We manage Londoners' homes when they go away, earning them money & giving guests an authentic experience
Business overview
| Location | London, United Kingdom |
|---|---|
| Social media | |
| Website | www.underthedoormat.com |
| Sectors | Property Mixed Digital/Non-Digital Mixed B2B/B2C |
| Company number | 08968561 |
| Incorporation date | 31 Mar 2014 |
Idea
Introduction
UnderTheDoormat manages properties and guest stays in the fast-growing (31% per year) sharing economy accommodation sector.
Our guests get a unique way to experience London – to live like a local in the comfort of an authentic London home while enjoying the professionalism, quality and amenities of a hotel. We offer guests more space than they would get in a typical 4 star hotel for a similar price - and all in the comfort of a home. So far we've already welcomed over 630 guests from 38 countries.
Homeowners get a secure and hassle-free way to earn money from their property when they’re away and return to their beloved home just the way they left it (or even a little nicer).
In our last quarter bookings have risen by 211% on top of the previous quarter. Our aim is to have 800 homes in London by June 2018.
Intended impact
UnderTheDoormat reaches homeowners and guests who would otherwise not consider letting their home out when away or staying in a home when visiting London.
Almost two-thirds (64%) of central Londoners would consider letting out their home while away - yet they need support to do this. People with nice homes are too busy to do it all themselves and when they are away they need a trusted company to take care of their home for them and give them peace of mind.
Our model provides freedom for our homeowners: to earn extra income without lifting a finger and to travel, live elsewhere or visit family and friends while the income from their stay helps pay for the trip and helps cover the mortgage.
Our approach also meets the needs of discerning guests who need a guaranteed professional experience: business travellers, families who want the freedom of a home with the assurance everything they need is provided, and visitors from abroad who want peace of mind. These guests will only stay in a home if the whole process is seamless, secure and professional.
We aim to be a leading brand in the managed accommodation sector of the sharing economy. Since our founding we've generated over £100,000 of revenue* while building our systems and processes and proving our business model.
We are expanding the market for accommodation in the sharing economy because we are one of the few companies who:
- provide professional cleans before and after every stay
- provide hotel-quality linens and towels for all guests
- have bespoke insurance for all guest stays (though we’ve never had to claim)
- Offer guests the quality of a 5* hotel with the authenticity of staying in a real home
- Enable homeowners to go away while letting their home out with the peace of mind that they will return to a freshly-cleaned home and some extra money in their bank account
With more than 600,000 homes in London empty for more than four weeks per year there is huge potential to open up the market.
*source: unaudited management accounts
Substantial accomplishments to date
Our achievements since we began in summer 2014 include:
- Over £200,000 booking values in 2015.
- Quarterly growth of 211% (bookings) and 33% (homeowners) in the last 3 months
- 40 homes in our portfolio, covering central London (zones 1 and 2) and out to zone 4 in South West London
- Hosted over 600 guests from more than 38 countries, with the USA our number one market for visitors
- Average rating of 4.5/5 stars from our guests
- Bespoke global insurance policy with XL Catlin that covers all guest stays - something that as far as we're aware very few other companies have
Built the partnerships and supply chain to:
- Consistently prepare homes for a high-quality hotel experience and return them to their homeowners as they left them
- ensure a high quality stay for guests, including 24x7 concierge service
Built an Advisory Board bringing significant experience and a team of 8 who are able to expand our operations
Monetisation strategy
We offer homeowners a fixed amount per night for any bookings and the fees to cover our service are included within the price our guests pay. The more bookings we take, the more money both we and our homeowners make.
As the assets are owned by homeowners we don’t need high capital expenditure to grow, ensuring our prices are competitive and our costs are relatively low.
Most of our costs (including cleaning, linens and homeowner income) are variable, so we can make a positive gross margin on all transactions. This protects us against seasonal swings in demand and any potential drop-off in visitors to London
Key business metrics for 2016:
7 - average number of nights per stay
£1,246- average guest spend with UnderTheDoormat
Our model ensures homeowners have the flexibility to use their home whenever they would like, and the opportunity to earn income while they are away. This freedom combined with our full service management provides a simple, transparent and hassle-free model which is attractive to the asset owners who we will build long term partnerships with.
Use of proceeds
We plan to use the money raised in four ways to accelerate our growth:
1. Property acquisition: aim to gain 260 new homes through direct marketing to homeowners and an additional 500 through industry partnerships by 2018, we believe thereby setting a solid foundation for further growth
2. Guest marketing: drive guests to our site and aim to double direct bookings over the next 18 months with a goal of being a recognized consumer brand and the first choice site for our target market
3. Customer experience team growth: increase the service level to guests with the goal of increasing repeat guests by 150%
4. Homeowner retention: ensure high service-levels to homeowners as our portfolio grows and maintain our 80% retention rate
The Company currently has a £20,000 interest free director loan. None of the funds raised will be used to pay this loan.
Market
Target market
As we connect with both homeowners and guests we have two key target markets.
Among homeowners, our target market are those who will only let their homes out if it is managed by a trustworthy professional company. In particular these are:
• Busy professionals who travel a lot
• Retirees who want to make more of their home but aren’t keen on handling everything themselves
• Families who don’t have the time or energy to let out their home when they’re away on holiday
• People with a second home in London who only want to use it occasionally throughout the year
Among guests our primary market are those who will only stay in homes in London if it is managed by a trusted, professional company. These include:
• Business travellers who want a guaranteed quality of experience as well as health and safety considerations in place
• Families who want the assurance that everything they need is provided
• Visitors from abroad who want the peace of mind everything will be as they hoped
Characteristics of target market
The sharing economy is predicted to grow from $15bn in 2013 to $335bn in 2025. The accommodation sector within this is projected to grow at 31% CAGR over this period.
The sector is divided into 3 segments:
Platforms: Websites matching homeowners with guests but which do not own or manage the assets & provide limited services.
Service Providers: Companies that offer support services to hosts (e.g. key drop off, cleaning) but the homeowner still oversees the process.
Fully Managed Service Providers: Companies such as UnderTheDoormat and OneFineStay who fully manage the entire guest experience and the home while the homeowner is away.
The market is currently dominated by platforms such as Airbnb (estimated revenues $675m in 2015 from booking value of $6.1bn).
OneFineStay, which focuses on the luxury segment of the managed home sector and was founded in London in 2009, was recently bought out by Accor for $170m.
Marketing strategy
We believe that there remains a major untapped market for managed accommodation beyond the most exclusive properties, and this is the part of the market we are focused on.
With two target markets (homeowners and guests) we have distinct strategies for homeowner (property) acquisition and guest marketing:
Property acquisition:
B2B
We are working with a number of companies from the following industry partners who recommend our services to homeowners:
- Estate agents
- Property management companies
- Relocation agents
- Interior designers
- Charities
We will continue to scale up these partnerships over the coming months
B2C
We reach homeowners directly through
(1) increased marketing (direct ads, SEO) in target parts of London
(2) building networks among target homeowner groups (e.g. retiree organisations, sports clubs, ex-pat nationality groups).
Guest marketing:
We have two main channels for acquiring guests.
(1) Direct bookings through our website. We currently use small amounts of Google and Facebook Ads to drive direct bookings through our website and we intend to grow this channel.
(2) Using multiple platforms. This will always be an important way for us to reach guests, especially those searching for the first time, and it is a valuable way to increase the exposure of our properties. We currently operate across six online platforms (UnderTheDoormat, HomeAway, HouseTrip, AirBnB, TripAdvisor(FlipKey) and Booking.com).
Guest marketing through platforms is a variable cost - we only pay a fee when a guest booking is made. This makes it a relatively low cost and low risk model for us to use to scale and means we can piggy-back on the marketing spend of the platforms.
We also use incentives to encourage homeowner and guest acquisition. Right now, when someone introduces a new homeowner both they and the new homeowner receive £100 each after the first guest booking.
Competition strategy
Platforms - Channels for us, not competition
While these are the most recognized names in the accommodation sector (such as Airbnb and Booking.com) they are not direct competition for us. In fact, we use them as channels for guest acquisition.
Service Providers
These providers work directly with hosts on platforms such as Airbnb but still require major effort and involvement from the homeowner and are targeted at homes already listed by homeowners. Our advantage is that we bring new properties to the market by building long-term relationships with our homeowners who want .
Fully Managed Homes:
OneFineStay is our biggest direct competitor. They are targeted at luxury (5-star plus) homes. Our main targets are homes in the 4 to 5 star range. We provide professional services and marketing targeted to these guests and homeowners and are gaining traction in the market (our brand recognition is now close to that of OneFineStay among homeowners).
Our recent market research shows that OneFineStay has 6% brand recognition in London. UnderTheDoormat sits close by with 4% recognition with very little investment so far in marketing.
Four Star/Boutique Hotels:
We provide comparable price and quality to these hotels but with more space and access to home facilities (e.g kitchen) that aren’t available in hotels.
Given our brand recognition is not far off the market leader in a segment - and that company is focused only on luxury homes - we believe that we have the potential to expand quickly in the 4/5 star home range.
The network effect means that if we scale as intended we expect to become embedded as one of the major players. Combined with strengths such as our bespoke insurance policy, that will make it hard to new competitors to overtake us.
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