Onefinestay Aims for Luxury With 'Unhotels'
Entrepreneur Evan Frank sees his startup Onefinestay as the perfect solution for hotel guests missing the comforts of home. But don't think it's a knock-off of Airbnb, a hugely popular bed and breakfast e-commerce site, he said.
"Onefinestay is creating a new category of city accommodations, something that combines the best parts of a boutique hotel with the best parts of staying in someone's real home," Frank said.
Travelers stay in high-end private residences, with the company providing service normally found a a 5-star hotel, he explained. Onefinestay also prepares the home, which the company calls an "unhotel," and manages the booking. (Read More: Q&A With Onefinestay's Evan Frank)
By using other people's homes, Onefinestay doesn't have to carry inventory like hotels. However, the company could face a scalability problem similar to Groupon, where its overhead costs increase every time it launches in a new market.
Frank, a former founder of another e-commerce site iWantBox.com, believes Onefinestay can scale.
"I think it's scalable because we're scaling. It's not that we're doing this in just one city. We're already doing this in two cities [New York and London], and we will be rolling out," he said.
Onefinestay also faces stiff competition from luxury hotel chains that offer similar accommodations. However, Frank isn't concerned these players will crush his business.
"I don't think this is about killing the hotels. That's not what we're in business to do." he said. "What we're doing is fulfilling a need that a hotel isn't always best to fulfill … kitchens, for example, comfortable living spaces."
The site has added over 500 homes in London and nearly 100 homes in New York since launching in 2010. And with the right approach, Frank believes his company can expand into another 50 markets.
Onefinestay has raised $16 million in funding from venture capitalist firms Canaan Partners, Index Ventures and PROfounders. Frank also said his venture is backed by leading players in the travel and hospitality industry, including Lastminute.com's co-founder Brent Hoberman and Active Hotels' co-founder Andy Phillips.
-By CNBC's Erin Barry
Evan Frank appears on "Power Lunch" Wednesday, Feb 6. at 1 p.m. ET.