Renthome.ru starts regional expansion
With the help of new round of investment and user generated reviews
Renthome.ru, the new online resource for independent travelers offering a wide selection of short-term vacation rentals across Russia and the CIS, has closed an angel investment round of approximately $1 million. Participants in this round of investment include Russian and foreign entrepreneurs, as well as players from the real estate market and finance sector.
This is an investment round of “smart money” which is providing Renthome.ru with additional value as the new investors are not only putting money in the company, but they are also helping to develop the business. They are bringing their global expertise in the real estate market as well as their network of connections in the finance sector to help build a network of partners and service providers to support the company’s rapid growth.
The majority of funds will be allocated to developing a regional network and to marketing. Apart from Moscow, Renthome.ru will expand its physical presence into 10 more Russian cities and 1 city in Ukraine – St. Petersburg, Ekaterinburg, Sochi, Kazan, Nizhniy Novgorod, Novosibirsk, Krasnoyarsk, Krasnodar, Rostov-on-Don, Tyumen and Kiev. There will be at least one regional representative of Renthome.ru operating in every city.
Until recently, RentHome’s expansion of its listings database across Russia and the CIS was conducted by its sales managers in the Moscow office, with support from specialists based out of its regional office in Ivanovo. In the last 8 months alone the company has managed to compile the largest database of real estate listings compared to all other Russian online services. Renthome.ru has nearly 17,000 active properties (including up to 2,000 European properties) which are located in over 700 Russian, CIS and European cities and towns. As best practices have shown, only personal interaction with clients can help compile a database of top quality rental properties and maintain the exceptional level of client service.
Renthome.ru aims to have as many as 25,000 properties on offer by the end of the year. At present, every property receives at least one booking request per month from visitors. The website expects to raise this figure to 3-5 booking requests, which is the standard in the international vacation rentals market.
The new regional managers will personally interact with regional clients. In addition to finalising contracts, they will ensure that the property corresponds with the written description as well as helping property owners to write their profiles and take photos. The primary objective of this work aims to build trust in both Renthome.ru and each property listed, as well as improving the overall image of the online vacation rentals market.
To meet this objective the company is planning to expand its overall marketing budget with increased accent on social media and social networks. Oleg Midar, Marketing Director of Renthome.ru, expects to increase the number of users’ reviews to make the service more attractive to new users.
“The website visitors will become our brand ambassadors and auditors at the same time,” comments Midar. ”If the photos or descriptions placed on the website do not correspond with the reality, the users will be compelled to write a review highlighting the properties’ inconsistencies. Likewise, if new owners see the quality of listings descriptions which have been enhanced by our editing staff, then this will raise the bar for them. It will encourage them to match the quality already established on the site, in an effort to make their listings appealing and competitive.”
Dwight Linden, CEO of Renthome.ru anticipates that the regional expansion and the new marketing strategy will significantly increase all of the key business indicators of the company, including traffic growth from 17,000 to over 25,000 unique daily visitors.
Renthome.ru is operating in a promising and rapidly developing market. Experts forecast that the market volumes for short-term property rentals in Russia will double each year in the foreseeable future. The reasons for this are twofold:
Firstly , there is a rising popularity of domestic tourism in Russia and the surrounding area. According to the Russian Union of Tourist Industry, about 30 percent of Russians choose to travel within the country, whereas only 5 percent go abroad. Another source[1] states that in 2011 alone the total number of travellers within Russia (including business trips) totalled 96.4 million people.
Secondly, research conducted by RBC[2], confirms that more than 60 percent of respondents prefer organizing trips by themselves and not using travel agents. Therefore logically more and more people will be looking for accommodation online. Considering the large deficit between supply and demand for hotel rooms in Russia (4.5 places for 1,000 people compared to 13-35 places in European countries) and high prices, the travellers are likely to choose an apartment, rather than a hotel. Moreover, in addressing the needs of the local market, one of the additional services Renthome.ru offers to its Russian clients is a list of owners providing business trip supporting documentation (a unique Russian accounting and reporting requirement for business travellers).
[2] ‘The Russian market of inbound tourism. Investment venues in the Russian regions’