Why Sonder—a boutique hotel chain that operates like Airbnb—is a growing threat to the hospitality industry

“Early on, we thought: How do we deconstruct the services and operations of a hotel, and [rebuild] them in the age of mobile phones?” says Francis Davidson, founder and CEO of the short-term apartment-rental company Sonder. Combining Airbnb-like rooms with the consistency of a stylish boutique-hotel chain, Sonder has knit together a network of more than 2,000 rentals in 18 cities across North America and Europe over the past seven years. This year, it plans to open another 2,000 as it moves into new cities. The key to its growth: The San Francisco–based Sonder contracts with property developers to lease entire floors in their buildings. It saves money by doing away with amenities like front desks (its app assigns each guest a room-access code) and by outsourcing maintenance and housekeeping services. Today, Sonder’s properties have an occupancy rate of nearly 80% (the average for U.S. hotels is roughly 65%) and take in about $57,000 per unit, per year.