About a year and a half since making a splash in the United Kingdom's serviced-apartment sector, Berlin-based NUMA Group is launching a new brand strategy as part of its growth push across Europe.
The tech-forward NUMA Group operates an estimated 10,000 boutique accommodation units in 42 cities and 15 countries across the continent. The company says its managed assets are valued at more than €2.5 billion and its portfolio stretches across major European cities such as Berlin, London, Paris, Rome, Milan and others.
In July 2024, NUMA Group acquired lifestyle aparthotel and serviced apartment brand Native Places from U.K.-based Native Holdings. Now NUMA Group has finished the integration process of Native Places and is rolling out the brand renamed Native by Numa alongside its established aparthotel and serviced apartment brand NUMA.
NUMA Group hopes to scale both Native by Numa and NUMA via its in-house technology platforms, which CEO and co-founder Christian Gaiser said lie at the heart of the company's profitability and reputation among investors.
In an interview, Gaiser said that NUMA Group's back-of-house capability has been developed to “optimize asset value and drive growth in prime European cities.” Native Places has 10 operating hotels, seven of which are in London, two in Manchester and one in Glasgow. Gaiser said NUMA Group plans to expand the Native by Numa brand across Europe, with initial targets including Spain, Athens, Dublin, Naples, Nice, Paris, Vienna and Zurich.
NUMA Group’s multi-brand strategy will position Native by Numa as its premium brand, one targeting Europe's top 25 cities that have high barriers to entry and attract investors seeking added value and margins stemming from almost complete digitalization.
He said properties will have “an exciting [food-and-beverage] offering and a higher price point” that also will attract investment.
“The model ultimately is flexible,” Gaiser said. “What we want is a building with a certain character and brand appeal, both for the building itself and its location. It does not have to be a new development, which are currently more challenging.”
Fueling it all is Numa’s technology platform.
“We will employ another higher level of IT integration. … There is a lot of movement in real estate verticals, which brings in a beautiful level of complexity, but you need agility. We have that from tools we have successfully rolled out,” Gaiser said.
The ideal property for Native by Numa would be between 60 and 200 rooms in either highly rated locations or in up-and-coming ones, Gaiser said.
“A lifestyle offering connected to a local vibe that also adheres to a cosmopolitan crowd,” he said. “In terms of quality of fit-out, they will be one to one and a half categories above our other hotels.”
Gaiser said demand would be a blend of leisure and business, with a strong corporate pull.
The original Numa aparthotel brand has a larger range of room count, Gaiser said. The higher end of the range has between 260 and 280 rooms in such cities as Munich, while the smallest has room counts in the low teens in destinations such as Barcelona and Venice. In some European cities, it's practically impossible to open new larger properties, he added.
Tech-forward for modern hotel guests
Gaiser's background — and those of his partners and senior team — includes past roles in e-commerce, FinTech and “robo advising” financial planning. He said NUMA Group's investors now see in hotels and hospitality the value and returns they initially targeted from education- and medical-technology startups and rollouts.
“The hotel industry? Often stuck in the Stone Age, either outsourcing tech or dependent on counsel from business advisories, or simply solving [any problems] with manpower, which is biting them now,” he said.
Gaiser predicted 80% to 90% of a hotel could be automated, which he added would drive profitability much sooner. The company's portfolio claims “industry-leading gross operating profit margins of 55% to 60%,” Gaiser said. Such an operating model would also assuage the labor issues that the hotel industry regularly struggles with.
“What are the things you do not need? There are 50 applications one could make to make operations more efficient. We can open [in] a new city with just two team members,” he said. “And the demand side is changing, too. Millennials growing up with Amazon and Spotify. They feel entitled, and now coming is AI, which we have heavily invested into.”
For full-year 2024, demand for NUMA Group's portfolio exceeded more than 1 million room nights sold. At the same time, the company is looking at improving guest communication and better ways of forecasting demand.
“We’re just getting started with that we see as the long-term growth catalyst for the entire industry,” he said.
NUMA Group has made acquisitions to spur growth but Gaiser said that was not easy. The real work begins post acquisition with the of aligning both companies' cultures.
Real estate partnerships and repeat business dealings are the preferred investment model, but with so many companies vying for the same properties, destinations and debt, gaining the trust of partners takes time, Gaiser said. For now, NUMA Group is focused on building a strong balance sheet of valuable buildings and robust operations.
He predicted that Numa and Native by Numa will be reputable hospitality brands in the years to come.
“We believe we are going where the market is going. Luxury, yes, but with top-end value created by our technology,” he said. “Our guests are not necessarily bargain hunters but want fair value for money. We’re not cheap, but we provide a hotel where you pay for what you need.
“We take out the fat, and such modern minimalism resonates well. We have one partner from the fashion industry, and they tell us the drastic change they’ve seen in how people are spending money. [Those guests] want to own less things and have more experiences.”
Investor backing
Gaiser said Numa and Native by Numa have attracted three main categories of investors:
- Global firms such as BlackRock and Miele who diversify their investments and like NUMA Group's disruptor mindset.
- Midsize to large family offices who have operated properties themselves or are repeat partners.
- individual owner-operators.
"One of [Miele’s] founders’ sons is on our board,” Gaiser said.Other NUMA Group investors include Cherry Ventures, DN Capital and Soravia Group.
He said two-thirds of his properties are fixed leases, the other third, hotel management agreements.
“In Germany, we are happy to do fixed leases,” Gaiser said, noting in Germany there are limited alternative choices.
“Europe has to go franchise. It is so fragmented, and operating costs keep increasing. You have the choice of bringing in the big boys or going via IT,” he said. “Investors who have been looking at the hospitality space for some time like our model as we have the ability to change the nature of the industry.”