remains the middleman in the scenario – never acting as managers themselves.
In Dubai, due to the correction in the market – developers are finding it difficult to sell their properties at desired prices. This has led many developers to themselves seek out Airbnb and venture into short-term. The properties are let out as Holiday Homes until the right buyer comes along – a win/win for all.
The short-term rental model provides flexibility to owners – regardless of their end goals. That is the very important point. Developers, in general, all hope to sell the buildings or units to the end-user and not be boggled by managing. However, if that cannot be achieved, they are very happy to rent those units out via short-term until they get the buyers they want.
Those happy to do both development and management – are building with the short-term model in sight. This means integrated self-locks, durable materials and other ‘smart’ solutions – that make it easy to turn properties into Holiday Homes. We at Frank Porter are already managing a full building in Dubai on Palm Jumeirah – and continue to look for more opportunities to take on full buildings as managers and investors. “