Skift Take
It’s an alarming caution from one of the sector’s most experienced founders and investors– but just don’t talk about patterns up until 2023, HomeAway’s Carl Shepherd made a point to include.
Matthew Parsons, Skift
The co-founder of HomeAway has likened the current spate of unique purpose acquisition companies– or SPACs– to the build-up seen right before the dot com bubble burst in 2001.
Given that the pandemic, numerous so-called “blank check companies” have been formed and there’s appetite for travel companies, in particular in the short-term rental area. But “the SPAC game has gotten crowded,” Carl Shepherd said.
Accor this week was also reported to be the current company to dive into merger market.
“A lot in the pipeline will probably draw back,” he added, speaking at the Skift Live Short-Term Rental and Outdoor Summit. “There’s hundreds of billions bound going after unicorns. They’re called that for a factor. With that much money going after so few opportunities, you recognize it may not be the very best time.”
Carl Shepherd talking at Skift Live. Image: Skift The financier was talking minutes after Sonder’s founder Francis Davidson discussed his business’s plans, following its deal with Gores’ SPAC that valued the business at $2.2 billion.
Shepherd stated that for Sonder, “the ideal things took place at the beginning of the year” for the urban-focused brand name.
“It’s standing alone in the market, and its service model is too positioned to be successful as it’s ever been,” he included. “However there’s never ever been a two billion-valued corporate travel business. I’m interested to see how Francis takes it forward. The appraisal’s extremely rich, it almost feels like I’m back in 2001 before the first dotcom bust, when pets.com got valued at billions of dollars.”
Throughout another session at the Top, Sonder CEO Francis Davidson declared that Sonder’s service is 80 percent leisure travel.
Shepherd has a viewpoint, being a board member of the Moose Pond Acquisition Corp. SPAC, which was co-founded by RetailMeNot founder Cotter Cunningham and HomeAway co-founder Brian Sharples.
It’s No Longer Alternative
Speaking throughout the “Acquisitions and Investments in Short-Term Rentals: Predictions for 2021” panel, he also noted that throughout the pandemic, short-term rental accommodation must no longer be classified as “alternative lodging” because it ended up being the preferred accommodation– “and hotels had much better figure that out.”
He likewise contacted vacation-friendly locations, such as Florida and San Diego, to reduce their regulatory burdens on house owners wishing to rent their homes. “Prosecute that and establish we can do it, then you can have cities start to manage it more appropriately,” he cautioned.
Online travel bureau operating in the vacation rental space also needed to “stop looking the other way” on this, he added, otherwise growth will be suppressed.
Yet in spite of the quick growth in the short-term rental sector over the previous year, Shepherd stated he hesitated to pinpoint trends up until 2022 lagged us.
“When there’s not a pandemic, how many moms and dads actually do want to invest 2 weeks with three kids in a RV? I believe we’ll find that out,” he said.
CORRECTION: This article has actually been updated to clarify Sonder has said its company is 80 percent leisure travel. It also previously mentioned Shepherd formed Moose Pond Acquisition Corp.
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