Lamington Group, the family owned real estate investment and development company behind ‘hometel' brand Room2, has launched its Room2 Lite budget concept.
The group said it is already in negotiations with landlords who are attracted to the renewed long-term hybrid lease structure, which includes a guaranteed fixed rent portion plus a rent portion pegged to performance.
Room2 Southampton, the group's flagship offering, has continued trading since the government-imposed lockdown, achieving monthly occupancy rates well above 50% while accommodating key workers.
Room2 Lite adapts the Room2 hometel model, the brainchild of brothers Robert and Stuart Godwin, former British Olympic development sailing team members. The concept combines elements from Airbnb, serviced apartments and boutique hotels in an offering designed to appeal equally to corporate and leisure guests and those seeking alternative forms of residential accommodation. Designed to give budget travellers more value for money, Room2 Lite guests will benefit from a flexible pricing model.
Robert Godwin, managing director at Lamington Group and Room2, said: "The Covid-19 pandemic has caused disruption on an unprecedented scale and the hospitality industry has been one of the most affected. Many hotel landlords who previously thought their leases offered them protection suddenly found themselves at the mercy of tenants who were either unwilling or unable to pay, even those signed with strong, seemingly well financed hotel brands. As a result, whilst our near term focus continues to be working with all our stakeholders to manage our way through the crisis, we have accelerated the launch of Room2 Lite, recognising that, now more than ever, the UK budget sector remains ripe for disruption, particularly at a time when landlords are looking elsewhere to avoid being stuck with unfavourable reduced terms.
"Room2 Lite was originally borne out of our view that UK budget hotels are underserved by operators in the extended stay and design-led segment, and that there is lot of untapped potential to create truly memorable experiences. The market is dominated by large corporates, unable to pivot quickly in light of a changing economic landscape and changing consumer demands.
"Our hometel model has held up extremely well in recent months and proved its resilience despite the worst of economic cases. We now see a real opportunity to replicate this success in the budget hotel market, setting a new standard for consumers, while offering landlords a hybrid leasing model which aligns their interests with ours, and is resilient enough to drive sustainable returns over the long term."