Does the internet need another vacation rental website? Tansler seems to think so, going live today with a new service which claims it has developed a "transparent marketplace" for both users and owners.
In stealth mode for just over a year, Tansler operates a reverse auction-type model where users submit a "binding offer" for multiple properties in a location.
Once the owner accepts the offer, Tansler connects the two parties and the trip takes place.
Simple, right?
Q&A with CEO Jeremy Barnard:
1. Tell us how you founded the company, why and what made you decide to jump in and create the business?
The idea came to me five years ago. I had been booking vacation rental homes for several years -- and the process was always very inefficient.
That's when the idea came up to let price drive the transaction -- and eventually what made me decide to create the business.
2. Size of the team, names of founders, management roles and key personnel?
Nine staff, including:
- CEO and founder - Jeremy Bernard
- Chief product officer - Louie Cale
- Chief technology officer - Jet Banas
- Non-executive chairman - Ken Hamlet
3. Funding arrangements?$800,000 seed round led by strategic private investors.
4. Estimation of market size?
- $85 billion in vacation rental revenues for 2010, and Vacation Home Rentals reports 13.1% market growth in 2011 (Radius Global Market Research).
- Most vacation homes are empty right now. This unused lodging capacity is significant, about 7.6 billion room nights per year, especially when compared to the hotel industry’s 6.0 billion annual room nights (Andrew Bates, Trusted Guests).
- The consumer peer-to-peer rental market will become a $26 billion sector and the sharing economy, in total, is a $110 billion-plus market (Rachel Botsman co-author of What's Mine Is Yours: The Rise of Collaborative Consumption).
- 70% of all vacation home purchasers intend to rent to other vacationers (National Assoc of Realtors).
- "Vacation rental" Google searches year over year growth (Google): 2010 – 15%, 2011 – 18%, 2012 – 26%.
5. Competition?Airbnb, HomeAway, VRBO and Flipkey.
6. Revenue model and strategy for profitability?
It's free for owners to list a property on Tansler. Once a booking is completed, owners pay a service fee of 3% and renters pay a service fee of 6%.
7. What problem does the business solve?
There are a lot of pain points on both side of the renter-owner equation. Renters don't have leverage and both renters and owners are spending too much time trying to rent out their properties.
And too often, their properties are going unrented.
8. How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
Since forming the company in September of last year, there have not been any major pivots. I originally had the idea for Tansler about five years ago when booking a vacation rental and the concept has stayed largely in tact.
At the time, I was the partner and principal investor in a number of real estate projects in NYC and Las Vegas and the more I looked into the market, the more I saw in the market confirmed that there was a need for a platform for rentals where price drives transactions forward. Given all the innovation in this space recently, it was the right time to be launching this unique concept.
9. Why should people or companies use the business?
Renters having more leverage and save time and money booking rentals. Owners can get more deals done, rent out their property more frequently and spend less time doing it.
10. What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
This includes social media marketing initiatives that we'll be rolling out on Facebook, LinkedIn, Twitter and Pinterest, including paid targeted media buys on those channels targeting our customer base.
To get in front of owners, we will also be partnering with various strategic industry related organizations including the VRMA (Vacation Rental Managers Association).
11. Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
I see Tansler having a global presence in thousands of cities -- renters and owners coming to us as one of the leading places to list and book vacation or short-term rentals.
Since Tansler is part of the share economy, we will also have to address some of the issues our colleagues have had to deal with -- educating individuals as well as lawmakers about the proposition will be of high importance.
12. What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
The centuries-old rental model is ripe for disruption. Whether you rented a property online today on Airbnb or Homeaway or offline a hundred years ago, you negotiated through a series of one-to-one closed discussions, leaving other renters in the dark and wasting time by requiring duplicate private conversations (and often not resulting in deals).
Tansler’s platform is unique and we believe solves this problem by eliminating inefficiencies of that model with a transparent marketplace where everyone has the same information, and supply and demand determine price and drive transactions forward.
13. What other technology company would you consider yourselves most closely aligned to in terms of culture and style... and why?
We aspire to be like Zappos because our #1 priority is to perfect the customer experience of booking a rental.
Tnooz view:
Auction models have come and gone in the travel sector with varying degrees of frequency and success, so it will obviously be interesting where Tansler's path takes it.
The challenge the startup has in these early days are two-fold: brand recognition and users, both on the supply and demand side. A number of major US cities, for example, do not have any properties listed as yet (although there is a rather tongue-in-cheek message for one or two locations).
Luckily, Tansler - as some have tried in the past - will not rely solely on the usual suspects of social media channels to get the message out and will be using capital or revenue to go the old fashioned route: media buying.
The other issue it will have to address is the continued confusion and (increasingly) legal shenanigans affecting the likes of Airbnb as it also looks to move into popular markets such as New York City.
Circumventing or adhering to civic laws to expand the business could either be a risk it is willing to take or a financial hurdle it must overcome.
Either way, as Airbnb is discovering, having a popular and trendy website is no match for the harsh reality of running a business in multiple jurisdictions.
NB: Here is Tansler's six-second Vine (click mute button image to start):