Hotel rooms by the minute

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Published Apr 27, 2017

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New York - Renting rooms by the hour is not a new idea, just ask any

member of the world's oldest profession. But by the minute? Well, that's

relatively new. And getting to use a luxury hotel room for just enough time to

do what you need to do and get on with your business that's a treat that's only

just now available, thanks to a new app called recharge.

A product of JetBlue’s tech incubator, JetBlue Technology

Ventures, Recharge Labs officially launched in 2015 in San Francisco. It expands to New York on April 24

with 16 luxury properties that range from the hipster-friendly Arlo Hudson Square,

located near the Financial District, to ritzy midtown five-stars such

as the Quin and the Pierre.

Prices in New York

range from $0.83 to $2 per minute (plus 14.75 percent lodging tax). Let's say

your priority is getting some rest; that means you’ll pay from $20 to $46 for a

20-minute power nap, $57 to $128 for a 60 minute snooze and shower, and $85 to

$207 for a 90-minute stay in which you can catch up on email. 

Short term hotel rooms are good for plenty more than just

romance and napping. You can use them as quiet spots with Wi-Fi to crank out

work on deadline, places to quickly shower and change as you shift from daytime

to evening meetings, or as refuges to rest up in after redeye flights.

According to Chief Executive Officer and founder Manny Bamfo

of Recharge Labs, they’re a great option for long-distance commuters and

families, as well. “We’ve been most surprised to see how useful it is for

nursing mothers,” he said.

Fast and Easy

How it works: Download the app (free on iPhone and Android),

find the hotel closest to you, and hit the “book now” button. Your billing

cycle starts 30 minutes after you’ve booked, or once you pick up your key whichever

comes first and ends when you hit “check out” on the app.

If you use the room for 47 minutes, you’re billed for 47

minutes. Recharge isn’t the first app to try to tackle the short-term

room-rental market. It has competitors in Dayuse.com and Hotelsbyday.com,

both of which run as websites and apps to serve many more cities, from Dubai to London to yes, Manhattan. The difference?

The two generally aim at a less expensive range of hotels and offer only

predetermined morning or afternoon time slots.

Read also:  Cape Town rental prices skyrocket

“Our two fixations are luxury and consumer control,” said

Bamfo, who thinks of Starbucks Corp. not Dayuse or Hotels by day as his main

competitor. It’s the easiest place to visit among daily obligations,

he claimed, whether you want to be productive or rest and regardless of how

much time you have to spare.

His trusty analogy: “Imagine if you could only park your car

for 24 hours, and that was just the only option. All we’ve done is put a parking

meter on some of the greatest hotels in the world and allowed travellers to

decide on their clock when to come in and come out.” A luxury hotel has a bed,

bath, and shower, he added. Starbucks has none.

What's in It for

Hotels?

You'd think cleaning the bathrooms and changing the sheets

multiple times a day might make it hard to break even on quick, relatively

low-cost stays. But that's not so. Hoteliers win big, too. In fact, a majority

of Recharge hotels in San Francisco

are turning six-figure annual profits based on by-the-minute reservations; some

are poised to break seven figures soon.

“Every single minute that you’re in a Recharge is a more

valuable minute than if you were a regular overnight customer,” Bamfo told

Bloomberg. Indeed, 24 hours at New York's 1

Hotel Central Park would cost $1 920, based on

the property's $80 hourly rate on Recharge, but a regular guest would

pay roughly $400 nightly.

The premise doesn’t rely on unsold inventory, either.

It's more about filling rooms that are unoccupied for at least part of the day,

thanks to early check-outs and late check-ins. About 35 percent of rooms are

vacant during the day, said Bamfo, even in hotels that are 100 percent sold-out

overnight.

Hoteliers are warming up to the idea quickly.

"Measuring the hotel by vacancy, as opposed to occupancy, is a

futuristic way to look at hotel metrics,” said Barry Sternlicht, the veteran

hospitality guru behind 1hotels.com. “If locals

eliminate vacant space in hotels, this is something to evaluate. The

initial results are encouraging."

Are hoteliers worried about the lewd associations of

by-the-minute reservations? Not particularly. Stephen Brandman, CEO of Journal

Hotels, whose Hotel G is available on the app for quick stays; said

quickies aren't a use he's seen embraced by Recharge guests. In his

experience, “Recharge caters to the local community and redeye fliers who are

not in need of a full night’s stay, and it’s an opportunity to embrace people

who aren’t the traditional customer while increasing foot traffic in the

hotel,” he said.

What Comes Next

Bamfo, talks about hotels “coming soon” in cities from Chicago to Los

Angeles, but he’s evasive as to which cities

might launch next. His expansion plans are guided by data, he said; customer

requests and feedback drive his expansion targets, and he’ll need strong

geographic diversity to officially launch in any market. “We look at where

demand is, and we go deep,” he said.

Recharge may be growing slowly and steadily, but Bamfo sees

a big future. Already the app has a high rate of repeat customers, at 75

percent; some users rent short-term rooms multiple times per week, or even per

day. “We could be one of the biggest companies ever,” he said boldly, with no

shred of self-doubt.

That's unabashed big talk. He could be one of the biggest

disruptors in the hotel space, though. With long-term revenue projections

looking stagnant for the hospitality industry, Recharge will help luxury

properties squeeze value out of assets they've been looking to better

utilize. "Hoteliers have been struggling to answer the question,

what can we do to improve rev par? What can we do to grow faster?" said

Bamfo. "And there's certainly money to be made right here."

BLOOMBERG

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