Montreal-based company offers short-term rentals with high standards and hotel-like service touches – and low fees
The sharing economy has irrevocably changed the way people travel, and that’s both good and bad news depending on whom you ask.
It’s clearly bad for hoteliers, who have reported deep financial losses since home-sharing took off. And at just eight years old, Airbnb’s US$30-billion valuation makes it 30% more valuable than Hilton, a 97-year-old company that is also the world’s biggest hotel chain.
On the other hand, the Airbnb effect has arguably made travel a more human experience. Putting travellers up in hosts’ private homes, located in lived-in neighbourhoods, responds to the very essence of why many people travel: To experience a far-away place, rather than merely seeing a sanitized version of it.
Airbnb isn’t the only possible alternative to traditional hotels. Even with 2.3 million listings to choose from, Airbnb rentals aren’t always the most appropriate lodgings. Sharing a house with a few strangers and a live-in host, for example, often requires compromise and isn’t an ideal scenario for many travellers.
Montreal-based hospitality startup Sonder is hoping to edge in on that particular market: The travellers who want the home-share experience in a more private, professional and frankly posh setting.
Like Airbnb, Sonder lets travellers stay in other people’s condos, studios, guest houses, cottages and so on. However, all the locations — “hometels,” as Sonder calls them — are private and maintained with a 237-point checklist that includes crisp white sheets, stable water temperature in the shower and the right amount of cutlery in the kitchen. Guests can check in virtually and let themselves in to their temporary homes by entering a code into a keypad lock.
In exchange for advertising available homes, booking the locations, having them cleaned and responding to guests’ questions and needs, Sonder takes a commission of between 10 to 30% on the rentals, says Sonder co-founder and CEO Francis Davidson.
Once property owners have authorized the company to manage their properties, they have nothing left to do, Davidson says — other than collect their cash.
A guest’s experience
Sandra Sabatini rented a hometel for six days in Vancouver earlier this year. “Compared to a hotel, Sonder provided a much better experience — more the experience I was looking for, which was being part of a neighbourhood in a cosmopolitan city, doing my own groceries, cooking, and so on,” Sabatini says.
She enjoyed her Sonder experience more than many Airbnb and VRBO locations she’s stayed in. “Everything about the apartment had the unique hybridity of being both personal and anonymous in the best way,” she says.
Her well-appointed Vancouver hometel is listed on Sonder’s website at C$159 a night, a competitive price considering it included a gas range, a dining table, an office, living room and bedroom.
Davidson says being a technology company first — one that automates certain tools and tasks — allows Sonder to set affordable pricing.
“We’re growing extremely rapidly”
Sonder – a word that in German means “special” and which in French means “to explore” or “to investigate” (but which in English means something entire different) – came into this world under a different name: Flatbook.
Davidson and co-founder Lucas Pellan, now both 24, started the company in 2014 (along with a third person who left shortly thereafter), subletting apartments from students and part-time Montrealers and renting them out to travellers.
Sonder co-founders Francis Davidson, left and Lucas Pellan, right
But the company not only had trouble ensuring tight quality control, and subletting for a few months at a time meant the company was continuously on the hunt for new properties. The startup decided to forgo subletting as the core of its business, instead focusing in on properties that served as second homes or guest houses — places that were perennially vacant for months on end.
And so, in the two short years since its founding, the company has pivoted, raised a running total of US$15 million, secured 600 rental properties, opened an office in San Francisco and hired 65 full-time employees and another 50 or so part-time people.“We’re growing extremely rapidly,” says Davidson.
It’s a fast pace for someone who never thought he’d be in business, but Davidson says he relishes the intensity of operating a business that has moved from an apartment to two offices, has raised millions of dollars and employed 100-plus people in two short years.
A former philosophy and economics student at McGill University in Montreal, he attributes some of his success as an entrepreneur to the kind of rigorous thinking that curriculum taught him. “I feel safe with extremely exciting challenges,” he says. “It requires a lot of focused hard work and it comes with incredible benefits in terms of how rewarding it is to build something from nothing.”
Sonder is currently offering rentals in Montreal, Toronto, Vancouver, Boston, Chicago, Miami, Los Angeles and San Diego, with more to come in the following year.