UnderTheDoormat manages premium homes and lets them to business travellers & tourists looking to stay in the comfort of a home with hotel quality and service.
In our view, current homestay services are heavily focused on the self-managed market, often through Airbnb, where homeowners manage their own home listing with varying degrees of quality and security.
We feel that there is an underserved market for guests who want the comfort of a real home as well as the service of a hotel, and for high-end homeowners who simply won’t let their home out without the experience being fully managed, insured and effortless.
The UnderTheDoormat proposition is to unlock this market for high-end homeowners & guests that Airbnb and other P2P platforms can’t by offering the quality and service of a hotel in the comfort of a home.
UnderTheDoormat is now generating over £1m in revenues annually & we are looking to take the business to the next stage in London and open in other major cities in Europe.
Despite its rapid growth, Airbnb accounted for just under 8% of the market for hospitality in London, which we consider a strong indicator of the whole homestay market.
If you are a high-value guest you may be likely to stay in a high-end hotel which provides great service, but built to be nobody’s home, or you might stay in a home without the service and professionalism you expect. Similarly, if you are a homeowner on Airbnb you can earn money from letting a spare room or the whole home – but you carry all of the hassle associated with guest stays and bear the risk if anything were to go wrong.
UnderTheDoormat was founded to overcome these barriers by providing both homeowners and guests with the service of a hotel in the comfort of a home. Their homeowners are able to monetise their asset with minimal effort and aggravation when they are away and the guests enjoy the perfect mix between home comforts and hotel service.
By offering this extra service we feel that we can create a market beyond Airbnb.
Substantial accomplishments to date
2015 - Full direct insurance policy approved.
2016 - Raised £385k in crowdfunding on Seedrs.
- CEO Merilee Karr Elected Chair of Industry body the Short-Term Accommodation Association (STAA) representing major companies like Airbnb, HomeAway and Expedia.
- Build new website as direct commercial channel.
- Exceed £1m sales since founding.
- UnderTheDoormat the first company to be accredited in the world’s-first accreditation scheme for the industry.
- One of the first few providers in the UK to partner with Expedia as it entered the home-stay sector.
- Surpass £2m in total sales, with more than £1m revenues this year.
- Surpass £100k in direct bookings on UnderTheDoormat.com.
- Surpass 25,000 room nights stayed by guests from more than 70 countries / territories.
- Sign Concierge Agreement with Quintessentially to offer full concierge service to VIP homeowners & guests
- Merilee is short-listed for the Small Business Advocate of the Year by the Small Business Awards.
Other achievements, such as agreements with major property players, are currently confidential.
Merilee has also recently agreed an UnderTheDoormat-developed Buildings Policy with Westminster Council on behalf of STAA with the aim of setting this as the standard for short-term letting across London. Programmes like these aim to give the company a strategic advantage as one of the few companies to meet the standards in the policy.
UnderTheDoormat’s business is to acquire premium homes with availability, sell premium stays and ancillary services to high-end guests, and provide both homeowners and guests with an impeccable experience.
We optimise the pricing of a home using our dynamic pricing model. This considers seasonality, demand in the area, special events, and the amount of time left before the available nights. This price shaping enables the business to maximise margin and occupancy for each home throughout the year.
UnderTheDoormat have flexible staff allocated to each guest arrival which assures a quality experience for both parties. Core functional services like laundry/cleaning are outsourced with key partners who meet UnderTheDoormat’s standards. This enables us to keep costs in line with demand, ensuring bookings are operationally profitable.
As we own the customer experience, we are able to generate additional revenue streams.
Use of proceeds
We've reached a critical stage in London having secured major distribution partnerships & a very robust operational model.
The challenge now is to make a significant investment in growing the rate of home acquisition and further improving our quality service so we can own the luxury-in-a-home space.
Our use of funds in London has three major elements.
1. Home acquisition. Accelerate home acquisition through direct-to-consumer marketing campaigns and partnerships with major B2B property companies.
2. Broaden the guest base and significantly increase direct guest acquisition by building UnderTheDoormat.com into a destination booking website and continuing to build out high-value direct booking channels such as travel management companies.
3. Improve the hospitality experience for homeowners and guests even further to fully own the premium space, keep home retention and guest reviews very high, increase referrals and grow the transaction for increased direct bookings.
The share price for this round has been calculated as a rounded figure based on a pre-money fully diluted valuation of £5m. The pre-money valuation displayed in this campaign includes a further £229,000 raised by way of an ASA which will convert on completion of this round, and is not being reflected in the progress bar.
Despite its rapid growth, and the potential to be a multi billion industry in London, airbnb are currently only ~8% of total visitor stays, which we feel is a good indication of the majority of the current market size. One of the limiters on the market is that we believe P2P platforms cannot provide the quality of home or service that is required to meet the needs and desires of high-value homeowners and guests.
In our view, there is an underserved market for high-end guests who want the comfort of a real home as well as the service of a hotel, and for high-end homeowners who simply won’t let their home out without the experience being fully managed, insured and effortless.
We believe these customer segments are looking for brands who can provide the service and peace of mind they desire. The UnderTheDoormat proposition is to unlock this market for high-end homeowners and guests that Airbnb and other P2P platforms can’t by offering the quality and service of a 4 or 5 star hotel in the comfort of a home.
Characteristics of target market
The London hotel market is currently worth £6bn a year and forecasts suggest that the home accommodation sector could rival this with a size of £4.5bn.
There are c.175,000 homes in central London which fall into our target market – 14% of London’s housing stock. Less than 2% of London’s stock is currently engaged in the short-stay sector.
Morgan Stanley predicts the private accommodations market we are in could be as big as $106 billion in 2018, which would account for approximately 19 percent of the $555-billion global accommodation market.
As the market grows, the professionally managed premium segment is the most attractive segment. Airbnb, Booking.com and Expedia are all investing in capturing increasingly high-end guests who are looking for a professional experience in the homestay market.
We have agreements in place with each of these platforms to reach these customers with our full-service offer which the platforms cannot deliver on their own.
We have built our current portfolio of 200 homes through organic acquisition, homeowner referrals, B2C marketing, and B2B partnerships with estate agents & property players.
Our range of successful marketing campaigns include.
- Above the line marketing such as on London Underground.
- Direct marketing e.g. leaflets & events.
- Digital marketing campaigns.
We also have several partnerships already agreed or under discussion with major property players which have their own portfolios in London and are seeking to increase yields through short-term letting partnerships. Unlocking strategic partnerships like this will provide significant portfolio growth.
We have a multi-platform strategy for acquiring guests and list across all major platforms including Expedia, Airbnb, Booking.com, Trip Advisor HomeAway, and UnderTheDoormat.
In addition to online channels, we receive bookings through direct bookings and referrals from film location companies, relocation companies & estate agents.
In our view, there are three segments in the home-stay market:
1. Platform Peer-to-Peer (P2P): Major platforms like Airbnb, Expedia and Booking.com. We see these as channels to market for individuals, hotels & professional home-stay providers.
2. Airbnb Service Providers. Spin-off support-service companies which provide basic services such as linens, cleanings, and check-ins. They deliver a task *to a homeowner* who is Airbnb-ing their home. They don't offer a guest brand or a customer experience & you can't book a home on their website.
3. Branded Home Accommodation: The gap in the home accommodation market where high-end guests and homeowners want a consistent, high-quality experience with a brand they know & trust. The most high-value segment of the market by booking value.
There is a significant opportunity for growth and with a focus on premium homes, UnderTheDoormat can reach, monetise and own the most lucrative segment of the market that platforms & service providers cannot.