Two of Europe’s largest rental platforms join forces to fend off Airbnb in battle for booming global mid-term rental market
CzechRepublic-based startup Flatio, a mid-term rental platform aimed at professionals, remote workers and students, has merged with Portugal-based NomadX – an affordable digital nomad housing marketplace.
The housing platforms, worth over £10million, want to be market leaders and compete with Airbnb for the booming mid-term rental sector. The merger will see the companies combine its listings (Flatio has 9,000 across 60 cities and 17 countries and NomadX has 1,700 in Portugal alone) and expand to new territories like the UK, US and Brazil.
“We noticed a lot of interest from the UK during the pandemic. It seems that a combination of uncertainty and more remote working opportunities is creating a boom in the mid-term rental sector. We only have 150 listings in the UK at the moment but plan to ramp this up significantly in the next three to five years as we believe the demand for affordable mid-term lets will continue to grow in the UK and globally post-pandemic.”
“If we compare data three months before the pandemic hit to three months after, we’ve seen almost a 60% rise in visitors from the UK to our platform. This shows there is a real desire for 1-6 month rental properties both in the UK and overseas. NomadX already has a significant database of digital nomads, including many from the UK, so we hope the move will accelerate growth and establish us as the number one medium-term letting platform in the world.”
Despite the pandemic, Flatio has recorded a 20% growth in bookings year-on-year and has seen a 100% revenue increase in key cities. One of the reasons behind the merger is to warn Airbnb off the mid-term rental sector. The short-term holiday letting business began listing monthly stays in spring after lockdowns led to a string of cancellations. This led Airbnb to lay off 25% of its staff. Although Airbnb’s founder Brian Chesky recently claimed 20% of its bookings were over 30 days.
Flatio CEO Radim Rezek claimed Airbnb’s move to the mid-term market isn’t an issue, he said:
“Airbnb tried and failed to merge into the mid-term rental market four years ago, but their business model isn’t up to it, so we’re not worried. Our business model is much more sustainable than Airbnb’s because we build and develop relationships with individual landlords, which make up 85% of our inventory. We also safeguard our tenants by offering full contractual agreements in native languages.”
“The platform offers ludicrously-priced monthly lets to tourists and drives rental prices up in destinations, which causes damage to local economies and forces natives out. We want to change the perception of rental platforms by offering prices similar to long-term lets and on average 50% less than Airbnb.” Flatio CEO Radim Rezek explained.
Despite challenges in the rental market, Flatio and NomadX have both seen positive signs in recent months. Flatio recorded a 17% increase in website traffic globally and 20% rise in bookings year-on-year. NomadX, which launched in July 2019, saw traffic double on pre-pandemic levels, though bookings have stalled due to travel restrictions between the UK (and the US) and Portugal. However, NomadX founder Dave Williams is expecting a boom post-pandemic. He said:
“At the minute, flights are still closed from the US to Portugal, except for essential business. And UK travel restrictions were recently enforced again, meaning British citizens have to isolate for two weeks on returning from Portugal. But when markets start re-opening, especially with all the newly minted remote workers, we’re expecting to see a huge influx in bookings.”
As part of the merger, all property listings, management and transactions by both companies will be centralised on Flatio’s technology platform after a transition period, which will last several weeks. The NomadX branded housing marketplace, with over 160,000 unique users from over 140 countries this past year, will continue to exist but will be powered by Flatio and expand to all of Flatio’s markets.
This was posted in Bdaily's Members' News section by Adam White .