Private equity firm TPG Inc has been buying single-family homes in Florida vacation areas, where it is renting them out daily as alternatives to hotels and short-term rentals on websites such as Airbnb, the Wall Street Journal reported.
The company, formerly known as Texas Pacific Group and TPG Capital, has hired Kasa, a hospitality firm that manages about 75 properties for daily lodging across the US, to manage the Florida homes.
A TPG spokesperson told the media outlet the Florida home-buying project is a "pilot program" and wouldn’t necessarily scale to large numbers if results fall below expectations.
If successful, though, the company would look to expand to other vacation markets.
TPG is aiming to tap into a trend where people are combining business and leisure trips in a phenomenon the lodging industry calls ‘bleisure’ travel, while also targeting those who want more space, a kitchen and greater privacy than a hotel can offer.
The private equity firm believes that by renovating the Florida homes, adding new furniture, and professionally managing them through Kasa, it can charge a premium rate compared with individual Airbnb hosts, who have been known to offer inconsistent service.
TPG, though, has paused most of its buying in recent weeks as soaring mortgage rates and tight supply of inventory for sale has limited opportunities.
Meanwhile, big hotel chains such as Hilton, Hyatt, and Marriott International (NYSE:MAR) have recently unveiled plans for new extended-stay brands.
Contact Sean at sean@proactiveinvestors.com