Montreal-based Luxury Retreats, a sort of high-end Airbnb, allows customers to book vacations at the rental properties of the company’s well-heeled roster of home owners, the highest profile of which are Francis Ford Coppola’s palazzo in Puglia, Italy, and Richard Branson’s Necker Island villa.
Listening to Catherine Laporte, Luxury Retreats’ Director of Marketing, speaking recently at a MTL+Ecommerce meet-up hosted by Shopify at its Montreal headquarters, the theme that emerges is that of “experience”, which puts the company in line with other digital retail success stories like fellow Montrealers Frank & Oak, whose CEO Ethan Song always stresses the importance of creating an “experience” for the consumer, rather than merely selling them things.
Media commentators became confused a couple years ago when Frank & Oak began opening brick-and-mortar stores, with several asking questions like “Is Frank & Oak even a tech company anymore?”
But that seems to be the recipe now, for companies specializing in digital commerce, to acknowledge the fact that technology exists to help make people’s actual, physical lives better than they are, rather than the other way around.
For Luxury Retreats, building their brand means leveraging data to create a cohesive identity, which is neither the free-wheeling ethos of Airbnb, or the fully managed non-adventure you get in hotels and resorts.
“You get all the services of a resort, but in a private villa,” says Laporte. “We’re somewhere in a hybrid between the hotel and the sharing economy. A lot of people say that we’re the Airbnb for the 1%. But if you talk to anyone who works at Luxury Retreats, it’s very hard to pinpoint what we do or who we are.”
With a portfolio of 3,200 villas, Luxury Retreats differentiates itself from Airbnb by offering a 24/7 concierge service.
“Where the sharing economy is all about living like the locals, living in the city, and not knowing what’s going to happen, and the hotel experience is almost too rigid, you know what a hotel room is, it’s like a cube, we’re somewhere in the middle,” says Laporte. “That’s where our positioning is.”
“We’re somewhere in a hybrid between the hotel and the sharing economy. A lot of people say that we’re the Airbnb for the 1%.” – Luxury Retreats Director of Marketing Catherine Laporte
The vast majority of their clientele is American, at 95%, with most other traffic coming from the U.K. and Australia, contrary to the idea that the high-end travel market caters mainly to Middle Eastern, Chinese or Russian clients.
What’s interesting about Luxury Retreats from that perspective is that it has a lot of market to expand into.
The main drawback of their model, however, is that even if they do gain traction with a new linguistic group, in China or the Middle East, for example, they must also put together a team of on-the-ground concierges in those locales.
“It’s something that we need to develop further, if we want to move into new markets,” acknowledges Laporte in response to an audience question.
Another surprising fact about Luxury Retreats is that their demographic sweet spot tends to be in the $75,000 to $250,000 income range, which says something about the aspirational nature of the luxury travel market.
A Luxury Retreats customer tends not to be the young, single, Millennial Airbnb traveler, thirsty for experience and open to chance happening and surprise, but are instead people who have families, who are pressed for time and don’t want to be plunging their children into dicey and unpredictable settings.
“Family and group travel is something that we’ve really seen increase,” says Laporte. “Looking across all destinations, not only Asia or Europe, every destination has seen an increase of travel with kids and larger groups.”
When it comes to booking a vacation for those groups, it is inevitably the wife that does the booking.
“Most of our customers are located in Los Angeles, New York, Miami, all the big U.S. cities,” says Laporte. “And they’re actually very interested, like a lot of women from 35 to 55, in recipes, travel and fashion. So that’s what we tap into.”
This theoretical Luxury Retreats customer is also highly influenced by word-of-mouth when it comes to making purchase decisions.
“People are really looking to build experiences, and really collect them. People travel to discover things and have memories.” – Catherine Laporte
That customer also does not have time to be shopping around. She wants to book a trip now, and avoid spending hours browsing the internet, another quality that sets her apart from a Millennial willing to take a chance on Airbnb.
Laporte identifies word-of-mouth as Luxury Retreats’ number-one method of lead generation, which inevitably means that a lot of time and resources are dedicated to cultivating brand ambassadors, influential blog writers or social media influencers who carry a certain credibility with a certain kind of audience.
“People are really looking to build experiences, and really collect them,” says Laporte. “People travel to discover things and have memories,” adding that travelers are also selecting vacations on the basis of “passions” rather than destinations, whether that means shopping, surfing, or going on a wine or food tour.
Luxury Retreats CEO Joe Poulin refers to his company’s strategy as “de-randomizing experience”, or taking the chaos and guesswork out of the kind of blind buy that many people associate with the sharing economy.
To no one’s surprise, however, “beach” destinations represents about 50% of Luxury Retreats’ portfolio, representing the number-one destination.
In June 2015, Luxury Retreats raised an $11 million Series B investment, led by iNovia Capital, along with partners Claridge Inc., InterMedia Partners, and Groupe Dynamite.