• Can you give us a condensed history of Lamington, and then your involvement with the company?
“We’re a family owned business, set up by my father 50 years ago. Lamington Group is a real estate investment company, focusing on residential lettings, serviced apartments and aparthotels. We currently have more than £50 million of development projects in the pipeline and employ over 30 people across the business.
I’m managing director of the business, with a background as a trained economist, and my mother acts as chairman of the companies. We have more than doubled in size in the past six years since I began this role and have an ambitious target to operate 1,000 hotel/serviced apartment units by 2025 across the UK.”
“Room 2 was set up as Lamington’s new apartment hotel brand in 2016. Each property is individually designed and branded, to reference to the unique character and history of each location it is set in. We won an award for one of the fastest growing private companies in Europe 2015 by Inc5000.”
• What is the guest demographic for Lamington properties (aside from Room 2)? has it changed over the last few years as consumer and investor awareness has improved?
“Lamington has a stable corporate client base which has grown with the company. Clients return for Lamington’s improved offering, flexible terms of business, competitive rates and attentive customer service. We have also seen short stay leisure grow as a portion of our business as Airbnb continues to boost consumer awareness of the alternative accommodation/serviced accommodation sector. Whilst Airbnb stays deliver unique experiences every time, I believe the investor opportunity lies in experience-rich, carefully designed, purpose-built serviced accommodation, which can be delivered on a greater scale and maintain core hotel-like guests services that clients still seek.”
• What was the inspiration for the Room 2 brand?
“I’ve always really admired the design-led hotels of east London and NYC, in particular The Hoxton, Ace Hotel and The Standard. I love the strong design aesthetics, the fostering of guest and non-guest community, and the removal of the expected hotel norms. These hotels are pushing the boundaries of conventional hospitality, and exciting and engaging people like never before.”
“At Room 2, I wanted to create a community-on-the-go, with creative spaces that encourage new thinking but are also fun to be in and connect in. We want to reinject romance back into travel, and make memorable experiences from the very first touch point through to unpacking bags at the end of the stay. We’ve created a space for people to kick back in or just as easily work from, and that’s something I think we’ll start to see much more of in the future.”
• You have opened Room 2 in London, to be followed by Southampton. How do you decide on new locations for the brand and where would you like to go next with it?
“We see Room 2 with nationwide potential and are considering all UK city central locations. In particular we see great opportunity to enter markets where hotel owners and/or operators have underinvested in their assets, and not shown the vision of late to excite the modern traveller. Their product has fallen behind the demand of today’s guests, who are out there looking for richer and more fulfilling experiences. Our clients who stay with us recognise and appreciate the refreshing alternative of a creative space to stay, which opens up their thinking in different ways. There is a huge opportunity for Room 2 to take a leading role in this space, and we are both considering and inviting purchase and partnership opportunities across the country.”
• How much impact do you think Airbnb and similar have had on your business? Do you think aparthotels aimed at younger guests are more resistant to the “Airbnb effect” than traditional serviced apartments?
“We share a common goal with Airbnb and the like, in wanting to deliver unique local experiences, and help guests immerse themselves into their surroundings. We believe these stays are richer in experience and more memorable. While Airbnb is a competitor in this ‘experience accommodation space’, it is not a direct one to us. Room 2 delivers a far wider reach of guest services, and consistent standards that people can rely on each stay.”
“The millennial market is more willing to try new experiences and we are certainly designing our hotels with them in mind. They expect quality design, flexibility and connectivity. They are less concerned about space, and more about what the stay can do for them. Whether this means encouraging creative thinking, inspiring them to do or try something different, or meeting like minded travellers to broaden their horizons. We are investing in the forward thinking buildings as I believe this is more future-proofed with current trends than serviced accommodation that does tend to be very generic across operators today, and is therefore more vulnerable to the ‘new experience’ Airbnb impact. At Room 2, guests will also soon be able to remotely check in, and open their rooms with their mobiles. Saves the waiting around on the street corner for the Airbnb host to arrive!”
• In your experience, are lenders more comfortable with an aparthotel model than serviced apartments? Is it easier to secure finance for an aparthotel?
“We have strong support from all of our existing lenders, who recognise the company’s strong experience in real estate development and investment over 50 years. Serviced accommodation has been easier to raise finance as crucially the value lies in the residential use (if C3 planning), whereas the aparthotel is still a model which the high street lenders have less comfort with and there is a higher perceived risk. Compared to straightforward hotels lending, there feels to be a hesitance but not reluctance, on some of the larger institutions’ behalf to lend on aparthotel assets, but I sense this is definitely improving. We recently secured one of the first aparthotel loans from potentially one of the safest lenders on the market. The sector is an exciting alternative to the vast hotels market, and so long as the asset has strong fundamentals of being in a key location, with clear demand, a quality offering and experienced management, then there will be a lending market out there.”
• Where do you see Lamington and Room 2 in five years’ time, in terms of unit numbers, locations and new brands?
“We are firmly focused on the growth of the design-led Room 2 and a new sub brand. We have a committed pipeline of 200+ units over three sites at the moment, and have a target to increase this to 1000 in the next eight years. We are looking for lending and landlord partners to work, and I invite anyone to contact me on r.godwin@lamingtonuk.com with any queries.”</p
