With interest in branded residences and apartment-style hotels continuing to rise for both travelers and developers, the industry can expect to see more options in the space — and not just at the luxury price point.
Nate Siehr, who spent over a decade in hotel development at Marriott International, co-founded The Big Key Group to work on projects that meet modern traveler interest. The company's first project, the Ambar Residences Orlando, is a third-party-managed Apartments by Marriott property currently underway. All of the units are for sale, Siehr said.
"It's not a hotel room stretched into a longer-stay concept. It is a true residential format designed for the way people actually travel today," Siehr said on the CoStar New Hotels Podcast.
According to the property's website, those who purchase one of the 322 fully furnished, move-in ready units can stay there for up to one month each year. They then have the option to place their residence into the property's rental program. There are studio units along with one-, two- and three-bedroom units.
The concept provides "ownership without the operational burden," Siehr added. That's the value proposition Ambar offers, and it's a "direct response" to how travel behavior has evolved faster than hospitality projects have.
"People are staying longer. They're traveling in larger groups, multigenerational travel has become much more common," he said. "More travelers now want a stay that feels residential — not because they want something informal, but because they want something that actually works for their real life."
He added that the industry has already seen some of this evolution of travel behavior with the rise of soft brands, citing how Marriott's Autograph Collection, Hilton Curio, Hyatt's Unbound Collection and Kimpton all grew.
Another part of this evolution, especially during the pandemic, was the growth of short-term rentals.
"Airbnb helped prove that people value that space and flexibility, but it also highlighted the trade off, which is a lot of inconsistency," Siehr said. "What I think that we're trying to solve for with our company moving forward, and I think that a certain degree of the industry as a whole is trying to solve for, is the space of a home combined with the reliability, the standards of a service platform of a global hospitality brand."
Many residential-style lodging products are at the luxury price point, but Siehr said he's hoping his Ambar project is the first of a wave of development that targets upscale and upper-upscale buyers. There will always be a market for luxury residential buyers, but Siehr said he sees interest growing across the board.
"Not everybody that wants to pursue a branded residence is in that highest echelon of income earners, and so there should be a product for them, too," he said.
The Big Key Group is starting in Orlando, which is one of the most visited cities in the United States. The city saw more than 75 million visitors in the last two years and is seeing a widening length of stay and healthy mix of business and leisure. And Siehr said that other markets that see this same level of multi-generational travel and repeat visitors are also primed for new residential-style lodging projects.
With these types of projects offering a hotel-level experience, Siehr said third-party hotel managers have a huge opportunity to step in to provide their service. Ambar's operator is Coury Hospitality, and Siehr said the company was selected for its experience with soft brands.
"The executors of the experiential elements in the soft-branded space have primarily been third-party operators, and so it's a natural fit for them to be the ones that are going to execute on behalf of the development-owner community on the types of experiences," he said. "They're going to create demand for those branded residential products."