The Disruptors: Sonder brings tech-enabled hospitality to Canada

The company offers premium experiences for guests in the short-term rental market.


By the time he turned 21, McGill University student Francis Davidson had launched Sonder, a fast-growing “tech-enabled hospitality company,” and was managing rentable units across 11 cities, earning more than $1 million in revenue within the first three years.

Now, after having moved its headquarters to the U.S. in 2016, the San Francisco-based Sonder plans to expand its Canadian operations, adding a second headquarter here and a few hundred apartment-style rental units in major urban centres come 2020.

The company has so far raked in US$200 million in revenue this year  though it won’t say how much comes from Canada  and is expected to surpass US$400 million by the end of 2019, roughly four times what it made last year. Earlier this month, it announced an additional US$225 million in fundraising, pushing its market cap to the enviable US$1 billion mark.

While Sonder has spent most of its marketing to date on attracting real estate partners through B2B activities, this is the year “we start building this iconic consumer brand,” says Arthur Chang, senior director of expansion at Sonder and a Vancouver native. Consumer marketing is currently the remit of Shruti Challa, VP of revenue, but the company says it’s currently scaling its real estate and consumer marketing teams. Early branding and marketing has been handled by agency Creech, while Sonder’s own UX team continues to work on the “website, app, lifecycle email and in-unit collateral, ensuring a consistent, on-brand experience,” according to the company.

According to Chang, Sonder has started dialing up its social activity as part of its brand marketing efforts. “We realize the importance in defining what our core promise is and having a consistent message.”

Earlier this year, it debuted a “It’s a Sonder” campaign on Hulu, Facebook and Instagram to help showcase the Sonder experience. The brand’s modern, never-duplicated design aesthetic is captured in posts featuring guests sipping on tea and cosying up to a book in bed, or items meticulously placed in brightly-lit open spaces. Part of the company’s appeal lies in offering customers highly crafted experiences, while maintaining a degree of consistency when it comes to other aspects, such as service and quality beds that may be less predictable through Airbnb.

As a short-term apartment rental business, the firm is often compared to Airbnb. But the comparison is not entirely just, according to Chang, as the latter functions as a marketplace connecting guests to anyone wanting to list a property. Sonder, meanwhile, controls supply by signing master leases with developers, taking over entire buildings (or sections of them, depending on city by-laws) and then renting out units on a short-term basis with hotel-like amenities and consistency of service, Chang says.

For those reasons, he equates the Sonder-Airbnb rivalry comparison as that of eBay versus Amazon as two entirely different beasts, with Sonder being more like the latter in its attempt to control all aspects of the business and customer experience. For example, to help scale the company and keep onboarding costs low, Sonder has built its own furniture company and supply chain to more quickly and efficiently furnish its apartments, Chang says.

It has also made tech a focus of its business model, a move Chang feels helps it differentiate from competitors, among them Domio (a tech platform offering apartment hotel accommodations to group travelers) and Lyric (an Airbnb-backed startup that manages apartment complexes and rents outs units on various platforms). Behind the scenes at Sonder, housekeepers are asked to download a company app that prompts them to take pictures of rooms as they clean, enabling a supervisor to quality-check as they go. The app also informs Sonder guest services staff where they need to pick flowers for guests or drop off shampoo or towels, for example, helping to optimize efficiency, according to Chang.

“We’re really trying to rethink hospitality from the ground up,” he says. “We question why there needs to be a bellman that takes your luggage to your room, and whether guests actually need 24-hour room service in a world where there are instant meal-delivery apps.”


Sonder currently lists its spaces on multiple sites, including Expedia,, HomeAway  and yes, Airbnb. But today, approximately 20% of its bookings are made directly through Sonder’s website, which has become a fast-growing bookings channel, according to Chang.

It currently operates in 18 cities across North America, including New Orleans, Rome, Chicago and London. Sonder’s only Canadian city so far is Montreal, but it will open 75 units in downtown Toronto this year and has leased an additional 102 units which it plans to open in Vancouver early next year. It hopes to eventually extend operations to Calgary, Victoria, Ottawa and other neighbouring cities.

Chang believes the market opportunity for Sonder is “pretty enormous,” based on the fact that there are currently close to 100,000 hotel rooms across Toronto, Montreal and Vancouver. In his hometown of Vancouver, there are roughly 10,000 hotel rooms in the downtown core, 20,000 city-wide. “Even if Sonder were only to take a small percentage of that, we’re talking hundreds or thousands of units.”

But as it continues to expand, it may face pressure from locals and policy makers concerned about the impact of short-term rentals on competitive housing markets. Last month, a report by Fairbnb, a Canadian group advocating for “fair rules for short-term rentals” found that home-sharing platforms have removed some 6,500 homes from the Toronto market. Others have estimated the number to be as high as 31,000 units across Canada’s three largest cities.

This may be an issue for Sonder, whose “ideal execution” involves taking over entire buildings so it can control the entire guest experience, according to Chang.

To avoid putting undue pressure on overheated housing markets, he says the company works closely with landlords and city regulators to “make sure what we do is fully within the codes.” And in markets where housing is an issue, it works with builders on adding affordable units into its operations. “At the end of the day, it’s about working with governments to make sure we are doing good instead of being a problem to the housing supply.”