Amy Froelich and her wife, Marla, have been hosting on Airbnb, Inc. since 2015. They began in Iowa City, Iowa, and moved on to Madison, Wisconsin, where they own a four-bedroom home in a leafy neighborhood inside walking distance to mountaineering trails and shops. During the weeks their home isn't rented, they provide it at no cost home swaps through HomeExchange—a web-based travel hack they found three years ago that enables them to trade their home at no cost accommodations elsewhere.
“We were just doing a home exchange outside of Glasgow, Scotland. This wonderful couple, Claire and Michael, greeted us at the door with homemade bread that she had just taken out of the oven,” Amy Froelich tells Bloomberg from the UK, a day after their stay ended. The hosts were unable to maneuver out on the agreed dates, but offered the couple a loft with a master suite and personal bathroom. In return, they will live within the Froelichs' house at a later date of their selecting. “This is much more than just monetary value,” says Froelich. “We parted as lifelong friends.”
Offering your own home in exchange for a stay at another person's is much from a brand new concept, but this often-forgotten a part of the travel industry is booming amid high inflation, the normalization of distant work, and skyrocketing hotel prices. Also contributing to the trend are growing frustration with short-term rentals and increasing regulation of rental housing in major cities.
In conversations with 4 home exchange firms, all reported double or triple-digit growth in 2023 in comparison with last 12 months, based on the variety of members or home exchanges conducted on their platforms.
Kindred, an invitation-only membership platform founded in 2022 with access to 30,000 homes in 100 cities, saw home swaps increase 800% year-over-year in 2023. The San Francisco-based startup has raised $26 million; early investors include Andreessen Horowitz, the identical firm that contributed $112 million to Airbnb's Series B funding round in 2011. (Bloomberg LP, which owns Bloomberg Businessweek, is an investor in Andreessen Horowitz.)
Kindred's model is analogous to that of pioneers equivalent to HomeExchange and Third Home. Users earn “credits” after they host other members. These credits can then be redeemed for stays elsewhere. Kindred's unique feature is that it doesn’t charge an annual membership fee. The company makes its money primarily through service fees.
Founded in 1992, HomeExchange saw a 53% increase in exchanges in 2023. The company has greater than 170,000 members in 140 countries. In 2022, a premium tier was added to the usual $220-per-year membership. For $1,000, the HomeExchange Collection opens the door to five,000 luxury properties with a mean value of $2.5 million. Think urban penthouses, castles, and wilderness retreats.
The move challenges ThirdHome's competitive advantage as a platform aimed exclusively at luxury property owners. Its 17,500 vacation homes in 100 countries are price a minimum of $500,000 and a maximum of greater than $50 million, including yachts. Membership costs $295, with service fees for every exchange starting from $495 to $1,395 per week. ThirdHome has also grown: The variety of members increased by 41 percent in 2013 in comparison with 2022, and the variety of exchanges increased by 16 percent.
“We're growing, we're hiring people, and we've been making a profit for five years,” says Wade Shealy, who founded ThirdHome in 2010 with a portfolio consisting of the homes of some friends.
The fame of home exchange is an issue. Many consider it an unglamorous option for budget travelers, with the chance of property damage. But insiders have realized – and this has driven the expansion of the sector – that the alternative could be true if the exchange partners are well-vetted.
A human connection
Rachel Lipson says her family of 4 has saved tens of hundreds of dollars since she began swapping her home in Brooklyn, New York, in 2022. She uses the Barcelona-based, invitation-only home exchange platform Behomm, which charges an annual membership fee of €380 ($407) and focuses on the homes of creative people and design lovers.
“I found it a little overwhelming at first,” Lipson says. “How could I allow anyone to stay in my house? I had a hard time trusting that everything would be OK.”
When she received an initial exchange request from a Behomm member in Marrakesh, Morocco, the day before her family was as a consequence of visit Los Angeles, Lipson decided to hearken to it. “We FaceTimed to talk – and we felt really good about it, so we said yes,” she says. The family stayed at her home while she was in a hotel in LA. During spring break the next 12 months, Lipson's family stayed at that member's home in Marrakesh.
So far, Lipson's family has home swapped with members in 16 destinations, including Paris, Montreal, Punta Cana (Dominican Republic), Cancun (Mexico) and Reykjavik (Iceland). When the dates she wants aren't available, Lipson looks at hotels and Airbnb. “Some of these homes you wouldn't find for rent,” she says. “And it's like staying with a friend while they're out of town. You really get to know the people, and that's an experience I've never had with Airbnb or hotels. It's really its own.”
An evolving accommodation scene
When the economy slumps, inventory at ThirdHome increases, Shealy says. “About half of our members have their vacation homes on short-term rental platforms, and if they don't rent them out as often, they have more availability to put into the system.”
To raise awareness, ThirdHome now offers a free one-year membership to individuals who buy recent vacation homes at Rosewood or St. Regis resorts, for instance. Developers report that this profit helps them close additional transactions. “We're currently getting about 500 new members a month just through our (commercial real estate) partnerships,” Shealy adds.
Kindred, alternatively, focuses more on big cities, with the corporate seeing its strongest growth in Los Angeles, New York and London. “I can't say that it's necessarily because Airbnb is being displaced,” says Justine Palefsky, who co-founded the corporate to enable a multi-city lifestyle that doesn't require taking out multiple mortgages.
Even though short-term rentals remain legal in a few of these markets, Palefsky observes that many members are switching to Kindred because they’re fed up with Airbnb and its competitors. High prices and a desire to get something out of their homes “without feeding the vacation rental monster” are forcing consumers to search for alternatives, she says.
Airbnb Inc. denies that its appeal has waned. “With over 7.7 million listings and over 1.5 billion guest arrivals in nearly every country in the world, we believe we give travelers the opportunity to get to know local communities in many more places than any other travel site, while providing them with important safeguards to protect their trip,” a spokesperson said.
Weighing up the risks
Like Kindred, ThirdHome and HomeExchange, Behomm's founder insists that careful attention is paid to vetting each member, from verifying ID documents to reviewing home photos and other security measures.
Still, home exchange could be stressful. Finding a house exchange site in your required location could be time-consuming and availability is much from guaranteed.
“I probably spent three hours just sending out inquiries,” says Marla Froelich about her seek for accommodation in Scotland.
Those who swap frequently say that accidents can occur – spilling wine on a designer sofa or putting a kettle on the stove – but these are often quickly resolved. The greater risk with swaps is serious property damage or personal injury while a guest is caring for the home.
Many home-swapping platforms offer host protection, which covers as much as $100,000 in damages with Kindred and as much as $5 million in damages with ThirdHome. And some homeowners and rental policies also cover third-party damages.
If you concentrate to those subtleties, home exchange opens the door to almost free stays in among the world's most sought-after travel destinations.
In September, for instance, the Froelichs will travel to Bali, Indonesia. An Australian family who spent every week at their home a 12 months ago through HomeExchange offered to swap at their family's vacation home in Indonesia. “We told them we wouldn't be able to make it (to Bali) for at least another year, and they said, 'We don't care when you come, just tell us. Our driver will take you wherever you want to go, we'll organize everything for you.'” That's greater than even most luxury hotels offer.
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