This deal between the lodging brand and the co-working program could not have come at a better time. Selina has the real estate that Remote Year needed to be cost-effective, and Remote Year has the digital nomads Selina could use to drive its growth.
Hotel startup Selina said Monday it had acquired the brand and customer base of Remote Year. The pandemic has knocked both businesses sideways. But the deal offers Selina a new path to a promising segment of demand for its hotels and hostels in 19 countries that already include co-working facilities.
The companies didn’t disclose the terms of the all-stock transaction. Remote Year, a Chicago-based program that lets employees work in a different global city every month, raised $5 million in funding last year and $17 million since its founding in 2015. The pandemic led Remote Year to pause its operations in mid-March, when it laid off about 50 people, or the majority of its staff.
Selina, a Panama-based company that provides travelers with co-working spaces, hostel-style lodging, and activities, promised to fulfill any outstanding commitments Remote Year had made to its customers and to invest to build the brand as essentially a subsidiary. Selina will lend its properties, its technologists, and its marketers to help Remote Year.
“The rise of digital nomads is going to be one of the biggest movements hospitality has ever seen,” said Selina co-founder and CEO Rafael Museri.
Even if the trend is on the conservative side of forecasts, Museri said, companies and employees have now been forced to recognize the potential the cost savings of employing a highly skilled remote worker in, say, Costa Rica.
“The traditional OTAs [online travel agencies] aren’t ready to package this whole life in a smart way,” Museri said. “Remote Year can step in as a global brand. They’ve already built such a great brand. It already has great word-of-mouth marketing.”
raised about $60 million in extra funding earlier this year, sources told Skift. The startup declined to comment on the funding total but has previously disclosed raised $225 million in venture equity funding from investors such as Access Industries, Grupo Wiese, and Colony Latam Partners. It had also secured more than $300 million for a real estate investment fund.
In a related move, Selina rolled out in August a couple of subscriptions that make it simpler for remote workers to book extended stays at its properties.
One subscription, called Nomad Passport, lets travelers buy 30-, 60- or 90-night credits at discounted rates. Another, called Selina CoLive, lets digital nomads stay at any Selina property for a one-, three- or six-month stay. A corporate program lets companies buy passes for their workers. Each plan covers a seat in the co-working area at each property.
With almost no marketing, Selina has signed up 120 subscribers, Museri said. The brand wants to cap it at about 400 or 500 subscribers who will live globally so the company can test and perfect the model. Key metrics are customer satisfaction, average size of transaction, and customer acquisition costs.
The move illustrates how many travel companies are trialing subscription services.
“I bought the book ‘Subscribe’ for all the leadership in our company,” Museri said.
Remote year doesn’t yet have a timetable on when it will resume accepting customers. It had until now offered 1, 4, 6 and 12-month programs, in a dozen cities, including Mexico City, Medellin, Lima, Santiago, Split, Lisbon, Valencia, Cape Town, Hanoi, Kuala Lumpur, Chiang Mai, and Kyoto. The program had cost between $2,000 and $3,000 a month plus an initial payment.
Earlier this month, it signed a deal with The University of California, Irvine Division of Continuing Education (DCE), to offer a certification program for specialized studies in leadership, where the university will provide a curriculum with remote coursework led by its instructors.
Selina has continued to grow despite the crisis. The company has opened about a dozen locations since the start of June.
“The average occupancy of those 12 locations is higher than any other 12 locations ever opened in the history of the company,” Museri said. “Most of which were in countries we didn’t have operations in before like Greece and Israel.”
Note: Skift previously had one colleague do Remote Year, which enabled her to learn about multiple cultures.
Photo credit: People on the Remote Year program talk with each other at a New Orleans co-working space in 2019. Selina has acquired Remote Year. Remote Year