Last week Stephanie Ricca wrote a very interesting piece about branded residences, following a panel discussion at the International Society of Hospitality Consultants annual conference. We were very interested on account of it being very interesting.
In it, Ricca pointed to the rise of the stand-alone model of branded hotel residences. Residences, without the hotel. It used to be that the residences helped to fund the hotel, but now developers are happy to sack off the hotel part.
So hotel companies, it seems, are now also residential branding types. This opens up a rich seam of branding every single part of our lives, even the parts which may not have been branded before, or where you might not expect to find a brand. In the UK, the closest we have come to a residential brand is Barratt. And that is not commonly wielded as a compliment.
As the piece noted, this is an obvious move for hotels. They’ve been doing residences for many a long year after all and at a certain price point you may feel that you’d sleep even better if you actually owned the room, as opposed to feeling like, at that rate, you blimmin’ well should. And it appears that people are happy to pay a service charge for amenities such as receiving Amazon parcels, regardless of whether you call it a concierge, hotel reception, or helpful neighbour you happen to pay.
So where next? It is generally accepted in the sector that hospitality is now everywhere. Co-living, co-working, senior living, student living. Might you have a standalone spa? Would you send your child off to live in a Marriott student hall? You can feel the soothing reassurance of the known brand untense those shoulders even just thinking about it. Even more so if you could earn loyalty points.
Before we stray into an area already well known by Succession fans, will the next step before the old folks’ home be a more concerted attack on Airbnb? The sharing platform and its chums are currently having a right load of old chong in all manner of locations, from New York to, most recently, South Africa.
One of the ways that the platform has tried to counter this in the past has been by working with developers. Back in 2017 Brookfield planned to invest up to $200m in a joint venture with Niido, the multifamily development partner of Airbnb, to build apartment complexes where the tenants were allowed and encouraged to rent out their space. Some lawsuits followed, largely because the initial complexes already had people living in them and they were disinclined to be part of a groundbreaking shift in the residential market.
New brand Natiivo, powered by Airbnb, was launched and has two properties, both of which are licensed as hotels. For once, this is somewhere the hotel sector can swoop in and be smug. Most hotel groups have more than two hotels. Ha.
The models of Natiivo and the branded residence have such massive crossover as to be less a Venn diagram and more of a circle. Renting out your space for cash while you’re away? It’s all very familiar. And hotels have already built the brands to support them, brands which are comfortable in their consistency in a way that, for all Brian Chesky’s promises, we haven’t seen yet at Airbnb.
So where next? We have heard mutterings for the past few years that the hotel sector would offer branded residences further down the chain scales. Could they start to compete with the cheaper Airbnbs? Those with long memories recall the co-living brands which claimed that a membership would afford you year-round digital nomadding (tax residency issues notwithstanding). The sudden return of vinyl records illustrated that it’s all very well having everything in the cloud, but actually people like to own stuff. Is the branded residence a way to own somewhere, but subscribe to stay in other properties within the estate? A home from home from home?
We’ll stop before we invent timeshare. But it seems that the chance to come home to your favourite hotel could be permanent.