Recently, short-term rentals have dramatically increased their growth rate, partly because of the work of sites like Airbnb that actually were pioneers. However, the entrance of new players to the market, as it matures, is an indicator that there are alternatives to the Airbnb traditional model. One of these is Sonder, a tech that incorporates the Airbnb-style living in a different and inventive way with full- service hotels. This article will aim at discovering what differentiates Sonder and Airbnb, not only in terms of their business models, but also customer experiences, market positioning, and what lies ahead for the short-term rental sector.
Business Models: Traditional Peer-to-Peer vs. Managed Properties
Airbnb: The Trusted Peer-to-Peer Spirit
The story of short-term rentals is all about Airbnb, which made it possible for the homeowner as well as the renter to temporarily assign their rooms, homes or couches to travelers. Airbnb was founded in 2008 and operates on the peer-to-peer model, linking hosts to guests directly. Each time a host extends a property for rent, Airbnb collects a service fee (around 3% on average) along with a guest's fee determined by a 14% to a 20% decrease of the total booking amount.
Apart from being the platform of choice for frugal backpackers who want to hitch a ride with unique sleepovers like treehouses or yurts and staying at private homes and apartments, Airbnb is also the bearer of multiparadigm models. The flexibility attitude that Airbnb is promoting is the most significant asset for the company numbering among its successes yet this very success is attended with certain complications, e.g. the most properties listing fail to provide quality control. As a remedy to this, the joiners are made to partner with the HostStarter property management companies that most of the hosts usually involve.
Sonder's The Managed Hospitality Model
Sonder, which started in 2014, is quite different as it rents, designs, and manages all of the properties directly. Instead of the recognized individual units, Sonder places are linked to the assortments of hospitality brands, and the company is also responsible for the all-in gym program. What sets them apart from Airbnb is that, while the latter allows private hosts to manage their own listings, the former takes full handling of the whole guest experience chain, which involves check-in to housekeeping. The vertical integration of the company is what allows them to provide the guest experience which is a one-off outside of an Airbnb stay.
Sonder has a similar conceptual model to Airbnb, which is to lease properties from real estate developers, usually in downtown areas, to short-term rental and make them newly renovated. The difference lies in the fact that this approach enables the company to have greater control over its offerings' quality and consistency, although it also incurs higher operational costs compared to the asset-light model of Airbnb.
Customer Experiences: Consistency vs. Variety
Airbnb: A Wide Array of Experiences
An attraction that has brought many visitors to Airbnb is listings that offer a variety of accommodations type. The range of options includes rent-shared rooms in local homes as well as extravagant villas in remote areas. This wide selection gives guests the opportunity to choose a place that suits their tastes and budgets. For instance, they can find accommodation in a residential area or decide to stay in an atypical place.
But this very option could be a cause of lacks in the quality and amenities of the specific house. Airbnb has started some moves like introducing Superhost and guest reviews to reorganize the quality of the services and the website has been decentralized in nature all the time. For instance, some guests have enjoyed the stay in a house belonging to the locals as a personal touch, while some of them have found problems like no one cleaning the house, malfunctioning amenities, or an unresponsive host. The platform has been implementing various innovations such as granting Superhosts and opening guest reviews to confront these problems, but its decentralized model, as such, has limited its capacity to ensure a certain degree of consistency in the experiences.
Sonder: Constant Quality and Hotel Services
Sonder has a product that represents the quality and reliability of a hotel but the guests feel like they are in their own home only. All accommodations under the company's umbrella bear the hallmark of professional design and maintenance, and that is why the company can guarantee a uniform quality throughout the portfolio. The amenities in every unit include ultra-fast Wi-Fi, upscale toiletries, and 24/7 customer service just to mention a few, which are all found in hotels.
The app-based check-in procedures at Sonder, combined with the keyless entry systems, also play a part in the overall experience of the guest being seamless. This predictive power and efficiency largely affect the customer who gives the traveling on business a high priority especially in long stays.
Market Positioning: Airbnb's Size vs. Sonder's Niche
Airbnb: The Giant and The Battlefield
Airbnb's strength lies in its sheer size. The company, with its more than 6 million active listings in over 220 countries, has already established itself as the sundry name in short-term rental markets. The platform's broad roof and rich palette of accommodation choices also allow it to market to all customer segments from the budget travelers to the luxury ones.
The competitive edge that Airbnb's brand name and its established position in the market bring is quite considerable yet such a scale of operations has its limitations too. The company has crossed myriad regulatory hurdles in various locations, which has resulted in it not being completely effective in running its operations as it is due to the platform's negative impact on the housing market plus the neighborhood ones as well. Besides that, the problem of quality is another issue in the area of dependency on hosts individual, which varies from the guest perspective.
Sonder: A Pinpoint, High-End Offer
However, Sonder, in spite of their small size, is nevertheless pushing back into the market targeted in part by end consumers who want and expect the luxury and services of a hotel as well as space and convenience of a home. The hubs with higher numbers of residents are typically specialized areas of interest for Sonder such as business individuals, families, and digital nomads who seek accommodation in.
Though the product mix of Sonder may be fewer than the one offered by their competitor Airbnb, yet over the years they have made significant progress. Now they have hundreds of properties across North America, Europe, and the Middle East. The strategic plan for value accretion from the partnership between Sonder and the real estate developers who will convert apartment complexes into rental units which lease to Sonder, thus, the inventory of units increases for the company while the experience of the customer remains controlled.
The Short-term Rental Market in the Future
The future progress of the short-term rental market is bright due to the competition between Airbnb and Sonder which will drive the evolution of the industry. The peer-to-peer model from Airbnb offers travelers unequaled choice and scale; hence, the platform is the premier choice of travelers looking for unique and affordable sleeping options. Conversely, the other side of the coin is that the list of regulatory issues bears the signs of the company's problems concerning control of the quality.
Nevertheless, Sonder, through the managed hospitality model, provides a choice to travelers who value reliability and comfort in a uniform and trustworthy experience throughout.
The short scale of Sonder's niche position might be a problem, but the dedication to quality and their variety of products have enabled them to stand out in the marketplace.
Regulatory and Industry Trends
Both players suffer from problems as different cities are imposing stricter short-term rental rules. The conflict caused by extra headcount was addressed by a multifaceted approach in terms of Airbnb, in the cities such as New York, Paris, and Barcelona, with rules and regulations based on the housing affordability of the locals and other issues in the neighborhoods. Sonder, on the other hand, has been able to reach the same objectives that way since their model is centralized, more flexible to configurations, and less bureaucratic.
Furthermore, the polemics surrounding the issue of how far break fee will remain are most likely to lead the companies in divergent directions. The increased regulation of tourism and rental is likely to provide both challenges and opportunities for individual firms.
Technological Innovation and Customer Experience
The focus on technological change will probably be the path to a new future for rental markets. The two companies have both created technologies that will make customer process easier from the check-ins from Airbnb and digital concierge from Sonder to Sonder's app-based access. The tech innovation is going to be the major driving force for both the acquisition of business and its maintenance.
As a matter of fact, the pandemic has led to the acquisition of such technologies in express mode, and companies did well to provide a safe shelter for the guests by the quick flexes. With cleaned up protocols and opening up with the best cancellation plans, Airbnb has advanced, while Sonder's entry-keyless and app-based services have wired together with a contactless perception.
Final Remarks
The overall war between Airbnb and Sonder should be seen as a symbol of threats and trends in the short-term rental tane. The rental marketplace has been updated with a new player, Sonder, who explicitly identifies with quality i.e., reliable and clean accommodation, etc., whereas the other side is ground with the scale and variety at the Airbnb level that has made them the dominant player. Certainly, the market will change and both companies too who will have to adapt to new customer needs, regulations, and technology and their success depends on it.
In the final analysis, either it will be an Airbnb or a Sonder that will tend to the request that will only be driven by the preferences of the traveler like the local, different experience enhanced by the Airbnb or the permanent, hotel-like services on the Sonder. In the process, the great short-term rental industries will, in the end, have an indelible impact on the travel and hospitality sector.