Airbnb opens the door to the purchase of Luxury Retreats International in Montreal

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Airbnb Inc. is in talks to buy the Montreal company Luxury Retreats International Inc. to help it expand into high-end vacation rentals and travel services, people familiar with the matter said.

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Airbnb’s board is expected to vote this week on approving the deal, said the people, who asked not to be identified as terms have yet to be finalized. A sale is not expected to bring in more than $ 300 million in cash and stock, one of the people said.

“We are always looking to provide our community with access to new and different options, but we have no announcements to make,” Airbnb spokesperson Nick Papas said Thursday. A spokesperson for Luxury Retreats declined to comment. Luxury Retreats is expected to operate with its own employees in Montreal, one of the people said.

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Luxury Retreats, which has more than 4,000 properties worldwide, is said to be Airbnb’s largest acquisition. Adding more high-end rentals would allow Airbnb to target the type of customer base willing to pay for its new luxury tourism services. In November, it started offering truffle tastings, mushroom hunts, and guided tours led by local experts. The company is looking to expand into other travel sectors and is working on a flight booking tool.

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Airbnb still has almost all of the $ 3.1 billion in funding it raised from investors, who last valued the company at $ 30 billion. Founded in San Francisco in 2008, Airbnb first made a profit in the second half of 2016, Bloomberg announced last month and plans to maintain profitability this year.

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Luxury Retreats is not a rambling young startup

Luxury Retreats is also profitable, said a person familiar with the matter. And it’s not the sort of rambling young startup typically targeted by Silicon Valley buyers. Founder Joe Poulin started building websites for Caribbean villa owners in 1999 at the age of 17. Over the next decade, he added new destinations and acquired another Caribbean-focused rental brokerage in 2011. Luxury Retreats raised around $ 16 million in two rounds conducted. by Canadian venture capital firm iNovia Capital.

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The website looks like Airbnb’s. Its villas, chalets and other luxury homes cover 90 markets around the world, generating around $ 150 million in gross bookings per year, according to the company. Luxury Retreats said it carefully reviewed every property on the site and that less than 5% of applicants’ homes were selected.

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The Luxury Retreats site also offers guests a concierge service with access to private chefs, bartenders and masseuses, similar to what Airbnb added a few months ago. Airbnb is eager to implement the Luxury Retreats software designed to manage these services in its own system, a person familiar with the matter said.

Airbnb has over 2 million listings, of which around 1,400 are “castles”. The company is also experiencing strong growth in Luxury Retreats’ home country. Airbnb said this week that it sees plenty of room to expand in Montreal and other Canadian cities, including Toronto, where listings jumped nearly 60% last year.

Luxury Retreats could strengthen Airbnb’s brand among wealthy globetrotters and help the tech startup fend off Expedia Inc. and Priceline Group Inc. The two travel industry giants have focused more on renting homes, l Expedia’s HomeAway unit focusing on vacation destinations like Florida or Colorado hill stations – precisely the market in which Luxury Rentals operates.

by Olivia Zaleski, Gerrit De Vynck and Scott Deveau