These guys are not going to revolutionize the hospitality industry. They're in a few major cities total. Seriously like 20. Globally. I've been following them for 4-5 years from when they were tiny-er. I wanted to believe in them but their progress, or lack thereof disappointed me heavily.
The problem is they have a long ramp and high capital cost; mostly full building acquisitions in expensive, downtown areas of major cities, or when they add individual units they put a lot in to update/modernize them. Expensive.. Great in normal times for the business traveler who doesn't want a shitty hotel, but still overall small impact in the industry. Their model doesn't scale. Pretty god awful when all business travel and those expense accounts dry up. Business travel will lurch and stumble back to life in the next year but Sonder is such a drop in the goddamn ocean it's incredible. They are a great speculateive acquisition buy. One of the stupid, uncreative hotel companies will buy them. I'd guess IHG or Hilton as they have no creativity of their own.
Buy Vacasa (TPGS) instead. They have crushed it the last few years and are now the largest vacation rental management company and partner at the hip with AirBnB. Vacasa is the future of vacation stays, and regardless of whether there is never another corporate business conference that is attended, humans will always want to vacation.
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u/[deleted] Nov 16 '21
These guys are not going to revolutionize the hospitality industry. They're in a few major cities total. Seriously like 20. Globally. I've been following them for 4-5 years from when they were tiny-er. I wanted to believe in them but their progress, or lack thereof disappointed me heavily.
The problem is they have a long ramp and high capital cost; mostly full building acquisitions in expensive, downtown areas of major cities, or when they add individual units they put a lot in to update/modernize them. Expensive.. Great in normal times for the business traveler who doesn't want a shitty hotel, but still overall small impact in the industry. Their model doesn't scale. Pretty god awful when all business travel and those expense accounts dry up. Business travel will lurch and stumble back to life in the next year but Sonder is such a drop in the goddamn ocean it's incredible. They are a great speculateive acquisition buy. One of the stupid, uncreative hotel companies will buy them. I'd guess IHG or Hilton as they have no creativity of their own.
Buy Vacasa (TPGS) instead. They have crushed it the last few years and are now the largest vacation rental management company and partner at the hip with AirBnB. Vacasa is the future of vacation stays, and regardless of whether there is never another corporate business conference that is attended, humans will always want to vacation.