Entrepreneurs: UnderTheDoormat - the win-win home rental business for homeowners and travellers
It was an enjoyable breakfast of simit — a Turkish bagel — and honey at a colleague’s home in Istanbul that gave American Merilee Karr the idea for her property start-up, UnderTheDoormat.
Zipping around the world, looking after thousands of petrol stations for oil company Royal Dutch Shell, she made so many trips to the historic city that the hotel bills were racking up, and her friend said: “Why don’t you just stay at my house?”
So she did, had a fantastic time, and the seed of the business was sown. Why not offer work and leisure travellers fed up with boxy hotel rooms the chance to live in a proper home in the cities they visit, and homeowners an opportunity to make some money?
The name, dreamed up on a stroll down the King’s Road, aims to catch a friendlier, more informal vibe.
Karr didn’t even have her own passport until she was 18, but has now been to about 70 countries for work and pleasure.
She doesn’t come from an entrepreneurial background — her father was a lawyer and her mother a charity worker. But it was always going to be when, rather than if, she started her own business. Despite a 13-year career with a major blue-chip, she says she was “always a bit of a misfit” and the one they turned to for “out-of-the-box” ideas.
When she weighed up the choice between 30 years of fighting within a big corporate or setting up on her own, there was only one decision.
Karr, also a member of the Government’s task force on the sharing economy, bristles slightly at comparisons of her business with the giant Airbnb rental marketplace. She’s selling experiences and a professional service, down to full insurance and someone coming in once a week to change the towels and linen.
“Airbnb is absolutely the best choice if somebody wants to rent out their room and the person who’s renting it out is the best person to manage it,” she says. “The DIY approach is an absolutely fantastic approach.”
But she adds: “We’re in the market that says we want to work with you as a homeowner to maximise the value of your home, and we want to take care of everything, from the insurance to the marketing, to managing the guests while they are there as you are out of the country.
“We’re not looking to be cheaper, we’re looking to make a better offer. Typically, families find that it’s cheaper than renting several rooms in a hotel. It’ll be a little cheaper as a business traveller. But we’re not competing on price, we’re competing on experience.”
UnderTheDoormat has more than 50 properties on its books, and that will soon rise to 60 in locations from the centre of London out to Zone 4.
A small-scale studio in fashionable Marylebone might rent out for between £89 and £109 a night, with the homeowner collecting between £50 and £60 of that.
The business has just completed a crowdfunding round to raise more than £385,000, leaving Karr owning about 80% of the business. The plan is to move into major cities worldwide.
“We aren’t looking to replicate Airbnb and be in every little corner of the earth — you do it in cities where you have got that scale, like Amsterdam, Copenhagen, Dubai. You have to have the supply of homes where people are travelling frequently.”
If that works out, the plan is to sell out to a hotel group. “Most of the growth is coming from our part of the sector,” she says. “Between now and 2025-30, hotels are basically going to be stagnant in terms of growth.”
If she does sell, 5% of the profits will go to charities, as she has signed the Founders Pledge. She is also working with five charities to link up with homeowners who want to donate the proceeds from their temporary guests.
Karr didn’t vote for Brexit but she sees how it could work in the business’s favour, and has seen a “positive impact” so far. Tourism numbers are up and suddenly people are having to pay more for their holidays when they go abroad, and pondering how to make money out of their empty homes.
“Ultimately, a lot of people are waking up to the fact that they have idle assets sitting around,” she concludes. And her guests know exactly where to leave the key on the way out...