Backed by investment capital and disparate hotel owners’ conviction, Yotel is now offering an extended-stay product that has an initial pipeline of five developments.
LONDON—Yotel, known for its cabin-style YotelCity and YotelAir brands, is branching out into the extended stay and serviced-apartment sectors, and guests can expect a similar focus on technology, design and cool public areas, according to Yotel’s CEO Hubert Viriot.
Launched on 16 January, YotelPad, according to Viriot, will have the same DNA as its two other brands but address a new segment.
“I see the guest (for YotelPad) as being the exact same person as our guests for our other brands, but suddenly their purpose of travel has changed. That will not be the case all the time, of course, and there will be new guests, but all will require well-designed, tech-savvy accommodations,” Viriot said.
YotelPad rooms do not come with a minimum length of stay.
YotelPad, Viriot added, will have a slightly different type of accommodation option, one that would appeal to flexible clients who increasingly are commuting between major global cities and require something attractive, functional, cool and socially connected and not a huge, luxurious spread, which he said are the favoured serviced-apartment blueprint.
“In many instances, serviced apartments are not that different from your average condominium. Let’s face it—quite often serviced apartments are failed condo developments, not purposefully designed for long stays, (and are) merely furnished apartments,” Viriot said,
Viriot believed Yotel could do far better.
“We thought we can apply what we know to this segment. We would have clever cabins, put into them what guests need and take out when they do not. There will also be large club lounges,” Viriot said.
YotelPad rooms will be either studios or apartments, as small as 20 square meters (215 square feet) and up to 60 square meters (646 square feet).
Viriot believes the smaller room sizes associated with Yotel will not be a detriment for the new brand.
“Small is not a problem in serviced apartments if you add all the requirements. For example, the sector in London means luxurious and expensive, with smaller spaces meaning merely an Airbnb, and without the service and social elements, which we consider very important if guests are staying there for a longer time,” he said.
Viriot added that all rooms will be private (no dormitory-style room-sharing), and each will have a bathroom, small kitchenette and lots of storage space.
“They will have all the tech you’d expect from a Yotel. Yes, some rooms will be small, but smart beds will allow space for a great bathrooms. Room design will be more market-driven,” Viriot said.
The design of YotelPad’s public spaces will derive from those in its YotelCity hotels, with the main difference in YotelPad being that the service element would be lower and F&B more limited and automated.
“Maybe there’ll be a serviced element for breakfast, working with partners,” Viriot added.
The recent arrival of Starwood Capital Group’s investment might have provided Yotel will more flexibility to enter a new hospitality segment, but Viriot insists conversations and thought as to entering the sector took place even before Starwood Capital joined the party.
“This extension to the brand has not been conceived over the last 90 days, or since Starwood came in. It is a vision (Yotel) started to talk about since I joined three years ago. The waters were tested, the plan was put back on the shelf, and then taken down. And then put back again,” Viriot said.
The plan took structure, Viriot said, when one of Yotel’s hotel owners mentioned he was eager to add serviced apartments to his existing hotel.
Initially, Viriot was reticent.
“I was not going to do a brand for one guy or for one project,” Viriot said.
Later came other, unconnected approaches from owners in Miami; Park City, Utah; and Switzerland, Viriot said. These interested developers came from different sectors of the industry but all wanted serviced apartments as part of their development, regardless if they were a beach resort, ski resort, urban or rural destination.
Yotel’s other brands, YotelCity and YotelAir, average guest stays of three nights and four to five hours, respectively, Viriot said.
He added YotelPad allows Yotel to enter destinations it would not have been able to get into with the other two brands.
Other nods toward the needs of serviced-apartment and extended-stay guests, Viriot said, would be co-working and meeting areas and offerings such as movies, laundries, bicycle storage and 24-7 fitness centers.
Amazon lockers, car parking and swimming pools might also be offered at some properties but would not be brand standard.
What will not change from all Yotel brands will be kiosk and smart phone reception and entry, Viriot said.
YotelPad already has five destinations in its pipeline—Dubai, Miami, Park City and two in Switzerland, in the Geneva and Lausanne areas.
More details on the Miami venture will be announced later this month, Viriot said.
“We won some time ago a request for proposal in Dubai, part of a mixed-use project, for a YotelCity. On top of the hotel, which has 452 rooms, were some serviced apartments, and very quickly the owner asked, Why do you not run the apartments so I do not have two back-of-house cores?” Viriot said.
The Dubai asset will have 101 YotelPad keys, and construction is under way.
“For the asset in Miami,” Viriot said, “I asked the owners if Yotel could run the serviced apartments. They said no, but then later they came back … so suddenly the new brand had two potential projects. … In Switzerland, there is a shortage of serviced apartments. The area is full of the HQs of global companies.”
The owner in Switzerland is m3 Real Estate, Viriot said.
The owner in Utah is Replay Destinations, which Viriot said is a vehicle created by entrepreneurs once involved in Intrawest Resorts Holdings.
Its Park City Mountain resort is the biggest key destination in the U.S., Viriot said.
“It is an amazing destination for me, as I never thought I would have a location in a ski resort,” Viriot said.
He said he’s pleasantly surprised by the new brand’s quick takeoff.
“I am amazed by our head start with these five projects. We do realize it is a new investment and class, with new rules, but we will go forward step by step. We’re clear that there is appetite in all four corners of the world, so we do see a very attractive run going forward,” Viriot said.
He noted the new brand seems to be drawing diverse interest.
“There also is interest from developers looking at this on a yield basis. Others look at it on a sale-and-leaseback model. It is a segment that is very flexible, but we do not want to say right now this is how many assets we’ll have and by when,” Viriot said.
Viriot believes having a variety of brands will ultimately be a boon for his company, expecially as YotelAir and Yotel City continue to grow.
“Diversification of risk but with one operational hat also is appealing,” he said.