Skift Take
Laurence Tosi and Allen Mask both have skin in the game when it comes to the potential customers of Airbnb and Sonder. Are they minimizing Airbnb’s obstacles, and Sonder’s breakout potential?
Dennis Schaal, Skift
There will be Airbnb and Sonder– and everyone else.
To hear Laurence Tosi of WestCap Group and investment partner Allen Mask of CoLab Group inform it, the emerging dynamic in the short-term rental market won’t be winner-take-all situations, however will see dominant players such as Airbnb and Sonder emerging in their particular sectors, and a fragmented group of weakened rivals filling in the remainder of the leadership.
Speaking about Airbnb at the Skift Short-Term Rental and Outdoor Top Wednesday, Tosi, creator and handling partner of Westcap Group, said that in 2019 it ended up being clear that Airbnb was ending up being a dominant marketplace, which rivals were compromising, and their market share was ending up being fragmented.
Also with Sonder, which plays in the quasi-hotel and short-term rental space and is slated to go public in a blank-check-company merger, it became clear that there was a “distinction in between the leader and everybody else,” Tosi said.
Both Airbnb and Sonder were breaking away from the pack, an advancement that sped up during the pandemic, Tosi argued.
Skift Research senior expert Seth Borko, interviewed Tosi and investment partner Allen Mask, managing partner at Colab, which is a WestCap affiliate, at the Skift online summit on the subject, “Where Do Short-Term Rentals Go From Here.”
WestCap is a financier in both Airbnb and Sonder, and both Tosi and Allen are Airbnb alums. Tosi was Airbnb chief monetary officer, and Mask was head of international product marketing.
Obviously, it must be pointed out, there are hardly ever winner-take-all dynamics in the travel market, which generally has 2 to 3 dominant companies in each sector.
While Tosi’s theory about Airbnb’s dominance could end up being reality, in 2020 and early 2021, Vrbo, which has fewer than one third of Airbnb’s listings, for instance, has actually made market share gains, at least in the U.S., and Airbnb has actually faced a lot of obstacles.
For its part, Sonder benefitted from numerous of its competitors, including Lyric, Stay Alfred, and Domio, ending up being pandemic casualties or winding down, and brand-new rivals might definitely emerge to offer a more robust marketplace.
Not everybody is as sure as the duo about Sonder’s prospective dominance.
Speaking in an earlier Summit session, HomeAway co-founder Carl Shepherd said that for Sonder, “the best things occurred at the start of the year” for the urban-focused brand throughout the pandemic.
“It’s standing alone in the market, and its service model is as well-positioned to succeed as it’s ever been,” he added. “However there’s never been a $2 billion-valued corporate travel company. I’m interested to see how Francis (Sonder CEO Francis Davidson) takes it forward. The appraisal’s extremely abundant, it practically feels like I’m back in 2001 before the very first dotcom bust, when pets.com got valued at billions of dollars.”
Throughout another session at the Summit, Sonder CEO Francis Davidson claimed that Sonder’s business is 80 percent leisure travel.
Allen of CoLab Group anticipated there will be debt consolidation in the short-term rental sector with brand-new leaders emerging, and the marketplace will demand specialization.
The short-term rental industry in the past did a bad task of merchandising, and stock tended to be commoditized, Allen said. The pandemic, he included, gave business the chance to strike reset, to right some wrongs, and to address concerns in a different way.
Both Allen and Tosi argued that Airbnb’s future is tied to its ability to revive private hosts’ enthusiasm for the platform. That’s a vibrant that some would argue has actually subsided during the pandemic due to the fact that of Airbnb’s cancellation refund policies, and the dominance of expert managers on its platform.
Tosi said technology matters, and that Airbnb will need to continue to innovate on that front. Airbnb is slated to announce some innovation upgrades for hosts and guests next week.
Airbnb will grow “as long as they (hosts) believe in the mission,” Tosi stated.
Note: This story has actually been upgraded to include Sonder’s assertion that it is a leisure travel-oriented company, and not currently a service travel one.