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What’s Next for the Sharing Economy? Luxury

The desire for new experiences, a sense of community and long-term value is becoming ever more important in the luxury travel space. We look at how key players in the market are using the sharing economy to meet travellers’ needs.

In terms of global impact, the sharing economy has revolutionised everything: how we get around cities, how we experience other cultures, even who we sit next to at work. Companies like Airbnb and the growing number of co-working spaces populated by start-ups and freelancers are rewriting the rules across many different sectors.

But is the sharing economy having a similar impact on the exclusivity of the luxury sector? A spate of new arrivals, all catering to individuals looking for refinement and experience, as well as convenience, suggest luxury travel is the next frontier for the sharing economy.

Luxury sharing doesn’t just mean swiping right towards the more expensive models on a certain minicab platform. From the beginning, luxury variants on the sharing economy have been sitting very comfortably alongside more mainstream options. From players such as haute-couture ‘rentals’ via Oprent and Style Doctors to the Rotate Club, which offers access to high-end supercars, there are now models based on everything from fine-wine clubs to art co-ownership. And in prime property locations, flexible workspaces are booming, occupying more than 10 million square feet in London, with 2.5 million square feet of space let in 2017 alone. It’s clear the high-end sharing economy is in fine fettle.  

Mixing business with leisure

The common thread that runs through all of these firms is a desire for financially secure individuals to make efficient use of existing assets, but also to gain some depth as well as breadth when it comes to their lifestyle. The values of community and the allure of finding unique experiences are becoming ever more important alongside a keen sense of business.

The global concierge service Quintessentially has reported a recent two-thirds rise in demand from its affluent, established members for travel and consumer adventures ranging from small private tours to visit the wreck of the Titanic to private shopping experiences.  

But the disruptive firms that are really thriving are borrowing an old model, not dissimilar to that of the most successful shops on our high street: good service and building a loyal following, creating a sense of community, as well as offering all the convenience discerning customers expect.

One company optimising this idea – and underpinned by technology – is THIRDHOME, a travellers’ club that allows second-home owning individuals to travel and stay in other members’ luxury properties across the world. Credits are exchanged on the site, and members are usually greeted with the extra touches that come from being part of a community. 

Clubbing together

Giles Adams, the president of THIRDHOME in Europe, believes the service is far more than just an exchange platform. “We’re a club. Our members all have a certain level of affluence, they’re very like-minded, they all own a beautiful second home somewhere and they all like to travel.”

That community aspect is vital to the success of THIRDHOME, whose phenomenal growth –from just 110 members in 2010 to more than 10,000 across 94 countries today – underscores the model’s viability in the luxury sector.

“The desire for rich experience and to be a part of something bigger is something luxury sharing platforms are particularly well placed to serve”

“A club enables our members to get out what they put in. And that manifests itself in the way that they treat each other’s property,” Adams adds. It’s also – just like more traditional private-member clubs – a way to meet people who could turn into valuable connections.

Indeed, the company has hosted biannual jamborees bringing together members from across the world to facilitate personal relationships. Quintessentially reports there has been an 80 per cent spike in demand for its member events, and more than half belong to member clubs for just this reason.

Voyages of discovery

Adams lights up when he recounts the story of a group of individuals who agreed to go together to a fellow THIRDHOME member’s second home in the Galapagos Islands, before getting cold feet and trying to back out. Finally persuaded to take the plunge, they came back raving about it.

“We’ve got members who have been with us for a number of years and say, ‘Look, I’ve got some time off over the summer and you guys found me an incredible home in Italy last year’,” Adams recounts. “‘What’s in Croatia? What’s in Iceland? What have you got in those weeks that you would recommend?’”

It’s not so much conspicuous consumption as mindful consumption – all without giving up those luxury touches. The success of the enterprise relies on trust in both THIRDHOME as a company and in fellow members.

“A lot of our hosts leave welcome baskets and personal notes. If you’d just rented a place and you pay X amount for it, you might not care so much about how much water you’re using or how much heat or electricity you’re using,” explains Adams. “But you’re a guest in another member’s home, and you’re more mindful of your behaviours.”

The desire for a rich experience and to be a part of something bigger is where luxury sharing platforms are particularly well placed. And THIRDHOME offers members a chance to use property investment in an advantageous but thoughtful way – while offering the opportunity to travel differently as well. A tenet that transcends spend.

This trend has not gone unnoticed by other hotel and lifestyle brands: Marriott Hotels is offering 200 homes in London as a pilot, and Aqua Hotels and the Wyndham Group have bought travel disruptors Onefinestay and Love Home Swap respectively. However, the sharing economy isn’t likely to be subsumed by existing travel giants any time soon, as they remain in the process of catching up, rather than leading the way.

Setting sail for the future

Another travel start-up, Borrow a Boat, is the UK’s first peer-to-peer yacht charter platform – making it easier and more cost-effective to own boats for those who previously have been put off by high running costs and mooring fees. Having completed two successful rounds of crowdfunding and now on its third, the yacht charter platform has now expanded beyond yachts to include smaller boats such as kayaks and dinghies.

With accessibility and choice again at the heart of the platform, bookings can come in at the last minute for weekend breaks from London, for Mediterranean or Caribbean cruises or for trips among the Norwegian fjords, with more than 13,000 boats across 60 countries available.

Borrow a Boat’s CEO and founder Matt Ovenden says, “The sharing economy is about monetising under-utilised assets, and there’s no asset that fits the bill more than boats when it comes to typical utilisation and running costs. People don’t want to own things like they used to, but they want access to them, on demand, with no strings attached, and usually through a smartphone. That goes for high-end experiences like boating as much as booking travel and listening to music.

“We’re seeing an increase in people booking boats short term via the Borrow a Boat app, while already on holiday at short notice because the weather looks nice, and the boats are nearby – this is how boating should be.”

From journey to destination, luxury travel is just one of the areas set to be transformed by the sharing economy, and the model increasingly makes a compelling argument in both business and lifestyle terms. Can we expect more luxury brands to move in this direction? Watch this space.