Hotels vs STRs — Or Something in Between?
By Isaac French
When I built Live Oak Lake, I came from "team STR". Actually, I never put much thought into what we identified as. I just took for granted we should be considered a group of short term rental.
That was frame of mind. But we were more than that.
You see, identity is important. And after a year or so of operating Live Oak, I began to identify more - but not totally - as a hotel.
It's not just about semantics, it's about embracing a new paradigm in the guest experience. There is an interesting tension between the two camps, and I want to explore it just a bit.
It's hard not to fit in — especially when you're trying to raise money from investors or even worse, get a loan.
It's hard to pitch your idea to the traditional, bespectacled banker and expect them to do anything better than look at you as if you're somewhere between stupidly naive and straight-up delusional.
I didn't have all the right words, or any comps whatsoever, when I chatted up multiple banks the first go around. All I had was a deeply internal and visceral belief that my idea would work.
I called my idea "a collection of modern cabins with a commons area - a 'short term rental' village."
I got those looks.
"Some sorta modern cabin campground? Oh, you're just trying to copy and paste a bunch of b&b's? Ahh, now I get it — this is basically just a hotel without the amenities or a corporate flag. No, we are going to pass on this one."
Uggggh. That pit in my stomach. Their inability to see beyond traditional models was disheartening. I hate being told no, yet it fueled my determination. My friend Ben got "no" no less than 20 times while trying to secure debt for Onera.
If I had only known terms like "landscape hotel" or "micro-resort" at the time... (well, I probably still would've gotten those looks, but at least I'd have had more confidence saying them out loud).
(I must confess, I actually wrote one of those bankers a short email as we were wrapping up the project to show him the success. It was gratifying to write, if not slightly immature. He responded pleasantly, but short. He still didn't "get it."
A new generation of travelers is looking for a new generation of hospitality. A fresh and experiential model.
They don't love stale hotel environments or unpredictable airbnb experiences.
They want unique experiences, stunning design, and personalized hospitality.
My friend Buck, an upstart boutique hotel innovator, recently wrote about the transformation in the industry:
Airbnb revolutionized the hospitality landscape, taking STRs from a sleepy off-shoot of hospitality to a dominant force in the broader market. Travelers were greeted with self check-in, tech-enabled service & unique, bespoke experiences en masse for the first time. And they loved it.
We’re still early in the arc of this story, the effects of which continue to create opportunity. Especially as more discerning travelers look for something new that offers the best of both short-term rental and traditional hotel & resort properties.
...the best of both short-term rental and traditional hotel & resort properties.
Yep. That's where the magic happens.
Traditional Hotel Advantages:
Consistency and quality
Brand loyalty
Guest services
Cool design
Standard STR Advantages:
Privacy and space
Room for groups
Guest autonomy
Unique experiences
So how do you combine the best of both worlds? Well, in my mind it's got to be a deeply personal and almost instinctive recipe mixing great design, brand magic, experiential elements and storytelling, with the appropriate tech and automation to streamline operation and cut down on unnecessary staffing.
I'll borrow again from Buck's work on a recent deck:
PRIVACY & COMMUNITY
Group travelers are able to use common areas without disturbing their friends and other guests with noise. Guests can effortlessly shift between serene privacy in their units and communal experiences in the site’s shared spaces.
FLEXIBLE OFFERING
Separate units & communal spaces allow each property to serve individuals, couples, and large groups or events.
LIGHT STAFFING
Without traditional concierge, F&B, or spa programming, our model reduces operational complexity and cost.
CONTEXTUALLY RELEVANT DESIGN
Rather than a singular imposing resort structure, integrate dispersed units seamlessly into the environment, harmonizing architecture with nature.
The goal with Live Oak Lake was striking the balance between hidden in nature, and a charming village, especially in the evenings when the lights reflect in the water.
The future belongs to those that can marry the best of both hotels and short term rentals to create a new breed of unique, experiential hospitality properties.
And so many are already doing this. Banks and investors are much easier to convince than they were even months (and especially three years) ago. The Live Oak exit is a great case study. Go ahead - use it in your deck.
$1M/key ain't bad for "basically just a hotel without the amenities or a corporate flag."
It brings me such a smile just to write that.
The poor gentleman's retired now. Sweet guy. He just doesn't get it, and that's OK.
You do, so go get it!
Would love to hear what questions or ideas you have about the intersection of hotel and STRs. Hit that reply button, and thanks for reading each week. Means the world.
—Isaac
P.S. I’m launching a free 7-day email course called the Experiential Hospitality Crash Course. It's a free, lite version of the masterclass. Click this link to opt-in and get Day 1!