Advancing the Short-Term Accommodations Industry

Over the past few months, I’ve looked at nearly a dozen Airbnb-like startups. And like many investors, I’m typically pretty skeptical about consumer travel companies.

Travel is an infrequent activity and after spending a few years at Expedia, I can tell you that there’s a big gap between what we see on Instagram and how people actually travel.  

Consumers want unique experiences, but typically make booking decisions based on price, availability and convenience.

When it comes to short-term accommodations, Airbnb and Expedia are likely to own global network effects in this space for three reasons:  

  1. Homeowners and property managers are incentivized to cross-list on major platforms
  2. Consumer usage is episodic and driven by paid marketing spend
  3. Highest CAC/LTV wins based on conversion rate and market liquidity  

To break this network effect, I believe any new company will need to offer highly differentiated inventory or a stronger value proposition for property owners.  

In this post, I’ll cover demand-side differentiation and present a market map for evaluating inventory. In future posts, I’ll spend more time on supply-side services like Pillow and verticalized software like Hostfully.

When evaluating inventory, it’s important to look at both single properties, which emphasize loyalty programs and exclusive upgrades to encourage direct bookings and aggregators which provide a better search experience with a higher volume of available inventory.   

When it comes to demand-side differentiation, new players won’t be able to compete on total number of listings, however they can create competitive advantages through differentiated inventory and improved services. Hipcamp is a great example of differentiated inventory such as traditional campsites (high availability rate and high margin) and more premium inventory type such as yurts and cabins.

Demand-side differentiation can be created with one or more criteria:

  • Gaps in inventory type such as campsites and non-traditional accommodations such as Hipcamp and niche communities with social proof such as Overnight
  • Gaps in inventory location & availability such as unique advantages during peak travel seasons or high volume of available inventory in high demand location
  • Unmet audience segments such as kid-friendly travel, accessible-friendly travel (Accomable, acquired by Airbnb) or baby boomers. 

Let’s look at two examples of possible demand-side differentiators.    

Business travel is one segment with higher frequency and lower price sensitivity. Compare to other segments, business travelers are more likely to prioritize convenience over all other criteria.

They will pay a premium to be walking distance to a conference and close to the office. Due to the nature of the trip, a business traveler will look for amenities such as laundry service, free breakfast, daily newspaper and a mini bar for late night snacks.

Business travelers typically join a loyalty program and prefer a consistent experience in every city. This is an unmet need with the average Airbnb experience: finding keys can be a hassle, communicating with the host is time consuming and homes are unique by design.

Some companies that are tackling the business traveler segment:

  • Sonder: nightly bookings in Airbnb-like properties with hotel-like amenities.   
  • Zeus: monthly bookings in fully managed units
  • Outsite: group accommodations with a large common room to accommodate offsites

Extreme last minute is another interesting segment where travelers are willing to compromise on inventory quality and services to accommodate extreme last minute bookings.

Three types of extreme last minute inventory:

  1. Remnant inventory is last minute available inventory sold at a deeply discounted rate. For example: HotelTonight generates revenue by taking a cut of each transaction—about 20-30%.
  2. Opaque inventory offers deep discounts by specific suppliers (i.e. hotel, airline, etc.) however the specific name remains hidden until after the purchase has been completed. For example: Hotwire.com provides a neighborhood level map with proof points such as star rating and peer reviews to help ensure customer satisfaction.  

On-demand inventory is another segment where short-term accommodations can be booked instantly.  

Overnight is a good example where users can instantly book a friend’s home on the platform.

Recharge is another example where users can instantly book luxury hotels by the minute.

For hoteliers, this is a highly valuable model to increase occupancy rate above 100%. The only consideration is additional labor costs required for housekeeping outside of the traditional daily checkout time.

 

In closing, this analysis is intended to serve as a primer for evaluating short-term accommodations. This is not an exhaustive list of recent startups in this space, it’s simply a framework for evaluating differentiated inventory.

If you’re a founder working on a travel-related company, say hi! I’d love to learn more about what you’re building.

Follow me on Twitter: @briannekimmel



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Hi friends,

It’s been a busy month as I continue to explore the new building blocks for consumer technology, which I call “the unbundling of cool.”

I’ve asked dozens of founders working on social apps, gaming and other consumer tech: When do you build vs. use an API or Platform as a Service? What technology do we need to make online feel more IRL?

Based on these conversations, I have a few updates:

  • Why I invested in Voxeet, the best API for live video
  • How I killed the phrase “I’m not curing cancer”
  • New CEO office hours: Summer School 

Why I invested in Voxeet, the best API for live video.

In 2018, I believe many of our best moments will happen online.

With real-time video calling, we’re connecting with friends and family in a more meaningful way. We’re celebrating holidays, reconnecting with old friends and creating new memories from our phone.

And even though the experience is getting better, it still doesn’t compare to IRL. There’s distracting background noise, garbled noise and cross-talk.

What if we could add “same room” technology to make every video call feel real? With Voxeet, developers can bring IRL quality video to any website, app or hardware integration.

Voxeet’s TrueVoice™ 3D audio and video technology provides a true surround sound experience and removes distractions like background noise.

With Voxeet’s API library, widgets and UX toolkit developers can easily add real-time communication such as live broadcasting, video calling and messaging to websites, applications and hardware integrations on iOS, Android and all web browsers.

I’m excited to join a great group of investors:
Jason Lemkin (SaaStr), John Kim (CEO, Sendbird), Nicolas Dessaigne (CEO, Algolia), Bill McGlashan (Founder, TPG Growth)

P.S. If you’re an investor, please reply if you would like to receive my weekly update on companies. 

How I killed the phrase “I’m not curing cancer” 

When my dad was a kid, he was diagnosed with leukemia. He dropped out of school, my grandmother quit her job and they moved across the country so he could get treatment at St. Jude.

My dad can tell you a million stories about his experience, but most are related to the board games he played, snacks he ate and friends he made. When you’re sick, you need distractions to keep your spirits up. My dad frequently says he wished he had video games.

Fast forward to early 90s. Due to years of cancer treatment, my dad needs a heart transplant. We waited a long time for a heart and ultimately my dad gets on the list for an artificial heart at UPMC. As a kid, I spent an entire summer in Pittsburgh.

The entire experience was scary. I sat for hours in waiting rooms and my only distraction was video games. I made friends with kids who were in a similar position to my dad. We played Mario for hours and as a result, I believe in video games, silly apps, etc.

As a founder, you may never know the impact you have on the lives of individual users. There is so much more to life than curing cancer. Anything that makes someone smile & feel better about their current situation is worth building.

Follow me: @briannekimmel 

Sign up for CEO office hours: Summer School️

Want to practice your pitch, get product feedback & growth advice? Sign up for Summer School.

Keep building & stay cool! 😎
Brianne 



You’re not curing cancer (and that’s okay).

I recently had a very heartfelt conversation with a founder who is working on a new gaming company. As we were going through the pitch he said, “I’m not curing cancer.” This is a common lie that we tell ourselves. So I told him my story:

When my dad was a kid, he was diagnosed with leukemia. He dropped out of school, my grandmother quit her job and they moved across the country so he could get treatment at St. Jude.

My dad can tell you a million stories about his experience, but most are related to the board games he played, snacks he ate and friends he made. When you’re sick, you need distractions to keep your spirits up. My dad frequently says he wished he had video games.

Fast forward to early 90s. Due to years of cancer treatment, my dad needs a heart transplant. We waited a long time for a heart and ultimately my dad gets on the list for an artificial heart at UPMC. As a kid, I spent an entire summer in Pittsburgh.

The entire experience was scary. I sat for hours in waiting rooms and my only distraction was video games. I made friends with kids who were in a similar position to my dad. We played Mario for hours and as a result, I believe in video games, silly apps, etc.

As a founder, you may never know the impact you have on the lives of individual users. There is so much more to life than curing cancer. Anything that makes someone smile & feel better about their current situation is worth building.

This originally appeared on Twitter. Please follow @briannekimmel for more updates.



Why I invested in Voxeet, the best API for live video.

Why I invested in Voxeet, the best API for live video.

In 2018, I believe many of our best moments will happen online.

With real-time video calling, we’re connecting with friends and family in a more meaningful way. We’re celebrating holidays, reconnecting with old friends and creating new memories from our phone.

And even though the experience is getting better, it still doesn’t compare to IRL. There’s distracting background noise, garbled noise and crosstalk (🤐).

What if we could add “same room” technology to make every video call feel real?

With Voxeet, developers can bring IRL quality video to any website, app or hardware integration.

Voxeet’s TrueVoice™ 3D audio and video technology provides a true surround sound experience and removes distractions like background noise.

With Voxeet’s API library, widgets and UX toolkit developers can easily add real-time communication such as live broadcasting, video calling and messaging to websites, applications and hardware integrations on iOS, Android and all web browsers.

I’m excited to join a great group of investors: Jason Lemkin & SaaStr Fund, John Kim (CEO of Sendbird), Nicolas Dessaigne (CEO of Algolia), Bill McGlashan the founder of TPG Growth, the Webex co-founder, an early investor of Skype and the CEO and CTO of Nexmo.

In the coming months, we’ll be focused on building the developer platform and community. I’d love to connect with founders working on APIs, PaaS, Dev Tools and CTOs working on consumer mobile and video applications.

Connect with me on Twitter: @briannekimmel

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Here’s why perfectionism is killing our progress

Perfectionism is killing our progress. I’ve talked to 4 women this week who are “thinking about starting something,” but afraid to get an MVP live.

Here are some thoughts:   

If you have an early idea, but need help with an MVP: Y Combinator Leap, Dreamers//Doers and Women in Product are safe spaces to share ideas and get feedback from top product leaders and engineers.

Don’t overthink the MVP: Keep costs low. AWS, Hubspot, Zendesk all offer free tools and support for startups. For non-technical founders: Alyssa Ravasio built Hipcamp after learning how to code at a short dev bootcamp. Hackathons like Spectra and AthenaHacks are another way to get a low-cost MVP live.

Keep in mind: Other people are here to help. I’ve found this to be particularly true in SaaS.

In today’s environment, every SaaS company needs a partner integration strategy. Get your MVP live and get feedback from partnerships folks at other SaaS companies.

If you’re thinking about starting something (especially in SaaS), I want to hear from you.

Write me on Twitter: @briannekimmel