Since Airbnb began to disrupt the U.S. hospitality sector, industry leaders have been thinking about ways to attract previously underserved customers. A number of recently built hotels and resorts combine the space and amenities of a private home with high-end amenities, concierge service, and curated experiences. But few have tackled the needs of cash-strapped millennials heading to their next freelance gig—until now.
A 2017 ULI Fall Meeting session titled “The Colliding Worlds of Housing and Hotels” presented two recently introduced concepts with distinctly different target markets and price points. The session’s moderator was Christopher Martin of AC Martin, a 111-year-old architecture firm that oversaw the design of the soaring new Wilshire Grand Hotel in Los Angeles.
Bunk beds, anyone? Elina Beck founded PodShare as a membership-based co-living community. Guests pay $50 per night for a single custom bunk bed in a dormitory-style room with up to 20 or more other people. Couples pay just $20 more. PodShare’s members eagerly trade most of their privacy for low prices, flexibility, and the chance to engage with fellow guests.
Attendees also heard from Brian De Lowe, who heads Proper Hospitality as well as the Kor Group, which develops multifamily properties. De Lowe described the firm’s recently opened Hollywood Proper Residences in Los Angeles, which offer furnished and unfurnished apartments that can be rented for almost any length of time.
Hollywood Proper is part of the Columbia Square mixed-use project, under development by Kilroy Realty on the grounds of a former CBS studio. The site was first rezoned for a 20-story residential building.
“We wanted to create spaces that offer a great hotel experience, ideal space to commune with others, and a residential feel for longer-term guests,” De Lowe said. “Our guests include couples renovating their houses, professionals on short-term assignments in the entertainment industry, and people who have just moved to Los Angeles and don’t know anyone.” Apartments range from 750 square feet (70 sq m) one-bedroom units to penthouses with 2,500 square feet (232 sq m) of living space. Residents enjoy a posh rooftop lounge and pool with views of the iconic Hollywood sign.
At the other end of the pricing spectrum, PodShare is definitively not posh, but millennials are attracted to its unique approach to hospitality, merging elements of European-style youth hostels, hotels, coworking sites, and rental apartments. “At PodShare, you get your own bed, but you share everything else,” Beck explained.
PodShare builds and installs custom-made adult-size bunk beds with stairs in place of old-fashioned ladders. Each pod has its own television—no to cable, but yes to Netflix, Hulu, and other streaming services. A few of the lower-level beds convert to desks. The pods include 50 square feet (5 sq m) of living space per guest; shared space adds an average additional 50 square feet per person.
PodShare provides everything guests might need, from towels, bedding, and toiletries to a communal kitchen with a fully stocked refrigerator and pantry, coworking space, use of bicycles, and programmed events. Purchasing a PodShare pass allows guests to move around to any other PodShare facility.
Beck noted that 87 percent of PodShare’s guests are solo travelers. Others are “transitioners,” who often find future roommates during their stay. No children under 18 are allowed. The model is successful, with 90 percent occupancy and healthy revenue per available room (RevPAR) due to the pods’ small size. PodShare executes long-term leases on commercially zoned “dead space,” builds out its own space, and pays off its high-interest private debt in six months.
Beck’s company is thinking of adapting the PodShare concept to other target markets, such as seniors, and including some small private rooms. But to make the concept work for the homeless population, she concluded, “we need a pioneer.”