Dasha Zhukova’s New Real Estate Venture

The future of museum-going and cultural forays could be down in your own lobby, according to Dasha Zhukova, the arts patron and philanthropist who is launching a new residential real estate development firm in New York.

Ray, the name of Zhukova’s new brand, sets out to remedy a blind spot she sees in the residential world: the lack of arts and culture experiences in urban developments. Where other buildings and “co-living” spaces offer perks like golf simulators and dog grooming services, Ray’s buildings will offer cultural programming like master classes, events and workshops drawn from local institutions and artists to encourage creative synergy, says Zhukova, 39, with rents pegged at or below market rate.

One of the venture’s projects is reimagining Harlem’s three-story National Black Theatre, founded in 1968 by the late Barbara Ann Teer on the corner of 125th Street and Fifth Avenue, and is set to break ground by the end of May. A 21-storey building will take its place, with the new theatre space, retail and an event space spread across the first four floors, which Ray is developing with L+M Development Partners. The final structure will include 222 apartments, as well as artist studios, co-working spaces, communal kitchens, a library and a wellness space, and is slated to be completed in 2024.

Teer’s daughter, Sade Lythcott, now leads the theatre. “This project and partnership has felt [like] kismet from the time Dasha and I first met in 2019, not around aesthetics or Ray’s business model, but around our mothers. What it has meant to be women, raised by fearless matriarchs,” Lythcott wrote by email. “There is an incredible amount of equity created when you first start from a place that recognizes our shared humanity, honours what came before, in service of creating the built spaces of the future.”

Zhukova was inspired to launch Ray after seeing how visitors were drawn to the Garage Museum of Contemporary Art, the Moscow museum she co-founded in 2008. Its current home was designed by acclaimed architect Rem Koolhaas. “Even if [visitors] had seen all the shows that we had on, they would just stay and hang out in our lobby,” she says. “They would hang out in our cafe for hours on end—just come back day after day because they wanted to be in that environment.”

While hotels such as New York’s Gramercy Park Hotel have showcased art collections including names like Andy Warhol, Damien Hirst and Jean-Michel Basquiat, and developers have often staged high-end homes with trendy art to help sweeten the blue-chip price tags, one of Ray’s rental buildings will boast a permanent installation by Rashid Johnson, whose work just fetched a record US$1.95 million at Christie’s on May 11. Johnson will be creating a plant-filled installation for the lobby of a 110-unit building in Philadelphia’s rising Fishtown neighbourhood, which also will have six street-level artist studios, as well as maker spaces, and will be completed in 2022.

“Access to art shouldn’t be for a privileged few,” Johnson wrote by email. “These art and living spaces are aiming to bridge some of this gap, for me that’s exciting.”

The first two Ray ventures in Philadelphia and Harlem are largely financed by Zhukova. Ray recently inked a third deal, in Miami, where the site will expand beyond the 250-plus unit rental building that will anchor it, says Zhukova, with future plans for retail, offices, landscaped walkways and single- and multi-family homes.) With each project, Ray will emphasize new buildings rather than retrofitting existing space: “To truly rethink the space and how we occupy it…you really need to rebuild,” says Zhukova, who is looking to make inventive use of materials and space in part to make up for areas where Ray is spending more freely. “The focus [is] on how our habits have changed, the technological innovation and the cultural change.”

Her team at Ray currently eschews traditional titles—Zhukova calls her colleagues “thought partners”—and includes Will Kluczkowski, a real estate veteran from DDG; Becca Goldstein, a Stanford MBA whose CV includes a stint at a Brooklyn-based whisky distillery; and the design gallerist Suzanne Demisch.

“We are looking for creative solutions,” says Demisch, who says she enjoys the challenge posed by a limited budget. “We are asking why. There’s not a package for all the touchpoints of the experience—it’s about the aesthetic and the culture of each location.” Months were spent developing and perfecting the hand-split bricks for the facade of the Philadelphia project with manufacturers Glen-Gery and architecture firm Leong Leong—and finding the perfect Pantone swatch for the pinkish hue of the Harlem building facade, which is a nod to the historic Nigerian site the Osun-Osogbo Sacred Grove.

Such historic references were a priority of the architect of Ray’s Harlem project, Frida Escobedo, who is based in Mexico City. Art panels, inscriptions and a geometric, rhythmic facade that echo the motifs of the original National Black Theatre all refer to its previous incarnation, but “we’re also putting a great deal of focus on communal spaces, such as the artist studio and constellation of gathering areas,” says Escobedo, who is collaborating on the interiors with designer Little Wing Lee of Studio & Projects.

Zhukova, meanwhile, is partnering with Artspace, the Minneapolis-based nonprofit developer of art spaces, which will receive funding from the Ford Foundation in order to provide housing and studios at the Harlem building. She hopes to do the same in all Ray buildings. Her goal is to create accessible rents that will allow artists to remain in their home neighbourhoods rather than fleeing cities for more affordable live/work options. Zhukova next has her eye on rising cities including Austin, Nashville, Denver and Portland, Oregon, where she says they will focus on neighbourhoods that are a cultural fit for the brand.

“My personal dream is to build in Arizona,” says Zhukova. “I think in that climate and given the less restrictive building codes, you could build something absolutely incredible.”

AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.

Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

Dasha Zhukova’s New Real Estate Venture

Ray, makes It ‘night at the museum’ every night.

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.