Innovative Hospitality model, next step
While some hospitality brands started to develop their innovative concept, Covid-19 was a non-existing word.
I've followed since the beginnings the Room2 brand and concept, auto-named as Hometel, defining a new niche at the crossroads of hotels, serviced apartments and AirBnB. More flexibility in the lenght of stays and more attention to communal spaces,
While this hybridization at the beginning was seen as a "monster" and challenged by the high return of short term stays, attention to stability of income and a diversification in terms of customer types, has been turbo-charged and tested under Covid-19.
This new segments were waiting for the Baptism, an institutional investor trading an asset operated under this brand/model. Curiosity for yield and discount, income dynamics under stress and comparable metrics will be a bellwethers for the industry.
And here we had the deal: https://www.propertyweek.com/news/aberdeen-buys-room2-aparthotel-in-southampton/5112091.article
The acquisition price paid by Aberdeen reflects the anticiclical model offered, trading at the level way far from the traditional hotel deals (sub 5%!!!!!!) and showing a real confidence in the model other than in the brand platform. Resilience, an abused term in 2020, has surely been here the key.
"The ability to pivot between long and short stay augments the lean operational model without compromising on service. This not only protects business in a downturn but as importantly, should allow for future outperformance with the quality facilities and flexibility of the product being attractive to both business and leisure travellers when markets normalise" : Absolutely clear sentences!
"During 2020 room2 achieved a blended monthly occupancy rate of 70%. This compares favourably to the national serviced apartment average occupancy of approximately 47%, which itself is 9% ahead of the national hotel average. The model has benefitted from its flexible cost base, enabling the hometels to adjust the service offering to cater to longer term guests, whilst capturing new markets and therefore protecting margins."
Numbers totally different from the more broad hotel segments.