As part of its reorganization efforts, Expedia Group is winding down its multifamily building short-term rental business that it began with the 2018 acquisitions of Pillow and ApartmentJet, Skift has learned.
Pillow had counted Airbnb as its exclusive multifamily software partner prior to Expedia buying the company. But Airbnb spokesman Tim Rathschmidt said Monday that Airbnb discontinued the Pillow partnership soon after Expedia acquired the company, and built its own service.
An Expedia spokesperson on Monday confirmed that the company is “winding down” Pillow and ApartmentJet “as part of our drive for simplification.”
IS MULTIFAMILY DEAD?
Reem Ibrahimi, founder of private equity fund Capstron Capital, based in Boston, said Expedia was in the early stages of its efforts in the multifamily sector so the shutdown of that business won’t be extremely impactful.
“City apartments are the most-impacted because they are driven by travelers coming into cities for work,” Ibrahimi said. “It’s going to take a long time to revive, and that may include a pivot on the owners’s side.”
Ibrahimi advocates a “diverse cash flow model” for owners, where a property might include, short-term rentals, long-term rentals, affordable housing, and some units geared for workers.
ADDRESSING THE NEEDS OF BIG OWNERS AND OPERATORS
The comings and goings of short-term rental guests, along with parties and noise issues, has been a major issue for landlords and tenants in large apartment buildings, as well as for their communities. Expedia’s Flex tools were geared to enable owners and operators to pick up incremental revenue from short-term rental guests, but also to track the stays of such guests.
“With the reset caused by Covid, a lot of these experiments are just getting shut down to focus on the core business,” said Andrew McConnell, CEO of Rented, referring to forays into the space by large corporations. “In some instances this might be a forcing mechanism to exercise discipline in cutting things that really should have been cut anyway. In other instances, it might lead to cutting things that are promising, but just don’t make sense right now.”
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