Sonder, the digital short term rental company, is looking more and more like a boutique hotel operator. The Canada-born firm (now San Francisco based) has announced further expansion into Vancouver, with plans to build out a 66-room “boutique” hotel in the old Coast Plaza Hotel in downtown Vancouver’s West End neighborhood.
The Vancouver market is experiencing a shortage of traditional hotels to accommodate a growing number of visitors. At the same time, the city has a housing affordability challenge which means more regulation on Airbnb-style single unit rentals. City officials and developers are looking toward mixed-use models and tech to find a middle ground.
In a market like Vancouver where space is at a premium, allocating space for a lobby and back-of-house operations in prime neighborhoods (as will traditional hotels) makes less sense, according to Sonder spokesperson Mason Harrison. Guests use the Sonder app and other third-party apps for room service. This minimizes costs and - in theory - lowers daily rate while increasing inventory.
The model also offers more flexibility to locate short-term inventory in neighborhoods where new hotel construction is prohibitive.
Sonder has moved away from operating single Airbnb-type units and more toward multi-unit operations that take over a floor or two or three in commercial buildings that comply with city regulations. “Hyatt can’t make an eight-unit hotel work, but a tech-enabled hotel can do that”, said Harrison, in a recent interview.
Ground-level floors will be retail below Sonder’s 66-unit apart-hotel. Top floors of the old hotel will be retrofitted into 316 rental apartment suites. The old Coast Plaza Hotel retrofit will be Sonder’s second hotel-type development in Vancouver.
In March of this year, Sonder announced plans to open up a boutique hotel in the Arts & Crafts Building in downtown Vancouver. The ground level floor of the property will go towards restaurant space. The company is planning for 33 units targeting the extended stay market with an average length of ten days.
As part of its city PR initiative, Sonder is making furniture donations to non-market housing spaces in Vancouver and other cities aimed at singles, low-income earners, seniors, and people with disabilities.
Sonder, previously Flatbook, has roughly 4,500 rooms in 22 cities and has raised over US$400 million to keep growing. The Vancouver building serves as the new model for further expansion.
“Our vision is to build the future of hospitality and we continually strive to introduce our guests to a city’s unique heritage and best kept secrets,” said Emma Cahalane, Sonder Vancouver’s general manager, in a statement.