Multifamily Hospitality and Flexible Rentals

Multifamily Hospitality and Flexible Rentals

Multifamily inventory is well position to capture a considerable share of the $2 trillion accommodation market. These vertical neighborhoods offer high-end living experiences with resort-quality amenities, activities, events, services, furnished units, and short-term rentals. Hospitality-focused multifamily operators can drive higher occupancy and rents by attracting today’s residents who want to live, work, and play in safe, friendly communities.

At this Multifamily Innovation Conference – Atlanta (MICA) session, moderated by Eric Bache, Head of Getting it Done, at Reservation Software, he spoke about the flexible-term furnished accommodation sector with Sean Miller, Director of Awesomeness of Reservation Software; Lee Curtis, Founder & CEO of Reside Worldwide; and Julius Milani, Vice President, National Accounts at Brook Furniture Rental.

“There’s a huge global opportunity coming out of the pandemic and there’s a lot of shake-up going on,” Bache said. “Lengths of stays are blurring and the types of stays are too. You have staycations and business travel blurring.”

Corporate housing and a new breed of short-term rental opportunities have their place in this space.

“In the past five years, it’s fascinating how much change we’ve seen in how furnished apartments have been categorized,” Curtis said. “There are many different ways to provide the service. Corporate housing is not just one thing: Class A property with furniture. It’s much more: Crew housing, student housing, oil field housing, corporate housing: All there to service corporate clients’ needs.”

The arrival of Airbnb in this time has led to “exceptional traction” for the industry, Curtis said. “It has been great,” he said. “It’s not just for corporate housing. It’s multi-layered. There are very fluid business models for what is professionally managed housing.”

Corporate housing “can flex its supply” to meet changing demand through the economy’s ups and downs and seasonality, Curtis said. “We have intimate relationships with the corporate clients and engage in regular planning between us and them. The key is to not be too aggressive. It’s a build-up and tear-down operation. Throughout this time, we’ve never had a company run under 90 percent occupancy. Length of stay drives the predictability of bookings. We don’t need to chase nightly bookings.

“There are so many more types of companies that provide furnished housing today. Create a relationship with whoever shows up at your door to service that five-year lease. Show to them how you have managed your way through a significant downturn – because now, we’ve just gone through one. And don’t be afraid of those answers. What is it worth to you to take those risks?

“It doesn’t hurt to be creative. Pick your horse, then sit down with them and create a business relationship with them. We’re needed when things are soft, maybe not as favored when the market is hot, but we’re always there for you. We know the market and where you’re trying to get to. Make a plan, not a last-minute grab.”

Curtis said that “when everything just stopped” with the pandemic, many in the corporate housing industry didn’t have a huge client exodus. Our business was down, but it wasn’t at zero. What we had in March we had the rest of the year. There’s a resiliency of travel in and out of Seattle during the pandemic. It was amazing. Outside of Seattle, it’s jurisdictionally driven based on what you’re allowed.”

‘Looking for Something that’s Not a Hotel’

Curtis maintains that the leisure market “is there, people are looking for something that isn’t a hotel. They want something boutique and small and controllable.”

The loaded question going forward, he said, is “what does the multifamily industry think of the short-term and corporate housing market after a certain percent of those providers abandoned their leases and didn’t pay rent?”

He believes that multifamily operators “know which companies did, and which ones didn’t. So, it’s not an industry question, it’s an individual provider question. Most in our industry did the right thing.”

Milani said the rental furniture industry has also adjusted to capture the past year’s opportunities.

“Requests for our commercial and office furniture are up 400 percent,” he said. “More are looking at furniture as a service, as an amenity.

“Retail furniture companies are having challenges getting their supply chains to work. We own our furniture. We have inventory, we get our furniture back. It’s part of our company’s sustainability model. We can move it around the country and enable our customers to flex in and flex out.”

At the same time, Milani said his partners have become more cautious. “We’re looking at ways to get them out of leases if they need to,” he said.

Milani said Brooke is being more flexible in this new normal. “We used to rely on big showrooms for our customers to visit,” he said. “Now, we have to connect with them through our websites.”

Meanwhile, Curtis said the industry is finding the right balance between using technology and personal service.

“There’s a lot of discussion about technology and its lack of human experience; it’s all tied to bots and AI,” he said. “That’s great. We want tech to make sense for the clients.”

Customer service plays an important role, he said, in extended stays (30 days). “That length of time makes the customer experience very personal; so, you don’t want your guests to be left with feeling that there’s not a person there for you. You want to provide comforts and safety for them. Contactless keyless check-in, especially during the pandemic, working from home, etc., is great, but there’s the right blend and balance of tech and service.”

MIller said it’s optimal for operators to use technology to manage the utility of rentals from two days to two years. “It needs to address the day-to-day necessities of management so staff can use this time to take care of their guests.”

Fortunately, he said, “everything is cloud-based now. Provide modern digital architecture for the user and automated real-time data. You want something that is easily modified so your customers can avoid having to change out their technologies to solve a problem.”

Here is the replay: