It's a bitter irony that the pandemic has driven a push to remote work and created an immense opportunity for traditional providers of serviced apartments precisely at the moment that they have stumbled in their execution.
National Corporate Housing said on Tuesday that it had acquired the European and Asian agency business of BridgeStreet, which once promised to bring digital innovation to corporate housing. It filed for bankruptcy on November 25 and is liquidating its remaining assets in the U.S. and Britain.
BridgeStreet, a 20-year-old company, was another victim of the coronavirus pandemic. In April, it exited its U.S.-based service apartments business, closing its brands and operated properties. This week, it notified customers in the UK and Europe that it would no longer honor its bookings and that it was closing its apartment hotel brands like Mode.
“This is an unfortunate conclusion for many of BridgeStreet’s stakeholders, particularly for much of BridgeStreet’s talented workforce, we are pleased that National Corporate Housing, a leading provider of serviced apartments, will continue to work with many of BridgeStreet’s valued long-term clients and suppliers,” said Kamal Advani, a managing partner at Versa Capital and the recent CEO of BridgeStreet, in a statement to Skift.
National Corporate Housing has snapped up BridgeStreet’s separate agency business, which said it would provide a smooth transition for current guests and clients and that BridgeStreet’s staff in Europe and Asia would join its teams.
In its filing for Chapter 7 protection in a Virginia court, BridgeStreet said it had less than $10 million in assets but more than $50 million in liabilities.
“A variety of obstacles including the acute and continuing effects on BridgeStreet’s business due to the pandemic-driven collapse of corporate and leisure travel, particularly in the United States and the United Kingdom, and adverse legal matters have all severely limited BridgeStreet’s options and impacted the continuity of the enterprise at home and abroad,” Advani said.
Before the crisis, BridgeStreet promised a “mini-revolution in online booking” of serviced apartments. It pledged to bring the ease of an online travel agency experience to corporate housing, making it easier for property managers to distribute serviced properties and for travel managers to book them.
At its height two years ago, it provided corporate housing to more than 5,000 companies, such as Tesla, Disney, and Liberty Mutual. It leased or managed 4,000 furnished apartments and houses and aggregated 60,000 properties supplied by professional property managers.
In 2015, BridgeStreet began a collaboration with Airbnb, by adding its then-new Airbnb for Business offerings to BridgeStreet’s channels.
Other players, such as Oakwood Worldwide and MagicStay, have also made changes during the pandemic. In March, Oakwood sold, via a complex deal, its technology for managing accommodations to Dwellworks, which provides destination- related services to business travelers. Oaktree’s owner Mapletree has refocused the brand on being a hospitality management company for more than 80 properties worldwide. Oakwood noted that, apart from locations where it has been governed by the local authorities to close properties temporarily, all of its properties have remained opened and operational to date.
“The sector has always been ripe for disruption by STR-style [short-term rental] operators, but brands haven’t gone after it much,” said Parker Stanberry, CEO of Oasis, which professionally manages apartment and home rentals in several countries, has launched a subscription model for travelers looking for extended stays. “Relocation or temp-housing, as they call it in the corporate housing space, now has new twists and opportunities, thanks to rising remote work and rising new business models in corporate real estate.”
Photo credit: Two people working in an apartment. Austin Distel / Unsplash