DEALS & DEVELOPMENT
Bunk bed setup at BD Hotels ' Pod Hotels concept
SMALL FOOTPRINT ,
BIG PROFIT
From independents to major brands , hospitality companies are jumping on the micro-hotel concept . With guest rooms of less than 200 square feet — and sometimes 50 square feet — the emphasis is on technology , sleek and stylish public spaces , and more affordable rates . These hotels also provide investors with a comfortable profit margin , since the smaller room footprint means more rooms to sell .
“ We know that our segment is going to become more crowded , as more brands see the value in not defining their hotel product by room size and rather by focusing on creating an experience that offers a comfortable night ' s sleep , good connectivity and plenty of space to either work or relax outside of the room ,” says Rohan Thakkar , senior vice president of development and strategy for Yotel . The brand has seven properties open in Europe , the U . S . and Asia , and 13 hotels and nearly 3,000 rooms in the pipeline . Five under development fall under the new extended-stay YotelPad concept .
BD Hotels ’ Pod Hotels concept has five properties open in New York City and Washington , D . C ., while Amsterdam-based CitizenM has 12 micro-hotels open . BD Principal Richard Born cites some of the attractive numbers : ROIs of 12 % to 15 %; development costs of 30 % to 40 % less than traditional properties , and room rates that still sit around US $ 100 in the off-season . Guests also will continue to find the appeal of the micro-hotels in their lively public spaces , which feel more like living rooms , notes Josefin Baff , commercial officer at Belvar , the preferred Moxy hotels ’ operator in Europe . Moxy , a Marriott brand , has 23 properties in Europe and the U . S .
As for the next phase of micro-hotels : Javier Egipciaco , managing director of Arlo Hotels , which has two properties in Manhattan , says companies will drop the “ micro ” prefix . “ The movement to smaller living spaces is becoming a very viable option for the residential , hospitality and commercial industries ," Egipciaco says .— L . K-F
26 hotelsmag . com June 2018