Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

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Tag: vacation rentals

  • The first vacation rental REIT

    This is a fascinating interview with John Andrew Entwistle, the founder of vacation rental company Wander. The way to understand Wander is that it is a vertically integrated travel company. So unlike Airbnb, for example, Wander owns all of their real estate (vacation homes in top destinations), they property manage, they asset manage, and they are building out the technology required to connect all of this stuff.

    They have also created what they are calling the first ever vacation rental REIT, which means that you can buy a piece of their real estate portfolio (currently 13 properties). In addition to being a source of cash, this creates an interesting flywheel effect where maybe you stay in a Wander and then decide to become an investor in their REIT, or vice versa.

    Eventually though, Wander hopes to be just as asset light as Airbnb (which again, doesn’t own any real estate; they’re a booking platform). The idea is that REIT unit holders will ultimately own the real estate and they will be the asset manager / technology platform that sits on top. But that they will still control the entire travel experience.

    John also gets into some of the specifics of how they run their business. For example, in each destination, they hire local cleaning crews and handy people (who are not Wander employees). They typically spend about 7% of the value of a property to furnish it (which is typically around $80-150k per property right now). And their average order size is around $4.5k, which suggests that people are willing to pay a premium for this vertically integrated travel experience.

    If you can’t see the video above, click here.

  • Design-forward vacation rentals

    What I was getting at with the above tweet is that I think there’s way more demand, for places like this and this, than there is supply. Click on the first link and you’ll see that it’s booked up all summer long. And as for the second link, I just booked one of their rentals for this summer, but I have been trying — for years — to book it in the winter.

    I think the unmet use case is as simple as this: I live in a big city, and I want to get out of the city and go somewhere cool and design-forward. There are, of course, some options. But there’s a need for a lot more. Generally speaking, it feels to me like the majority of the supply is either (1) an expensive/large cottage or (2) an old “classic luxury” kind of hotel.

    I’m specifically referring to Toronto and southern Ontario with these options, but judging by some of the responses I got to my tweet, this appears to be an opportunity in many other markets as well. But I would be curious to hear from all you in comments or on Twitter. What “local” hospitality offerings are missing in your market? Where would you like to travel to and stay, but can’t?

  • Sonder — intimate neighborhoods, consistent quality

    Airbnb has been a game changer. I know many people who have made Airbnb their full-time career or who “stay for free” when they travel because they Airbnb their home. Airbnb likes to focus on the “community” rather than on the business possibilities, but regardless, it unlocked space in a new way.

    Here’s another take on decentralized vacation rentals: Montreal-based Sonder. Similar to Airbnb, you submit your property to their platform. But unlike Airbnb, they take care of everything from reservations and guest communication to operations and housekeeping. It’s a completely hands-off approach for owners.

    The value proposition to guests is that they get a more consistent experience, but with all the “local color” of a traditional vacation rental. And for owners, they get to maximize revenue without having to be as hands-on as with an Airbnb. (Presumably Sonder’s take is greater.) In many ways, it’s like a decentralized hotel chain. Same supply source as Airbnb, but they are now unifying the customer experience.

    It’s fascinating to watch this software/internet layer developing on top of real estate. It’s giving me all sorts of ideas.