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The success of Airbnb has opened the door to a variety of alternative accommodations. Some are innovative start-ups that blur the lines between hotel, serviced apartment, student /senior accommodation and short-rental business models. Here we take a look at three companies in the space.
WhyHotel
WhyHotel operates temporary hotels out of newly-constructed luxury apartment buildings that are typically vacant for up to two years before finding buyers.
Fresh perspectives that uncover hidden value are typical of the alternative accommodation space, said John Burns, president, Hospitality Technology Consulting: “WhyHotel has seized on a business opportunity that the rest of us have overlooked; something everyone else has disregarded for decades.”
Such ideas, however, would be hard to realise without modern technology. In addition to developing its own software, WhyHotel works with Apaleo, a tech startup also breaking the mould.
Apaleo’s founder Stephan Wiesener said: “WhyHotel represent a new category of hospitality companies that are actually tech companies. They have their own developers, some of whom previously worked with Google. They are venture capital-funded and so they behave and think like a tech startup, very agile, very modern, very fast.”
Instead of a conventional PMS based set-up, WhyHotel uses Apaleo’s open API for the basics – reservations, rates, policies, accounting, payments - then picks additional applications like RMS and CRM from Apaleo’s app store. Anything else, they build themselves.
The basic IT architecture can be copied and pasted from one hotel to a new opening, Wiesener added, a process which takes around 30 minutes. Subscription-based IT costs go up and down with the inventory.
The Student Hotel
Alternative accommodations have demonstrated their comparative resilience during the pandemic and succeeded in attracting significant investment. Charlie MacGregor, the founder of The Student Hotel (TSH), had the idea of combining student accommodation with hotel amenities after wondering why student residences tended to be dull and dreary places.
The TSH portfolio of 15 properties achieved an average 51 percent occupancy for the 2020/21 academic year and recently secured €300 million from its principle investors (Aermont and Dutch pension fund APG) to expand. MacGregor said: “Thanks to our hybrid operating model, we were able to quickly increase our room allocation towards students at a moment when leisure and corporate travel disappeared.”
TSH is very big on maximising the use of its premises and making sure that its facilities can serve different people’s needs at varying times. For example, managers noted that workspace areas were busy between 10am and 5pm whereas the study spaces for students were occupied in the late afternoon and evenings. It made no sense to have two separate areas so they have now been combined into one.
TSH needed a flexible operations management system to deal with its multi-use approach and they chose Mews for two key reasons.
“First, their system allows us to put in every type of product and service, from a physical room to a workspace to consumable products,” explained Mark Liversidge, TSH’s chief digital, technology & experience officer.
“Second, their system is predicated on a customer profile being created which becomes a lifelong profile. For us, this is critical because, depending on what product we sell first we have people connecting with us as students, travellers and locals coming for dinner, but we want them all to use our different services at different times and throughout their lives,” he continued.
Following Airbnb’s lead, alternative accommodations see themselves as ecommerce platforms with a strong emphasis on the shopping experience and in-depth information about their properties and destinations.
TSH started a tech overhaul in 2019 with the deployment of a middleware logic layer, developed with Ireckonu, that standardised infrastructure and connectivity across the estate.
The group then revamped its customer-facing tech. React JS, whose clients include Airbnb and Netflix, built the new website, combined with an Episerver content management solution that provides commerce, multi-channel marketing, and predictive analytics.
“We want to start to create individualised prompts for people and we’re really excited about where we could get with, for example, digital nomads: ‘We know people like you want to go to the Med in the summer so why not try our property in Porto? And how about Vienna for the winter, which is handy for the Alps,’” explained Liversidge.
Sonder
With talk of becoming the next-generation Marriott and plans to go public, Sonder’s ambitions are of a different order. The group leases and manages more than 5,000 apartments around the world, claiming to combine the best elements of a hotel stay with a private-home stay.
Sonder developed its own technology and the user experience happens exclusively through its app, highlighting once again an ecommerce approach. Sonder’s chief technology officer Satyen Pandya said: “We're focused on accelerating the development of our proprietary technology and continuing to improve our core guest experience. We are also considering partnership integrations so that guests, for example, can have groceries ready for them in their unit when they arrive - and features like the ability to adjust the temperature to their ideal setting before they step foot in the door.”
Outside of the US, the majority of Sonder properties are hotels, with the company announcing its first hotel in Paris this month (October 2021). In the long-term, Payden said that the group was focusing on making Sonder technology available in white-label formats to independent hotel and accommodation operators.
Sonder’s tech has enabled the company to scale rapidly and reduce costs, said Pandya: “By leveraging technology across nearly all areas of operations, including supply growth, demand generation, building openings and day-to-day operations - and of course, the guest-experience - we’re able to reduce operating costs by as much as 50 percent versus traditional hotels,” he claimed.
The tech-empowered success of alternative accommodations has made investors stand up and take notice. There are lessons for hoteliers – particularly around the guest experience and information-rich online content – although some of the major brands have been relatively slow to recognise them.
Given the staffing crisis, one thing all hospitality businesses will be looking at is the possible merging of job roles and a fresh look at management structures. At The Student Hotel, Liversidge is unusual in being responsible for technology but coming from a marketing background. Traditional roles in sales and marketing, technology, finance and operations are now up for a re-think, he reckoned.
“The majority of your customer engagement is now done through technology so who should be leading that? It needs to be a blend of sales and marketing and tech personnel,” he said.