Hospitality startup Sonder raised $170 million at a $1.3 billion valuation during the Covid-19 travel collapse
Previously focused on jet-set millennials traveling for fun or business, in February, Davidson quickly shifted his marketing to target people displaced by the virus. Sonder offers deep discounts for longer bookings—say 40% off for two-week stays. The demand for temporary housing has come from college students shut out of dorms, workers looking for better work-from-home set-ups, and families in between moves.
Sonder's product is suited for social distancing. Its rooms are in residential buildings, away from busy hotel entrances, staff, and other guests. Thanks to its app and digital door locks, users check into rooms without any in-person interactions. And as Covid has quashed once-attractive hotel perks like room service, spas, gyms, and lounges, Sonder properties offer critical quarantine amenities: most have large living spaces, kitchens, washer/dryers, and reliable wifi.
Making guests feel comfortable and safe is crucial."Extreme cleanliness is table stakes right now," says Davison. Many Sonder locations now offer hand sanitizing stations and in-room health kits. Other Covid changes include listing outdoor activities like hikes to the Sonder concierge app, a delivery partnership with Postmates, and deals with nearby garages as most guests now travel to Sonder's via car.
After hunkering down through the worst of the corona-recession, Davidson is now focused on growth. Sonder is now flush with cash just as the urban real estate market goes on sale."We've survived the crisis, are one of the only players left standing, and many people in the real estate industry are hurting," says Davidson,"It's now an even more attractive environment to grow the company and be a hospitality disruptor.
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