Wednesday, February 01, 2023

Jaeger vs Sonder

They've been fighting for a while over Jaeger's decision to back out of leases he'd granted them on some of his hotels.  It's worse now, though, because (according to Jaeger's new lawsuit) Sonder has also ruined the Jung. Apparently even the visionaries have difficulty predicting sometimes. 

It seemed like an ideal arrangement. At the time, Sonder New Orleans’ general manager Peter Bowen referred to Jaeger as a “visionary.”

Four years later, and after dozens of scathing online reviews, the deal has soured.

In a lawsuit filed last week, Jaeger asserts that Sonder has damaged the Jung’s reputation and value, costing him untold millions of dollars in lost revenue, by failing to address critiques on the Sonder website describing dirty guest rooms, soiled linens, stained furniture and public safety issues, including gun battles on the property.

Anyway so some of the worst people in New Orleans are fighting over the scraps of the mess they've left us again. Nothing new, there. 

And since this is a story about Sonder, we should mention also that, yes, we are aware the city council is about fail once again to effectively rein in short term rentals.  So brace yourselves to watch those rip through the neighborhoods one more time. It's the only thing that can happen anymore. Capital is like water in our gilded age town. Unbounded, it finds its own level and wipes people out in the flood.  Nothing new there, either. 

On the other hand, today's story does offer us a new insight as to the effect STRs have on hotels. 

While it’s too soon to draw conclusions about the specifics in either court case, industry analysts say the disputes illustrate the challenges that can arise when hotel owners and short-term rental operators try to marry their interests amid a changing New Orleans tourism landscape.

"This points to some of the pitfalls of these arrangements and also for the need to have stricter regulations of short-term rental operators around safety codes," said Lenny Wormser, executive vice president of HREC Investment Advisors.

The problem, Wormser said, is that platforms such as Sonder do not have the on-site staff of trained employees who can tend to guests expecting an experience similar to that of a hotel.

"Short-term rental people really do not pay attention to the guest services, the guest satisfaction as much as they should," he said. "You potentially end up with a degradation of the property and after three or four years; nobody wants to stay there."
Turns out short term rentals not only make neighborhoods shittier by turning apartments into poorly maintained hotel rooms, they also make hotels shittier by turning them into poorly maintained apartments.  Neat.

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