CEO Interview: Alon Eldar, Only Apartments

Piers Brown By Piers Brown
Uploaded 11 November 2014

When, how and why did Only Apartments, the short term rental website launch?

Myself and Elisabet, my business partner launched the business in Barcelona in 2002. We're both architects and had an apartment that we were looking to rent out and started advertising on Craigs List with a very basic supporting website. Some of our friends had apartments and they asked us to market the properties for them too - we had no business plan, but short term rental was clearly a growing market. Like our clients we were owners, becoming property managers and developing check-in and check out procedures and it grew from there. It kept growing and we realised there was a need for an intermediary to connect owner with renter. We now have 50-60 staff comprising 24 nationalities. 

Although we don't encourage engagement between either party (unlike Airbnb, HomeAway and Home Stay and other similar property sharing websites which emphasize community with owner and guest profiles and reviews).

"I don't think owners really want relationships with their guests," says Alon "this is a business. Owners want bookings and guests want safe stays."

The booking platform is instant confirmation, then receiving the information for getting the keys to property and everything about the apartment including floorplans in some instances.

What's the revenue model for Only Apartments, how does the company make money?

The company has been profitable from day one, we charge guests a commission of between 10 and 20% when they book, and everything is free for owners, including listings and bookings. In contrast, Airbnb charges hosts a 3% service fee and guests a  6-12% fee per booking, and HomeAway charges owners a 10% booking commission.

We offer over 30,000 short-term rentals, with around 70% in Europe. Our target is 300,000 within the next two years by increasing inventory through the use of channel managers  which enable owners and property managers to sign on and to distribute their properties to sites such as Only Apartments, HomeAway, Wiimdu, Hotelbeds and many other outlets.

The company claims to be "the first European sharing-economy business in the tourism industry to go public, could you tell me more about this?

Only Apartments listed on the small-cap Alternative Spanish Stock Exchange Mercado Alternativo Bursátil (MAB) on July 28 and raised $5 million. There was no IPO-like public offering, but shares of Only-Apartments trade on the exchange, which is geared for small-cap companies looking for growth and the opportunity to raise modest sums, and increase our investor profile. The stock closed at euro 2.07 per share ($2.65) on November 10, a 9.52% jump from the stock's opening price on July 28.

Only Apartments has recently opened a Miami office, what's the background behind this?

Miami is the biggest gateway to Latin America and the presence will help us push into North America and Latin America. There's plenty of destinations and availability close by for us to grow our presence we currently list only 400 or so properties in USA for instance.

Rival Airbnb has raised $776 million in funding and recently been quoted as having a market capitalization of $10 billion USD, do you think this is justified?

No, I think Airbnb's value is overstated, they are spoending lots of money on marketing and still have not reached break even - let's see what happens if there's a stock market offer.

Will Only Apartments need more funds to support expansion as the sector becomes more competitive?

We could raise funds from the venture capital markets or banks. Maintaining control of the company equals exit. Stock market continuity drives goals, which tends to lead to more money being offered.

What are the challenges for the short term rental sector?

The hotel accommodation sector is well-established and strong - our sector, in comparison is heavily fragmented and doesn't generally deal with the velocity of accommodation requests well. There are new companies launching like Rentals United taking an aggregators approach which is interesting. Only Apartments ultimate goal is to make owners and guests life easy. We welcome enquiries from serviced apartment companies looking to grow their distribution platform worldwide.

Editorial Comment:

Despite bold expansion plans and a differentiating quality, Only Apartments remains a minnow in short term rental bookings. We see key inventory countries becoming ultra-competitive, particularly against the marketing clout of giant competitors. Growing brand awareness and distribution will be the defining success factors for Only Apartments. Maybe Only Apartments will prosper steering its own path or be attractive to a bigger, more robust behemoth within the sector in the future?

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