The first time I heard the term “crowdfunding” was in reference to Pebble Technology’s Pebble smartwatch.
The wearable technology was hailed as the next step in the evolution of mobile technology. Featuring a black-and-white e-paper display similar to that of the Kindle e-reader, the Pebble would tell time, track its user’s physical activity, display incoming text messages or calls from smartphones, and more.
The premise was genius, but the developers lacked the funding to get it off the ground. So they did what any tech-savvy entrepreneur does these days: turn to the Internet. They listed the Pebble on Kickstarter in April 2012 asking users to fund the prototype through its launch. In return, pledgers were promised first dibs.
Consumers took the bait, and now Pebble is one of the most highly rated smartwatches on the market.
Countless other products have been pushed across the finish line in similar efforts on Kickstarter and its peers Indiegogo, Crowdfunder, RocketHub and more. I’ve only pledged resources to one: the horrifically-offensive-yet-amusing Apples to Apples card game clone Cards Against Humanity. (My good-humored wife was the lucky recipient of an expansion pack in her stocking last Christmas.)
With funding ripe for the taking, it wasn’t long before some intrepid hotel developers took notice. The movement has been slow going, but there are some notable trailblazers such as Shel Kimen. Founder of Collision Works, she’s crowdfunding a 45-room boutique hotel built from shipping containers. (You can read more about it here.)
In a somewhat different twist, Kittridge Hotels & Resorts is crowdfunding the first ever existing hotel. Announced Wednesday, the company is looking for investors to pledge no less than $10,000 through RealtyMogul.com for an ownership stake in the 163-room Hard Rock Hotel Palm Springs.
Those who bite will not only be in the enviable position to brag about their “little place in Palm Springs,” but they’ll also be privy to several property perks, including a 25% discount of the hotel’s best available rates, $50 per year in food-and-beverage credits, free use of the “owner’s cabana” and free room upgrades when available.
It’s an expensive proposition if you ask me. Those with enough disposal income to toss at the opportunity could undoubtedly spend less money on a premium hotel experience at the Hard Rock Palm Springs or elsewhere. And for those with an insatiable penchant for real estate, better value might come from vacation timeshares. (At least there you’re actually able to stay on property instead of having to pay extra for the privilege.)
It should be noted that Hard Rock International has nothing to do with the crowdfunding. The hotel is owned 100% by Kittridge, whose goal is to operate and stabilize the hotel before reselling the property. Investor distributions are projected to start after the first six months of operations post-closing and will occur every quarter thereafter.
Will the concept take off? I have a difficult time believing so unless the perks improve for investors—or if the real estate proposition itself proves lucrative.
If nothing else, the idea certainly is an interesting one, and I applaud the creativity. It worked for Pebble at a time when many didn’t think it would. Maybe that will be the case again here.
Now on to the usual goodies …
What’s making me happy this week?
A CitizenM within a domestic flight of my front door. I’ve written about this stylish, tech-savvy brand before (see “What’s making me happy this week” in my 14 February column), but my deep-seated appreciation was always tempered by the lengths to which I had to travel to get to one.
But no longer. The Amsterdam-based brand opened its first hotel in the U.S. off of Times Square in New York. Odds are I’ll be checking rates the next time my travels take me to the city.
Stat of the week
$1.8 billion: Digital ad spend by the Priceline Group during 2013, up 41% from the previous year. Interestingly, 90% of that money goes toward converting traffic on Google.
That one-sided approach is no fluke, CEO Darren Huston told Bloomberg. “For Facebook and Twitter, we have endless amounts of money,” he said. “But we haven’t found anything there.”
Quote of the week
"Our decision was based on consumer demand and also on the understanding that most business travelers now bring at least two devices: a phone and then either a laptop or tablet.”
—Billy Cueto, director of rooms at the Four Seasons Westlake Village, which 18 months ago introduced a tiered Wi-Fi service.
After years of debate over managing the costs of Wi-Fi, it seems the tiered pricing model has won out—at least in the full-service segment. I have mixed feelings. As a guest, I’m irked every time I have to pony up $15 just to sign on. But as a reporter, I’ve spoken to enough hoteliers to know the significant cost burden they’re facing. It’s a no-win proposition, really, but the tiered pricing model gets closest to satisfying both sides.
Reader comment of the week
“It just amazes me how short sighted hotel managers are. ‘Omni Hotels & Resorts offers tiered service at about half of its properties. ‘Deluxe’ (3mb) service is complimentary for all Select Guest members and $9.95 per day for non-members. ‘Premium’ (6mb) service is $4.95 per day for Select Guest members and $14.95 per day for non-members.’ After 4 days at $9.95 or 3 days at $14.95 it would be cheaper for a hotel guest to get Cricket Wireless Broadband and have the rest of the month free from hotel charges. What amazes me is not only do these hotels charge in the first place, the prices they charge border on price gouging and explains why so many business traveler have moved to the Limited Service and Select Service Hotels.”
—Reader “djaurand” expressing frustration with the full-service segment’s pricing models for high-speed Internet access as reported in “Tiered Wi-Fi emerges as new industry model.”
Email Patrick Mayock or find him on Twitter.
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