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.
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“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."