It’s no surprise that the short-let and serviced apartment operator market (“operator”) is growing faster than any other property sector. With returns of 30% above longer tenancy models, operators are moving quickly to acquire properties in cities that are suited to accommodate their growth.
To highlight the extent of European progression in the sector, 63% of operators across the continent have taken on new units in the past 12 months, and 79% are planning to take on more in the next 12 months, compared to 60% in the US & Canada (GSAIR survey 2018/19). Furthermore, 7 of the top 10 locations across the world for short let expansion are based in Europe, with London coming out on top and 41% of pipeline openings occurring in the UK as a whole (GSAIR survey 2018/19).
Notable international operators entering the EU market include Selina ($100 million raised and 35 European properties in the pipeline, 4 of them in the UK), Vivali (Roundhill Capital-backed brand launching with 6 European projects 2 of which are in London) and Sonder ($135 million raised, >150 units in London and growing), all of whom are carving out discernable brands.
It isn’t a stretch to see that this operator market is ripe for design innovation at scale, and interiors are a crucial consideration to building a relatable brand for your target market; furniture quality (and its styling) will significantly impact yields, occupancy rates, NPS and repeat rate - more to come on these points in our future articles!
The design aesthetics adopted by an operator build into this notion that they are selling a lifestyle, creating a culture for their audience to buy into and curating an ecosystem of resonant brands to convey a compelling story of their own. Validation of this design differentiation comes from Jonathan Humphries of HoCoSo, who says that brand development is a relatively new phenomenon in the operator sector:
Some of the newcomers have had the opportunity to stand on the shoulders of the more traditional hotel brands such as Locke by SACO, MODE by BridgeStreet and Capri by Fraser. They are targeting the savvy, urban traveller, with stylish FF&E and fresh F&B concepts.
Given that tourism is such a significant driver of revenue within the space - tourist arrivals to Europe are trending for a 57% by 2030 with a 200% increase in Chinese tourism - the clarity and dexterity of the design is key in order to transcend cultural quirks and appeal to a variety of key customer segments without seeming safe and bland. The trouble is that the interiors space to date has not been suited to delivering personalised, quality design at scale, which is where we come in!
The Homewings platform enables property operators to interior design, procure FF&E, and install on a large scale. Combined with our network of 150+ designers and installation services, we seamlessly execute within your core setup for a new of existing property, allowing you to scale faster and reduce “burn days” on a lease or building completion down to zero.
This end-to-end, turnkey service is suited to all budgets and project sizes. Backed up by an industry-leading tech platform and flexible warehousing, we can pivot from projects ranging from 10 to 1000 units with relative ease and speed. Rather than being a cookie-cutter furniture solution, we help you to diversify the designs of your portfolio of units, which you can watch come to life through our design boards, resulting in properties that fit their neighbourhood, stand out from the competition and transmit the aspirational quality that your target audience desires.
The decision to delve into the operator market ourselves is led by a genuine excitement about working with progressive operator brands that value the substantial returns that great design can generate. If you’re an operator looking to grow in the European market and wish to work with the UK’s top-rated online interior design service, then book a demo today with our Account Director, Diana Sanni (firstname.lastname@example.org).