Outdoor patio at the first Life House in the Little Havana neighborhood of Miami
between about US $ 150 and US $ 190 for hotels with smaller guest rooms and efficiently-designed but still roomy communal spaces . The first property opened in December in Miami ’ s Little Havana neighborhood and South Miami Beach is set to follow . The fledging group , founded by Zeidan , who has operations and real estate experience with the likes of Starwood Capital and the Sydell Group , and software entrepreneur Yury Yakubchyk , plans to open 20 hotels initially and has its sights set on 200 hotels inside five years .
Life House has 10 signed contracts under construction , from Denver to Los Angeles and Nantucket , Rhodes Island , to Brooklyn , New York . Its focus on smaller properties allows them to do several properties in the same market , therefore increasing opportunities to scale .
Mostly , Zeidan says , the group has focused on easy conversions . “ Almost all of our hotels except for Denver and Brooklyn have been existing , operating hotels that really just need cosmetic uplifts ,” Zeidan says .
ACQUISITION MODEL Its secret sauce is a proprietary technology platform , which provides guests with a frictionless direct booking journey , a mobile app and an opt-in social network . Most importantly , the group has developed what it believes is a customer acquisition model that keeps distribution costs down . On the direct booking side , which already accounts for 55 % of the business at the first hotel in Miami , costs stand at 9 %, and Zeidan expects that to go down with time and experience .
The distribution model focuses on meta-search and Google channels . “ If you buy keywords for Miami hotels , for example , you ' re paying US $ 5 a click , and you ' re getting a ton of eyeballs , but you ' re going to probably lose your shirt because the clicks are too expensive ,” Zeidan explains . “ It ' s about creating the analytics to figure out not only what keywords to buy , but on what dates to buy them and what audiences to buy them from . That ' s ever changing , and it ' s very dynamic . Technology powers that .”
Marketing dollars initially are focused on high-intent clicks , and Zeidan says many of those dollars are currently going to Google ’ s new Hotel Finder , which has a lower cost per click . “ We integrated directly onto Google ' s Hotel Finder , which shows us at the top of the official site , and that ' s been where a lot of our traffic is coming from .”
Zeidan is even willing to go as far as to predict that Google will take over from OTAs . “ People who know how to use Google effectively can compete with the OTAs ,” he says . “ Google ' s incentivized to drive business and keep cost-per-clicks down so that they can compete against the OTAs because if the cost is too high operators will just list on the OTAs .”
Life House leadership has also developed an in-house digital marketing team , and that team requires technology to track its guests and users . “ If somebody looks at our website and clicks onto dates and searches a specific date range , that ' s a higher-intent user than somebody who just scrolls down the page and then leaves ,” Zeidan says . “ They ' re re-targeted with different campaigns afterward . It ' s really about , ‘ how do we micro-target ?’ That will increase our conversion and therefore reduce our marketing costs . If we don ' t micro-target , then we might as well just sell on OTAs like everybody else .”
In addition to the back-end technology , the booking experience is comforting to potential guests as it operates similarly to other direct-to-consumer brands .
STYLE
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