Megatrends We’re Monetizing

Hardly the first to identify this trend, experiential hospitality has been talked about in hospitality circles for years. This said, it is one of the strongest trends in the marketplace today, accelerated by the COVID-19 pandemic that starved us of new experiences. We firmly believe consumers will continue to put a premium on experiences, and we tailor our locations and a-la-carte amenities to emphasize unforgettable experiences. This preference is a guiding principle for our approach.

Another core tenet at Stomp is that people want to be part of something beyond themselves. Similarly accelerated by the pandemic, we believe consumers will prioritize community-building and shared experiences over anonymity and ubiquity. Therefore, we intentionally design our properties to foster community on-site through physical gathering spaces and in the local communities through curated experiences.

When was the last time you heard someone rave about how consistent their stay was? Gone are the days of cookie-cutter hospitality, where the greatest difference between the Holiday Inn in Shanghai and the Holiday Inn in Des Moines, Iowa, is the view. While consistency in execution is table stakes, consistency in design and experience is boring. We look to the world around us for inspiration to create a distinct sense of place on each property and deliver uniquely local experiences.

While this trend has wide-ranging implications for various industries, we believe this is particularly relevant for short-term rentals (STRs). Richard coined the term STR 3.0 as the next evolution in the short-term rental market beyond the availability of lodging (STR 2.0). STR 3.0 is the creation of custom-built, one-of-one short-term rentals in unique locations that inspire creative energy, get people excited, and create stronger relationships with people around them. That is what we do.

Perhaps the most noticeable trend the pandemic accelerated is one we’ve been practicing for years. Employers are starting to realize the benefit of hiring talent over proximity and are offering remote work as an edge in the war for talent. That said, we can all agree there is no substitute for in-person interaction. So, many firms are turning to short-term rentals for weeks or months-long offsites to drive team building. In fact, 2021 was the first year venture-backed startups in the US spent more on Airbnbs than office rent. With larger companies looking to reduce office footprints across the country, we think this trend is just starting to gain momentum.

In the past, lessors desired longer-term leases to provide certainty. For example, an individual might want a 12-month lease to amortize the cost of broker fees or the hassle of moving. Freed from office spaces, we believe a growing percentage of people might think 12 months in the same place is too long and instead want the flexibility to roam, follow the seasons, sporting conditions, etc. Here we see great opportunity for medium-term stays (1-11 months), which is why we design our spaces to be comfortable for a week getaway or months-long retreat.

These trends are just a few examples of the secular tailwinds driving tremendous opportunity for Stomp Capital and our limited partners over the coming years.