These Beautiful Boutique Hotels That Can Compete With Airbnb Travel
This is one of the most controversial questions for road warriors: hotel or Airbnb? Don’t worry about your answer. Thanks to a new hybrid concept that is taking the hospitality world by storm, it is possible to get the best of both worlds. Meet the charming aparthotel. It’s half apartment, half hotel, but 100% ready for your Instagram feed.
This type of accommodation is generally reminiscent of the ultra-generic, budget extended stay hotel characterized by Homewood Suites or Residence Inn or sterile corporate accommodation. But that’s not it: Boutique apartment hotels cater to project-based travelers who typically book shorter stays at stylish establishments like Hoxton or Soho House.
In properties like this, you’ll get three times the square footage, functional kitchenettes and comfortable living spaces, plus contemporary design, all for the same T&E-approved price as a mid-range hotel. or an Airbnb down the street.
If Airbnb is the biggest threat to most hoteliers – because of its value, perceived authenticity, and scale – apartment owners say otherwise. “Airbnb is the best thing that can happen to us,” says Eric Jafari, who introduced the concept to the UK with his fledgling brand, Locke. Larry Korman, president of American aparthotel brand AKA agrees. “Airbnb opened up this idea that there could be advantages to a residence over a bedroom,” he says.
“Travelers like flexibility,” Korman adds. And investors too. In February, Locke, barely 16 months into its existence and only two hotels to its name, was bought by Brookfield Capital for a purchase price of £ 430million ($ 565million), including real estate assets. and a pipeline. Jafari estimates the company will be worth up to $ 2.5 billion by 2023.
“Over time, large hotel companies will look to this opportunity,” says Steve Kent, professor of commerce at Molloy College in Rockville Center, NY, and founder of the Goldman Sachs hotel investment group. “It is aligned with the interests of consumers and developers, and [hotel operators] are very quick to evolve and embrace what these two constituents desire. “
Compete with Airbnb
“The reality of an Airbnb rarely reflects the images [of the listings]Jafari says of Locke. “There is no gymnasium. Blackout blinds are zero. You show up at 10 a.m. and can’t check in until 3 p.m., but there is nowhere to leave your luggage.
And yet, he says, the apartment hotel industry is seriously under-represented, even in big cities like London. He said that when he started developing his concept in 2010, “you could have quadrupled the number of long-stay hotels and still be under-supplied.”
Fast forward to October 2016, when its inaugural hotel, Leman Locke, opened in east London. Customers could leave their luggage at the receptionist while housekeeping finished packing their Scandinavian-style “Locke Dream Beds” and shiny white kitchenettes. In the lobby, they could plug in laptops and sip coffee at the on-site Hyde Cafe or join the hotel’s 5K Running Club.
For AKA Korman, consistency, privacy and security are the keys to surpassing Airbnb. Its hotels are located in cities from New York to Los Angeles and Washington and cater to the creative class, whether traveling on business or not. “The film and entertainment industry has attracted us since the early 2000s because it wanted a space to bring people back to watching the dailies, as well as privacy and anonymity,” he explains to About the first users of the company. “I’m saying angels are in the details, and that’s where Airbnb has its Achilles heel,” he jokes.
Customers of aparthotels range from families temporarily displaced by a health emergency to those going through separation or renovating their homes. At AKA, they also include Tina Fey and the cast from her Broadway show, who remained in Washington property while working on the Mean Girls transition from film to stage. They have hosted child actors for Disney and Netflix, as well as a handful of basketball players in West Hollywood.
The premise is gaining popularity. The most recent report by hotel data analytics firm STR, released in July 2016, showed that 46.5% of Airbnb customers booked “long-term stays” of seven nights or more. And while only 9% of hotel bookings in the United States were attributed to extended stay brands, those hotels grew 5% over the same period.
Designed for nomads of the world
Jo Layton is the Managing Director of Apartment Service, an alliance of apartment hotel brands that also acts as a reservation agency for 1 million serviced apartments. On a recent call from her head office in Wimbledon, London, she told Bloomberg that the industry has traditionally focused on the B2B market. Historically, 95% of its site’s inventory was exclusively bookable through a special portal for travel managers and corporate agents, which largely serve Fortune 500 companies with multi-month projects and relocation needs. .
Now, she says, apartment hotels are designed for shorter stays of five to 28 nights. “It’s longer than a typical hotel stay but just outside the window of corporate accommodation.” They are also bookable online, just like normal hotels.
Shai Zelering, managing director of hospitality at Brookfield Capital, attributes this to the emergence of the digital nomad. Speaking to Bloomberg from his Washington office, he cites a McKinsey study showing that the global workforce will be 75% millennial within eight years and that 71% of those young employees expect global assignments during their careers. “Companies are starting to view international experiences as an essential part of career and talent development,” he adds.
“Much of the hospitality industry talks about millennials,” adds Locke’s Jafari, “but our demographics are tied by the fact that they are city dwellers, not by their age. Millennial or not, these nomads around the world share the desire to make their own protein smoothies for breakfast and stream Netflix before bed. Room service? Concierge? Coverage service? They can go out the window.
Industry-wide Zelering of Brookfield says, “Hotels have 20-40% margins. Apartment hotels are higher – probably 50-60% margins.
Overhead and labor aren’t the only cost savings. Residential neighborhoods make real estate cheaper. And Professor de Molloy Kent adds that “everything from smaller check-in areas, less conference and meeting space, and restaurants that can be rented contributes to profitability.” Add in multi-week bookings that keep occupancy rates close to 100%, and it’s clear why investors are biting.
Where to find them
Locke Hotels’ pipeline includes 22 projects over the next few years, including locations in Dublin, Paris and Berlin. “The intention is to cover all major European cities and bring the company to $ 2 or $ 2.5 billion [in valuation] – then we’ll look at the US and Australasian markets, ”Jafari explains.
AKA, meanwhile, intends to grow from 12 to 36 properties over the next five years, covering Paris, Rome, Austin, Miami, Chicago and even “cool cities” like Prague and San Sebastian.
Other competitors are multiplying. In Amsterdam, the first Zoku hotel opened with 133 loft-style rooms with modular furniture. Wilde, a design-focused subsidiary of the UK’s largest aparthotel operator, launched in March; his first property is in London, with another soon to be in Edinburgh. Clearly, WeWork has jumped into space with its residency-focused spin-off, WeLive, now in New York and Washington. And Native, a company acquired by Starwood Capital in 2015, now has 15 apartment hotels scattered across London, with upcoming locations in Glasgow and Manchester.
“Locke will never reach Airbnb’s $ 31 billion valuation,” says Zelering of Brookfield. “But that’s not the intention.” The intention, he says, is to meet the very real needs of a whole new segment of the traveler population, before someone else gets ahead of the company.
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