AUSTIN, TX—The Guild, a hospitality start-up focused on delivering the ideal guest experience for modern business and leisure travelers, has secured $25 million. The funds will be used to launch new markets and develop technology that will enhance the travel experience and allow guests to personalize their stays. Venture firms Maveron, Convivialite Ventures, ATX Venture Partners and Adam Zeplain’s Mark VC participated in the round, as well as real estate partners RXR Realty, Corigin, Nicol Investment Group and the Holiday Inn founding family Kemmons Wilson. This follows its $8.5 million Series A, which was led by Maveron in late 2018.
“Chris [Herndon] and Brian [Carrico] are building The Guild into a beloved hospitality brand, with best-in-class online ratings, customer retention and direct booking rates,” said Jason Stoffer, partner, Maveron. “The Guild’s high underwriting standards and operational strength have driven impeccably strong unit economics and high capital efficiency at a time when competitors have focused on growth at all costs.”
The Guild partners with developers of Class A apartment and office properties to convert full floors into hotel suites. These partnerships are increasingly structured as asset-light management agreements where the property manager funds the capital requirements and participates in the long-term financial upside. This strategy contrasts with competing start-ups that focus on more capital-intensive master lease agreements, which can create risk through long-term lease exposure.
“We’ve evaluated every major player in the space and chose to partner with The Guild in a nationwide partnership,” said Ken Veltri, EVP of asset management, AMLI. “They are committed to delivering an exceptional experience for their guests as well as our properties’ residents and staff. We are delighted to be partnering with The Guild at AMLI properties in Austin, Dallas and Denver and expect to expand the partnership into additional markets over the next two years.”
While its competitors in the alternative accommodation space garnered attention in 2019 for nine-figure venture rounds at increasingly high valuations amid rapid global expansion plans, The Guild is pursuing a more deliberate strategy focused on remaining the leader in guest experience, particularly for business travelers, to better position it for long-term success, according to the company.
“Great hospitality brands are defined by the quality of their guest experience and loyalty of their guests, rather than the number of locations,” said Chip Conley, an investor and advisor to The Guild, founder of Joie de Vivre and former global head of strategy and hospitality for Airbnb. “Relative to other start-ups in this emerging category, many of whom prioritize growth above all else, The Guild has an intimate understanding of its guests and is obsessed with all those personalized details that make the experience delightful.”
The Guild was founded in 2016 by boutique hotel developer Brian Carrico and tech marketplace founder Chris Herndon. The Austin, TX-based founders have leveraged their complementary backgrounds to develop a unique guest experience that bridges the digital and physical world.
“As recovering road warriors who used to stay in chain hotels over 50 nights per year, we’ve experienced firsthand how business travel can deplete the soul,” said Carrico and Herndon. “We started The Guild so that travelers could maintain the cherished routines of home while immersing themselves in the surrounding local community. These new funds will enable us to extend The Guild experience to a broader community of business travelers in search of a better life on the road.”
The Guild works with Fortune 1000 firms to negotiate a fixed nightly rate and become a preferred partner, enabling employees to easily book a room through their corporate travel agency or booking platform. The Guild has become a particularly compelling solution for project-based corporate travel where employees make weekly trips to the same destination for the duration of a project, typically months, according to the company.
“Staying with The Guild gives a true sense of home away from home for my road warrior teams,” said Sunny Xi, management consultant, Oliver Wyman. “For the price of a standard room at a chain hotel, we get suites larger and better appointed than many of our team members’ own apartments. With ample working space and a full kitchen, my teams collaborate better, eat better, and sleep better than at traditional hotels. We leave our luggage each weekend and return on Monday with clothes dry-cleaned and the fridge stocked. It’s no wonder so many team members are wishing for more Guild locations for their next travel project.”
Considering there are more than 70 hotel brands with a market value in excess of $1 billion, institutional investors forecast multiple winners in the fast-growing alternative accommodation category, of which Airbnb is the most prominent. With its emphasis on guest experience, business travelers and financial discipline, The Guild seeks to avoid the well-documented pitfalls of hyper-growth start-ups such as WeWork and Uber. Instead, The Guild will utilize its $25 million in funding to further its strategy and play a larger role in shaping the future of hospitality.
To date, The Guild has raised $38 million from strategic investors, employs more than 170 people and has a portfolio of 800 units across six U.S. markets.
