Peer to peer boat rental company Beds on Board is hoping to break into the American market in its quest to add one million new beds to the tourism industry without building a thing.
Brothers Tim and Jason Ludlow launched the start-up in 2014 and – with the backing of multi-millionaire Sir Peter Ogden – want it to follow in the footsteps of sharing economy heavyweights Airbnb and Uber.
Boats on Board now has 1,000 listings on its website, which has around 20,000 members. It operates in 66 countries, with the UK and Mediterranean its “strong spots”.
It was in Palma de Mallorca that the penny dropped.
Jason, a keen sailor, was returning to port with his friend, and competitive sailor, Sir Peter.
“I’ve known Peter and sailed with him for many years now,” said Jason. “And it was coming into our marina when he asked the question: ‘How do we monetise these empty boats?’
“At the time [June 2014], people were struggling to get accommodation in Palma. It was one of those moments. We carried on talking and thought it was a good idea. I knew Tim worked in the digital world and he said it was a great idea but that it needs to be P2P, similar to Airbnb, which will allow you to scale.”
A feasibility study was commissioned and the brothers “pushed the button” in September 2014. The business works by taking a 5% fee from owners when their listing is taken up and 10% of the guest’s fee.
Sir Peter is the majority shareholder but has so far let the brothers, of Lymington, get on with running the business. They have a lot of boats in the Hampshire town, a popular tourist destination near the New Forest.
“There was never anywhere to stay [in Lymington] but there were lots of empty boats. It’s like a microcosm of our business with the lack of available accommodation, the demand for incoming tourism and the amount of available boats.
The brothers’ skills complement each other, with Jason’s 18 years’ experience in events management across business and leisure tourism and hospitality and Tim a former production director in Google’s creative lab.
“As the business is growing and maturing, Peter’s skill sets are becoming more relevant to us,” Tim told Travolution. “He’s a great asset and an advisor who really understands the bigger picture.
Tim recalled: “The reason I mentioned P2P was because there was a lot of talk about the rise of Uber.
“To get the business to global success it requires scaling. We need to take what we have learned in Lynington and Mallorca and take it to the world.”
Key to the mantra of the business is making use of boats that are empty and pumping life back into them, which the Ludlows say has had a positive knock-on effect in boating circles.
“We can help tourism by selling thousands of beds without building hotels,” said Tim, responding to criticism of the sharing economy that has led to some cities complaining use of sites like Airbnb has pushed up the price of renting.
“Our model doesn’t drive up the price for people who live there because we are taking stock which isn’t being used,” he added. “We open up a whole new market and it’s not as expensive as people think.
“You can be sat at home on your smart phone and book a boat on a marina for the same price as a hotel. It’s also bringing new people into the local restaurants, bars and shops and making marinas a destination rather than just a car park for boats.”
A crucial part of the business, for price and insurance reasons, is that guests are not allowed to operate the boats.
The Ludlows say this makes things easier and can reduce prices by as much as 90%. If the cost to sail a boat was somewhere in the region of £2,000, they said, it would be just £200 to stay there.
“People do not need any experience,” Tim added. “Staying on a boat is nothing new, even as a holiday. What’s new is access to the wider audience without experience.
“Our idea hangs on the fact that if a boat doesn’t move it is a different proposition for regulation. It’s less risk and a lot less cost to the owner.”
Trust, as with the rest of the sharing economy, is the key, Tim added.
“We run a very similar model to Airbnb. We hold personal details and once booking is agreed we release those details.
“Where we differ from our peers in the sharing economy is that – because it’s a niche idea – there are a lot of questions.
“The most fun, and the most success, we’ve had is in those questions. We jump in if certain questions aren’t being asked, or answered.”
Those questions can be anything from heating concerns to where the nice local restaurants are, and boat owners can agree to take guests out for a ride if agreed.
“A lot of the work we do is around building that trust between guest and owner. Human beings trust each other. People who wouldn’t want to rent their boats, or wouldn’t have dreamed of staying on a boat, can now.”
So with big money backers and a proven (on land) concept, what’s next for Beds on Board?
The short-term target is expanding its foothold within the EU, but the big goal is cracking America.
And Beds on Board – a member of Sharing Economy UK, the trade body for the UK’s sharing economy – is on the lookout for funding opportunities in the coming months.
“The US is a big market for P2P economy, and from a boating point of view it’s huge,” said Tim.
“We’ve already got a fairly good inventory there now but it’s got such potential.
“We’re already global and we want to add one million beds to the tourism market. That’s our north star.”