Luxury Retreats blurring the lines

Villa Amarapura Phuket in Thailand.
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Jeri Clausing
Jeri Clausing

The threat of the long-term impact of the sharing economy on traditional hospitality and travel sellers' business models has dominated industry headlines and conversations in recent years, sparking reports, speculation and fears of a shake-up perhaps unrivaled since the rise of the internet and OTAs.

The good news for the luxury sector, however, is the expectation by many that it will remain more competitive against home-sharing services such as Airbnb because of demands by high-end travelers for impeccable, consistent standards and service, as well as recent surveys showing a return by consumers to traditional travel agents to help them sort through the seemingly endless options on the internet.

Smart players are blurring the lines with business models that play both sides of the fence.

Montreal-based Luxury Retreats, for example, describes itself as "the Airbnb for the 1%," and one that is travel-agent friendly.

"We are trying to find a way for agencies to exist in this sharing economy," said Amr Younes, the company's vice president of revenue optimization.

The 17-year-old company, which offers more than 3,300 carefully selected properties ranging in value from $2 million to $50 million, said it is filling a niche need in the travel-sharing economy by creating a guest journey that is personal and predictable, complete with concierge services able to deliver over-the-top guest requests around the globe.

The company has a rigorous inspection program, with more than 200 inspectors around the world who perform routine checks to ensure the properties remain up to par, Younes said.

"Ninety-five percent of the villas that apply to be listed on our website are declined," he said. "We pride ourselves on that. It is important for us to have that consistency in the guest experience every time they travel with us, regardless of where they go."

It also welcomes, and is working to expand partnerships with, travel agents, offering "profit sharing" or commissions on its high-dollar rentals that generally fall into the industry-standard 10% range.  

"We work with a lot of what we call travel designers that work with very affluent customers," Younes said. "The average booking from agencies today is about $20,000 for a villa stay, usually a week. And we've made this structure pretty straightforward and simple. Everything they book with us is commissionable, so they don't need to add any service fees."

Although the company was founded as a consumer-based service, he said, "Agents are an important channel for us. And we are eager to build on that."

For instance, Younes said, the company keeps track of how return guests first booked their properties, guaranteeing agents that if one of their clients comes back to them for a direct booking, they will bring the original booking agent back into the loop and pay them commission, not just once but twice.

The company is also among those helping Airbnb grow its resort and luxury inventory for those looking to book direct.

Michael Endelman, of Airbnb's resort unit, said Luxury Retreats is one of the company's key partners as it works to grow its resort and luxury markets.

"We are really focused on making sure we have really high-quality homes and really great guests in all of those markets," Endelman said. 

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