I’ll admit, when WanderJaunt co-founder Michael Chen told me he wanted to build a hotel chain, like the Westin, from the ground up on Airbnb, I wasn’t sure what to think. There are already dozens of property management startups for short-term rentals (Vacayo, Guesty, etc.). And besides, isn’t the commercial dominance and economic power of hotel groups half the reason people use Airbnb in the first place? But with $2 million in seed financing led by Khosla Ventures, WanderJaunt plans to do just that — build a reliable home for vetted and trusted short-term rentals around the world.
The emergence of the short-term rental market has drastically reduced the financial burden of traveling, while opening up new revenue streams for homeowners. But even with reasonable vetting, it’s hard to know whether the house you’re going to show up at for your weekend vacation is going to have that “high-speed” internet you were counting on.
This is where WanderJaunt comes into the picture. The startup struck deals with large home goods providers, like Leesa Sleep, to deliver a common experience to travelers at all WanderJaunt properties. And unlike other property management services that furnish properties, WanderJaunt is ready and willing to advertise the experience as a sort of external short-term rental verification badge.
Property owners who want to work with WanderJaunt can either negotiate a fee for the startup to take over their lease or opt for a commission model where the company retains a portion of money made from rentals. In either case, WanderJaunt takes care of furnishing homes and servicing customers.
“There’s an arbitrage opportunity between long- and short-term rentals,” Chen explained to me in an interview. “We are closing the loop on the circle that Airbnb started by allowing homeowners to take advantage of higher rents.”
Chen makes a point; there’s an entire community of Airbnb users, for example, who charge above market rates because they have a strong track record of hosting guests. And thus far, WanderJaunt is delivering on that thesis. The company’s properties have hosted 700 people to date across 200 stays with a very respectable net promoter score.[gallery ids="1522512,1522511,1522510"]
But beyond property management, the long-term play is buying properties. If the company can collect a wholesome data set to build reliable models for pricing short-term rentals, WanderJaunt can effectively re-price home values to take this additional potential value into account. This would put the company in line ideologically with startups like OpenDoor and Knock that aim to use unique data and machine learning to better price homes and rake in profit.
At first, WanderJaunt is rolling out in Phoenix and Scottsdale, Arizona. The area’s housing prices lack a lot of volatility and the market’s properties fundamentally cost less than other markets like New York City and San Francisco. As a previously bootstrapped startup, WanderJaunt has mostly been conducting outbound sales. Today’s round should give the team some breathing room to get more aggressive — though Chen tells me he aims to keep everything profitable on a unit basis. Brand-building is not to be underestimated, but the company and its team seem to know what they’re getting themselves into.