Finding a niche in today’s cluttered vacation rentals marketplace isn’t easy, but Homestay.com seems to have done so. Pamela Whitby reports

Two years ago a couple of veterans in the hostel and education homestay arena spotted a gap in the market. Debbie Flynn, the founder of Irish Education Partners, and Tom Kennedy, a co-founder hostelworld.com, recognised the need for a platform that would cater to the accommodation requirements of the conservatively estimated 2 million people who travel abroad each year to learn a new language.

“There was simply no technology to transparently support where somebody was going to stay or the booking process,” says Alan Clarke, Homestay’s chief executive.

Not to miss a trick, Flynn went off and registered the domain name – which says what it does on the tin - but it took until July 2013 before the website officially launched. The aim: to create a single destination online where guests and hosts looking to share experiences can find each other. “Today we are signing up around 100 hosts a day in over 80 countries,” says Clarke.

Over the past few months, homestay.com has witnessed triple digit growth and this week funding round and acquisition marks another milestone in the firm’s upward trajectory.

Led by Delta Partners and supported by Enterprise Ireland, this week homestay.com secured $3 million in funding and acquired Berlin-based HomestayBooking.com, taking its number of host listings to 25,000 worldwide. HomestayBooking, one of a small number of private accommodation aggregators focused specifically on the host-is-present model, launched in 2007 and today includes listings in more than 30 countries, has 70,000 guest accounts and supports five languages.

While 18-plus language students looking for a place to stay provided the impetus for homestay.com’s initial offering, it didn’t stop there. According to Clarke, the broader audience includes anyone after an authentic, local experience and could include somebody looking to relocate for work, to spend a semester abroad on a particular research topic, or simply trying to find accommodation for a popular event.

A diverse and growing market

Speaking at the recent EyeforTravel Travel Distribution Summit, Europe, Marcello Mastioni, Senior Operations Director Europe, HomeAway about this growing experiential segment pointed to a paradigm shift in the way people travel. Whereas in the past travellers would look for high levels of comfort, privacy, and be be driven by status and so on, today’s multi-generational traveller is interested in everything from voluntourism to ecotourism and unique and authentic experiences.  

We have found that there are a huge and diverse number of reasons why people travel

Alan Clarke, chief executive, homestay.com

“We have found is that there are a huge and diverse number of reasons why people travel,” says Clarke. “And the demographic isn’t always what you might expect.”

For example, over 50% of homestay.com’s users are over 30 and 40% are over 40. Also while the average ‘homestay’ is around nine days, he reveals that one guest working on a marine biology project in Ireland stayed over three months.  

So yes, on one level, homestay.com is going head-to-head with Homeaway and Airbnb but where it differentiates is that the host is always present.

As Clarke points out, in such a competitive market, there is bound to be some consolidation and HouseTrip's decision to remove private rooms from its listings is just one example of the market splintering.

Homestay has taken two-pronged approach with a:

1. Consumer facing market place where hosts and guests can register and connect with each other.
2. B2B platform to support partners across the world when there is an accommodation shortage. For example, the recent Ryder cup has built a bespoke network of homestays using the platform that can be managed centrally. The aim is for this model to be replicated around the world whenever there is an accommodation shortage.

With the recent spate of Airbnb evictions in New York, does Clarke foresee any challenges to the hosted homestay model? “It’s hard to say how the regulatory framework will emerge but there is an acceptance of the homestay experience where there is a host present,” he says.

Like others in the peer-to-peer space, homestay.com will require a vetting process and both hosts and guests will have ability to build their own profiles. “The host is always the gatekeeper,” explains Clarke.

So where to next? This week’s funding will allow homestay.com to develop new products and services including additional language support, new applications, mobile device integration and other services.

In the first instance, it’s about making the B2C product more robust and raising brand awareness. The longer-term B2B goal, however, is to acquire local partners in each country and then use that on-the-ground knowledge to build a global network of hosts.