So-called next-gen lodging platforms are doubling down on corporate needs, anything from remote work and relocations to extended projects, and even perks for personal use.
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Subscription-based lodging operator Landing raised $125 million to continue growing in the U.S., reflecting a corporate appetite for “flexible living” as remote workers hop from city to city.
It’s the latest in a flurry of major deals to emerge in the sector, which includes a new project from WeWork’s controversial co-founder. Adam Neumann raised $350 million for Flow, another one of these so-called next-generation apartment companies that offer a hybrid model of lodging that mixes short-term and long-term stays.
They’re increasingly appealing to companies, as well as people simply wanting to rent in a new city without being tied down by a traditional 12-month contract or mortgage. They also claim to appeal to real estate investment trusts, landlords and property managers as they take away the stress of finding vetted renters, and leverage apps to build ready-made communities.
Flow is slated to launch in 2023, and backer Andreessen Horowitz claims it will shake up the housing market.
However, Landing claims it pioneered the first “flexible living membership” model in 2019, as it allows members to jump from city to city, staying in its network with only a two-week notice. It now has its eyes on the business market via its new corporate housing program. Landing currently has 20,000 units in 375 cities.
“Landing is focused on building the future of living for people seeking more flexibility and convenience,” said CEO and founder Bill Smith. “Our apartments are also well-suited for corporate housing.”
That’s because those business client partners have on-demand access to instant booking capabilities, and a single platform for visibility into all reservations. The company said it has seen a 380 percent membership increase in the past year, and since it launched in 2019 claims members have spent 2.4 million nights in its apartments.
“The corporate housing and business traveler has always been a sweet spot for Placemakr,” said Jason Fudin, CEO and co-founder of another purported next-generation lodging operator, which raised $90 million earlier this year.
“As more companies adopt the work-from-anywhere model, it’s likely that the frequency of short-stay business travel will decrease, but the trips that are taken are likely to lengthen.”
In-person team gatherings, so-called bleisure and remote workers are also driving factors, and Placemakr is currently seeing an even split between leisure and business stays for its furnished units.
“We think that work-from-anywhere will be the largest factor driving where people live, stay, and have fun over the next number of decades,” he added. “Co-working and flexible offices are likely big winners of customers in this space, just as flexible apartment-style inventory is set to win big as people’s patterns evolve.”
The WeWork Connection
Neumann’s Flow venture is significant, considering the entrepreneur pinpointed remote work trends with WeWork several years ago.
“It’s unsurprising to continue to see large investments in the space,” said Fudin. “Our expectation is that apartment-style buildings that blend multifamily and hospitality will be the majority of new urban development breaking ground over the next four to seven years.”
He added that the community aspect, where these apartment platforms aim to connect residents, is another area that appeals to real estate companies.
Blueground, meanwhile, has also seen the corporate sector grow significantly and it says it appeals to digital nomads, business travelers or anyone looking to explore somewhere new. It has a portfolio of 9,000 apartments in 26 cities around the world, and focuses on the 30-day rental sector. The company aims to expand to 50 cities by 2025.
Blueground’s app lets users view and book apartments within minutes, the company claims, and they can manage the entire stay through it. Its Blueground for Business typically focuses on stays of four months, and it works with 2,000 companies, including Google, Amazon and Uber.
“Blueground for Business has seen by far our strongest demand yet and now covers 40 percent of our total business,” said founder Alex Chatzieleftheriou. The division has doubled the number of accounts in the past year, and will reach $140 million in revenue by the end of this year, which is 3.5 times more than in 2021.
There’s a mix of use cases underpinning the growth, the founder believes.
“As companies create their return to office plans, our typical use cases for Blueground for Business are coming back,” said Chatzieleftheriou,. “This includes new hires, relocations, and extended projects. Interestingly, the pandemic brought on new use cases. One where we’re seeing remote/hybrid model companies offering Blueground as a benefit, so sponsoring stays for their employees to work remotely or close to their offices.”
Some of its business clients were also allowing discounted stays to be offered as perks for personal use.
“We’re also seeing the demand from our guests to meet each other, network and build a community for themselves when they move, so therefore we’re adding a new community component in the coming year,” Chatzieleftheriou added.
The Global Business Travel Association conference in San Diego was a hive of activity last week. Many travel agencies and other suppliers used the event to launch new products or programs. Many, it has to be said, were similar but there was one theme that few touched upon. And that’s food.
A good meal in a restaurant can create a memorable experience, but one company at the convention in San Diego last week said it wants to help execs seal more deals at the dining table, as well as foster greater collaboration among colleagues.
So corporate dining network Dinova is putting a new twist on meetings and events, with a new concierge service called Dine Assist.
It’s going to be free for its 500 corporate enterprise customers, and it will aim to provide assistance when they book private dining events at high-quality restaurants. Overall its network spans more than 20,000 venues.
It’s a step up from encouraging business travelers to simply eat out at company-approved restaurants, with the main benefits here being visibility on spend and rebates.
“Restaurants are becoming the new meeting place for corporations,” said Alison Quinn, Dinova’s CEO, at the convention.
Dine Assist will offer one-on-one support with a dedicated event specialist to find quality venues that fits needs like budget, available dates, tastes, dietary restrictions and special requests. Quinn added part of the reason was that the company recognized labor shortages can be an issue, so it wanted to offer its own experts to help take away some of the planning workload.
Make no mistake, food and business travel is big business. Also speaking at the convention was Uber CEO Dara Khosrowshahi. Its meal delivery service was a $2.5 billion annual bookings run-rate business five years ago when he joined as CEO, he said, but today that has hit $55 billion.
“The growth of Uber Eats has been incredible, and the pandemic hit our mobility business really hard. It was a difficult time for the company, but a huge catalyst for Uber Eats.”
Uber Eats is now the same size as Uber Rides, Khosrowshahi added, and businesses were using free meals to get employees back into offices. Another emerging use case involved companies offering people a free lunch if they turn up to a virtual sales pitch.
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