If Airbnb and HomeAway are for alternative accommodations everywhere (mostly holiday locations like the beach) the Stay Alfred is for family-friendly alternative accommodations in urban areas.
Based in Spokane, Washington, Stay Alfred is a vacation rental platform with a very particular niche: family-friendly urban dwellings. Since its founding in 2012, Stay Alfred has steadily positioned itself in the market as the go-to platform for apartments and condos in cities for those who want something that is family-friendly yet in the middle of business districts.
The idea has definitely reached the hearts, and financial sides of many investors as Stay Alfred has managed to raise quite a bit of financing in the short seven years of its existence. Today, the company manages more than 400 short-term rentals in busiest downtown areas in about twelve major U.S cities, and it has plans to grow its inventory even further in the years to come.
Who Is “Stay Alfred”?
Founded by Jordan Allen and Conrad Manfred, Stay Alfred is a play of words that combine those two names. Although it’s true that Conrad left the company and went on to do other things, it’s very unlikely that the “Stay” in Stay Alfred was for him. Innovative companies such as Stay Alfred can only be formed by people who think outside the norm.
Jordan is one such person. An insightful out of the box thinker, Jordan took the time to study the burgeoning vacation industry and found a gap that no one had seen nor thought to fill. That is why Stay Alfred has enjoyed such a meteoric rise in what, to many, might have seemed like an already saturated market place with dominant players such as Airbnb and HomeAway.
Unlike most of his competition, Jordan’s Stay Alfred is laser-focused on providing only short-term rentals for people who want to stay in downtown locations in any major city in the U.S.
As things stand right now, Stay Alfred is doing very well for itself with an estimated revenue of about $66.5 million a year and almost 230 employees. The company has taken what seems like complete control of its highly specific niche providing an average stay of 4.1 nights for 4.4 people.
It’s the one platform most corporate travelers go to when they want larger spaces that offer vacation rental amenities with hotel-like standards at affordable rates.
The idea behind the company’s business model is they go into a particular city, test the market, and if they find it viable they expand. So far, the company has found that this particular kind of short-term stay is in short supply in most cities in the U.S and that is why the platform is doing so well.
Another thing that makes this company so unique is that Jordan does not manage vacation rental homes in the traditional sense of things. He prides himself in providing corporate professionals a family-friendly location to stay within a downtown urban setting; which can be difficult to do.
Recently, the company has gone into a different kind of business model: they lease out entire apartment blocks so that they can control the guest experience!
Instead of leasing just one or two units, the company has decided to make the whole thing something close to a hotel experience whereby they own and operate the entire block. This had given him the flexibility he needs when it comes to dealing with corporate sales, government contracts, signage, and marketing.
Of course, the problem with this model is that the company is responsible for the long term leases regardless of whether or not they can maintain a reasonable occupancy rate.
The benefit of this kind of model is that Stay Alfred only has to cater to the guests as opposed to the owners and the guests, which means that the guests get better, more personalized service. On the downside, it means that Stay Alfred needs quite a bit of funding.
Stay Alfred’s Funding
This particular model has pushed the company to be very strict and creative as far as revenue management is concerned. As such, they don’t make any reckless financial decisions. This has led to the company as a whole is very attractive to financiers as is evidenced by the amount they have raised so far:
- In 2017, Stay Alfred raised $15 million in its Series A investment round: The company intends to use these funds to scale its business across even more cities in the U.S. It’s also seriously looking at launching into the international market in a couple of years or so.
- In 2018, Stay Alfred raised $47 million in its Series B investment round: This has helped its apartment acquisition numbers rise to well over 2,000 from the previous 400 apartments in just a few cities in the U.S.
Challenges Hindering Stay Alfred’s Growth
With this kind of model in play (one that clearly works) you might be wondering what could actually stop this company from growing at a much faster. Especially considering the fact that they seem to have financiers lining up to give them money. Well, there are a few issues with which they have to contend:
- City laws and regulations: Every city has its laws and regulations as far as short-term stays are concerned. Some cities such as Portland and San Francisco actually tried to completely ban short-term stays. Thankfully, these places have realized that this route won’t rid the city of these housing options but only drive them underground.
- Google foraging into the vacation rental industry: Let’s face it, Google is a force with which to reckon no matter what industry you are in at the moment. Google is in the process of entering the vacation rental market and has already partnered with big players such as TripAdvisor and Bookings.com. This means that there is stiff competition to come.
As things stand today, Stay Alfred is in very good hands and is projected to be a huge industry player with a highly specific niche, especially since the funding keeps raining into their coffers.