‘Apart-Hotels’ And Turning Apartments Into Boutique Lodging

Some entrepreneurs are inspired to start companies that stem from their passions: Nitesh Gandhi, founder and CEO of “apart-hotel” company Locale, was drawn to design, architecture and spaces while growing up. Gandhi said he has always been the one to look for the coffee shop with a great atmosphere (and, of course, great coffee). After spending time in the hotel world for a few years and then in vacation rentals, he saw an opportunity to combine the best of both worlds. Locale offers “the amenities and styling” of a boutique hotel along with the privacy, comfort and freedom of apartment living, Gandhi told PYMNTS in an interview.

Apartments, especially upscale properties, are amenity-driven in today’s world. They come with features such as rooftop pools “and incredible gyms” that match the “ best gym memberships you can find,” Gandhi noted. Some properties can boast features such as concierge services and doormen as well. “They have all the trimmings of the best boutique hotels,” he said. At the same time, Gandhi noted the product and quality of apartments have grown so rapidly that the market has facilitated a true boutique experience, a concept he doesn’t think was available even 10 years ago.

To book one of the company’s apart-hotel units, travelers can use a few different channels. They can book through Airbnb, and most of the company’s units are Airbnb Plus. Alternatively, they can find the company through online travel agencies (OTAs) such as Expedia, Hotels.com and Booking.com by searching for a particular property. Locale also allows travelers to book directly through its website or via phone.

Once a customer makes  reservations, the guest experience team confirms the details of the stay. The company handles most of its conversations via text message up to arrival and during the stay. Travelers can also reach out to the team anytime. For payments, Locale accepts credit cards (and does not take cash). To access the units and the properties, travelers get a code for the building and apartment. They can then check in at 3 p.m. or earlier based on availability.

When it comes to properties for Locale’s platform, Gandhi noted location is important, as it should be near bars, restaurants and cafes. Quality is also important: The company is looking to work with properties that are usually newer and well-located. The aim is to be in locations and locales that support a great travel experience, both within and outside the property. Locale currently lists locations in Austin, Houston and Nashville on its website.

Overall, Locale seeks to create a boutique experience, rather than a cookie-cutter apartment with another operator or extended-stay hotel.

The Apart-Hotel Market

Gandhi pointed out that the quality and experience of apartment buildings have evolved. At the same time, technology has progressed to include devices like smart tech locks and systems that provide automation in a secure, scalable way. He also pointed out that the demand for alternative accommodations has soared, with Airbnb and HomeAway leading the charge.

The combination of these factors, Gandhi noted, has fueled growth for the sector and made it clear it was time for the company to come out of the woodwork. Locale notched $2.5 million in a seed round, led by Amplo and Susa Ventures. (In an announcement, the company noted the raise was the first funding round since its late 2016 launch.) The company has planned expansions with upscale Class A multifamily property developers.

Beyond Locale, other apart-hotel startups exist in the market, such as WhyHotel. Similar to Locale, the company lists on sites where consumers traditionally find travel listings – online travel agencies (OTAs) and home shares – in addition to its website. In addition to digital marketing, WhyHotel also takes an offline approach by meeting with nearby businesses and highlighting the work of local artists in its properties. The company, in essence, seeks to add local flavor to a property.

From WhyHotel to Locale, innovators in the apart-hotel field are looking to provide differentiated experiences and residential amenities to consumers, layered on top of a multi-channel booking experience, in the digital age of travel.