How A Year-Old, New York-Based Hotel Brand Is Taking Miami By Storm
A trendy, year-old hotel brand, Life House, will open a 52-room property at Collins Park on Miami Beach with a soft launch this month. That's to be followed in quick succession by four more Miami locations, and 25 locations nationwide, by year's end.
How can a new company move so fast? Life House is technically a management company that doesn't own the real estate, but partners with independent hotel owners to upgrade properties, institute operational efficiencies and rebrand under the banner of Life House.
"We make it really easy to own a hotel," Life House CEO Rami Zeidan told Bisnow. "Real estate owners want to own real estate like a bond, and sit back on a beach and see the performance."
Life House will typically sign a management agreement or franchise agreement and take over the hotel for 10 to 30 years. The hotel must agree to pay for certain cosmetic upgrades, like high-quality linens and bath towels, and some design changes to align with the Life House brand.
With Life House's model, hotels can get rid of workers like front desk staff, middle managers and housekeeping supervisors. Life House has proprietary software, so guests can book rooms online and check into rooms themselves by swiping their credit card in a lobby. Things like finance and sales are handled by Life House's centralized team, rather than on each individual property. The hotel need only have one community manager on-site — a person who can welcome guests, act as a concierge and troubleshoot.
Housekeepers would self-manage; Life House pays them higher rates than competing hotels, Zeidan says, and incentivizes them with a review system that gives them dings for housekeeping problems but extra compensation for great work.
Zeidan says their system results in a higher net operating income to owners "to the tune of 20% to 40%." Life House can offer cheaper and more flexible terms than if an independent hotel partnered with a major established brand such as Hilton, he said. Fees are determined property by property, but are based on top-line revenue and on the profitability of the hotel, he said, with no other hidden fees.
Life House offers elements of communal, hostel-style travel. Properties offer both private and bunk-bed rooms and communal spaces. Customer data can be used to match individuals with compatible roommates, and a tech platform will allow travelers to meet each other before their arrival.
The Collins Park hotel will include a neighborhood-driven restaurant and bar with Mediterranean influences as well as a rooftop pool and sun deck. The South of Fifth property will be designed to look like an artist’s beach retreat, with a lobby restaurant and bar, a backyard garden and pop-up retail. An 82-room hotel on Ocean Drive is also in the works. These properties were formerly known as the Lord Balfour, the Vintro and the Jazz. Life House is also taking over the Jefferson Hotel in Little Havana.
Life House is based in New York and was launched last year by Zeidan and partner Yury Yakubchyk. It has developments underway in Denver, Brooklyn and Nantucket.
"We now have eight hotels open or under construction and another 10 signed LOIs," Zeidan said.
He said because it is more of a tech venture than a real estate play, Life House was able to attract capital from Silicon Valley that has sometimes eluded other hotel entrepreneurs.