The new CEO of Trivago says travelers want the coziness of an Airbnb but the predictability of a hotel, and it's creating a new type of company

sonder apartmentA Sonder apartment in Washington, DC.Sonder/Facebook

  • Travelers today want the coziness and personality of an Airbnb but the predictability of a hotel, according to Axel Hefer, the new CEO of Trivago.
  • This desire is creating a new type of hybrid company like Sonder, Lyric, and Blueground, which offer apartment-style rentals in properties they lease and manage.
  • Hefer says these new companies are the next big thing in the travel industry because they combine the best parts of Airbnbs and hotels.
  • They also fulfill travelers' desire for predictability, he said.
  • Visit Business Insider's homepage for more stories.

Travelers today don't want to stay in hotels that look the same in every city and have no personality. But nor do they want the inconveniences that can crop up in an Airbnb, like a lockbox not opening when you're trying to check in or not being able to reach the owner when there's an issue.

According to Axel Hefer, the new CEO of global accommodations search platform Trivago, travelers today want accommodations that offer them the best parts of each: the personality and coziness of an Airbnb and the predictability of a hotel.

"There is a high demand for high quality apartments that are comparable to hotels," but these are difficult to find, Hefer recently told Business Insider.

But according to Hefer, a new type of hybrid company is emerging to fill this hole in the market. He points to Sonder, a startup that offers apartment-style hotel rentals in properties they lease. Sonder, which has a total valuation upwards of $1 billion and has Airbnb's former CFO, Laurence Tosi, as a board member, has at least 8,500 rentable spaces in 23 cities, including New York City, Washington DC, San Francisco, New Orleans, Nashville, Austin, Denver, Chicago, and Miami. It's also expanded internationally to London, Dubai, and Dublin.

New companies like Sonder claim to offer apartment rentals with the coziness of someone's home, but without the hassle

On Sonder's website, founders Francis Davidson and Lucas Pellan said they started Sonder after asking themselves one simple question: "What if there was a place as reliable as a hotel, but with all the warmth and character of a home?"

In contrast to Airbnb, which is mainly made up of individual owners listing their own homes and apartments, Sonder leases, designs, furnishes, and maintains its apartments. Sonder says it offers the "consistency and service of a great hotel" but "in a space that feels more like a home."

sonder apartmentA Sonder apartment in New Orleans.Sonder/Facebook

Sonder's model makes people's stays more standardized and predictable, according to Hefer.

"You've got 20 people staying there every night, so the data's much more reliable and the stay is much more predictable from the user perspective," Hefer said. "Which doesn't mean that everybody wants to have a very predictable experience. A lot of people want to have something crazy and something unique, but the average person wants to want to know what he's getting."

Staying in someone's home can be an unpredictable experience - and that's not what most travelers want, according to Hefer

"The problem with apartments is that it is very difficult to predict what exactly you will get," Hefer said. "The host might not show up and you stand there in front of the apartment and can't get in."

Airbnb listings have guest reviews, of course, but they're much less reliable than at a hotel where hundreds of people are staying in the same accommodations every night, he said.

But staying in a hotel often isn't necessarily what travelers want, either. For Hefer, for example, staying in hotels while he's traveling with his family isn't convenient because he has four kids. He finds it makes much more sense to stay in an apartment with separate rooms, living areas, and a kitchen where you can cook if you don't feel like going out.

As hybrid companies like Sonder keep growing, even Airbnb is moving toward hotels

Sonder is not alone in combining professionally managed apartment-style rentals with hotel-like accommodations. Its competitors include Lyric, which raised $80 million in venture capital this year, and Blueground, which raised $50 million.

Lyric PhillyOne of Lyric's Philadelphia units.Lyric

Even while companies like Sonder emerge with the aim of making apartment rentals more like a hotel, Airbnb itself is moving toward hotels. Airbnb has started allowing users to book hotels, and bought HotelTonight earlier this year. In August, it announced it was buying Urbandoor, a listing site for furnished apartments geared toward professionals.

In press materials, Sonder insists that it's not an Airbnb competitor: "When you stay with us, you're never staying in someone else's home. We are not an Airbnb competitor. Airbnb is a partner and one of several online travel sites guests use to book stays."

We'll be seeing a lot more from companies like Sonder in the future, according to Hefer.

"There is more transparency and also more data behind it," he said of their business model. "I do think we'll see more of that."

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