The so-called sharing economy, particularly sites like AirBnB, has opened up a whole new way for travellers to stay in and experience cities.
While some travellers are looking for new experience and might be willing to put up with some inconveniences if it means saving money on accommodations. But for other travellers, the lack of consistency on short-term accommodation marketplaces is a problem.
Montreal-based Flatbook wants to change that. The startup, which graduated from the FounderFuel accelerator in early December, wants to be the first hospitality brand of the sharing economy – promising a higher level of service, quality and consistency at the apartments it rents through AirBnB and HomeAway.
Lucas Pellan, Flatbook’s COO, says the startup is trying to offer the “best of both worlds.” While a Flatbook apartment is cheaper and more authentic than a hotel, unlike renting from an individual, the startup aims to be reliable and consistent – like a hotel brand.
“You know what to expect,” Pellan says. His goal is to “step up the game overall of the sharing economy and apartment rentals … we want to get in the apartment and say ‘wow.’”
And that means offering some services that go beyond what’s normally offered in an apartment rental. Things like free coffee; a iPhone in every apartment, so that customers don’t spend a fortune on roaming; to ordering groceries in advance so that they’re “waiting for you when you get in,” he says.
Pellan says it’s all about breaking down the “user experience of a hotel or an apartment” and thinking about what sets a good hotel brand apart – and how his team can replicate that experience.
But with the extra services, there’s an extra cost. Pellan says Flatbook rentals range in price from $95 a night, for a basement apartment in Montreal, to $800 for a three-bedroom in London, England.
On average, he says a Flatbook apartment in Montreal rents for $160 a night, while in New York the average is $350 a night.
He says the company’s target market is couples 35 to 45 and families with kids who “used to rent two or three hotel rooms.”
For those customers, who might be more wary of staying in an individual’s apartment, a Flatbook apartment is still a big savings.
With the rapid growth of first-time users on short-term apartment rental sites, Pellan says there’s lot of opportunity. Flatbook says it hosted 5,000 guests in 11 cities last summer, making $1 million in revenue.
Increasingly, Flatbook is moving into the property management business. The company originally source the apartments it rents by offering a subletting service to students.
“So many international students leave for the summer,” Pellan says. “But there aren’t enough people coming” who want a four-month lease.
Instead, students who were leaving for the summer could hand their keys over to Flatbook, who would promise to pay their rent while they away. The company could charge more for short-term rentals, pocketing the profits.
But with AirBnB’s user base growing faster than the number of apartments on the site, Flatbook is increasingly working directly with landlords, Pellan says. Instead of subletting from students, they’re now starting to sublet to students.
“We rent them out for eight or nine month leases,” Pellan says, during the winter low season, where there just isn’t as much tourist demand.
Students who sublet from Flatbook pay a little extra for the furnishings but no additional rent over what the the landlord charges.
“Our business really is on the summer side,” Pellan says.
Right now, Flatbook is in expansion mode. The startup is “hiring about 50 people in 25 cities,” Pellan says.
It’s also in the process of raising a $2 million seed round.
“It’s coming along,” Pellan says.