Luxury Vacation Rental Platform Portoro Plots Its Escape

These days, who doesn’t want to get away from it all?

For individual owners with luxury vacation homes in desirable getaway destinations in the U.S., proptech vacation rental platform Portoro seeks to match their management and marketing needs with vacationers looking to access such properties.

And, as summer approaches, U.S. luxury travel is looking to maintain its global leadership position in domestic luxe tourism. Annual revenue in this sector increased from $204.3 billion in 2020 to $304.5 billion in 2024.

“We focus on managing other people’s Airbnbs, for lack of a better term,” said Dustin Abney, co-founder and CEO at Charleston, S.C.-based Portoro. “We’re a full-service property management company, and our edge is that we have a suite of tools and processes that ultimately produces more return for homeowners, including higher revenue and better maintenance on the home.”

Portoro provides a combination of proprietary technology with the company’s scale and size, said Abney. He noted that the Airbnb-like home-sharing industry has 1.8 million listings in the U.S. but is highly fragmented.

“There’s about 24,000 of what we call professional managers, and they manage more than a few properties each, but they’re quite fragmented and old school in their methods,” said Abney. “It reminds me of the old real estate brokerage offices — a lot of brick and mortar and front desk people. We put a technology spin on this.”

Portoro uses machine learning and artificial intelligence-powered dynamic pricing for its customers’ properties versus local property managers who pick a seasonal rate or a weekly price for a home and set that rate, he explained.

Along with tech-enabled pricing, Portoro looks at booking lead times and demand inventory, while continually tweaking prices to get the highest revenue per available rental, making the company more like the hotel and airline industries, said Abney. The result is the ability to produce 20 to 30 percent higher revenue versus its competitors.

On the distribution side, Portoro will use large online travel platforms Airbnb or Vrbo to get bookings, just like local property managers do. But Portoro also distributes to a variety of different online luxury travel portals like Kirkland, Wash.-based Merit Homes and Villas, Capital One Travel and Plum Guide.

“So, by having our system be able to distribute and manage all the listings on those platforms, we can drive more occupancy and more rentals, which then obviously relates to more revenue, and a lot of guest and homeowner satisfaction,” said Abney. “It’s a two-sided marketplace where the homeowner can see the real-time value of your bookings. It’s all about transparency and information on the other side of the market.”

Portoro has no shortage of competition in the vacation rental market, with proptech companies such as Evolve, SkyRun, Sonder, Vacasa and others flooding the zone from short-term to long-term in luxury and non-luxury rentals.

“We focus on luxury, very large homes,” said Abney. “It is more profitable because of contribution profit, meaning it takes about the same amount to manage a one-bedroom condo as it does a five-bedroom beach house that does 10 times the amount of revenue.”

Luxury vacation rental property owners use Portoro instead of a platform like Airbnb or others, because, “Otherwise, they have to manage the guest communications and pricing,” said Abney. “They have to manage cleaners, maintenance, all those kinds of things. Most of our homes are $1 million to $10 million homes. They’re very luxury.

“And our homeowners are predominantly professionals who don’t have time to deal with a vacation rental. Our occupancy levels are 60 [percent], and sometimes in peak season 100 percent occupied, with 50-plus check-ins and checkouts a year on a property. It’s a lot to manage, so they hire us to facilitate all of that.”

Founded in August 2022, Portoro currently has 800 properties signed with about 190 of those properties that will go live on the platform June 1, in locations such as Austin, Charleston, St. Augustine, Fla., and Sunriver, Ore., said Abney. The company has 50 full-time employees in the U.S. and Saõ Paulo, Brazil.

Portoro has raised $5.3 million in seed funding and is raising a Series A round with Downing Capital Group as lead investor, said Abney. The startup has collected more than 50 percent of the Series A round, he said, adding: “We’re already profitable and targeting $5 to 7 million in EBITDA this year.” (EBITDA is earnings before interest, taxes, depreciation and amortization.) 

The company is using its debt funding from Downing Capital Group to acquire other luxury property management companies, having already acquired 10 to date, said Abney.

“The reason we’re buying these companies is that market entry is quite expensive, and the most effective way to enter a market, based on our thesis, is to acquire an existing property manager that is very under-optimized,” he said. “They have beautiful homes and we’re rolling all the properties onto our platform, and then going out and marketing to new homeowners to join the platform from that portfolio base.”

Saying that the fragmented sector is ripe for consolidation, Abney is quite candid about the luxury rental market’s opportunities for mergers and acquisitions by Portoro (or of Portoro).

“There are some really good, successful companies,” said Abney. “They’re just very, very under the radar private companies. One I always like to point to is called Awayday. They’re not public. They’re private equity backed. They have 8,000 properties and are likely to be at 10,000 very soon. They’re a very profitable company. Another one’s called Nocturne Luxury Villas, which is privately held and has maybe 3,000 properties.”

Portoro is following a similar path versus some of the other more public companies, he said.

“There’s a lot of interest from private equity to combine these companies,” Abney said. “And that’s what we’re seeing with Awayday. They’re taking large regional players and rolling them together. I have a really good relationship with the CEO, and he basically said, ‘Hey, when you guys get to a couple of thousand homes give me a ring because we want to scoop you up.’ 

“There’s a lot of consolidation opportunity, and that to us is our clear exit path. Get to 5,000 properties and merge, or be bought out by one of the players in the space.”

Philip Russo can be reached at prusso@commercialobserver.com.