By Meghan Hall
Corporate housing and the greater short-term accommodations sector has come a long ways since the 1980s and 1990s, with more companies than ever looking for ways to innovate and expand the definition of short-term housing. Seattle-based RESIDE Worldwide has been at the center of the Puget Sound’s alternative accommodations industry for more than 30 years, and while many of the leisure-based companies are struggling in the current climate, RESIDE—and corporate housing—is holding stable thanks to both a diverse portfolio and the more consistent nature of corporate housing.
“Our idea of alternative accommodation, frankly, is anything that isn’t a hotel,” explained RESIDE’s CEO and Co-Founder, Lee Curtis. “And even then, hotels have gotten very clever with the different types of products they offer. We are trying to create a single point of contact for companies to have their employees use our product—any style of product—that requires a bed and a door and a lock, which is aggregated through our services.”
RESIDE originally began as Aboda: a traditional corporate housing provider that sprang from an effort to house Microsoft’s numerous interns as the company was taking off. “From that genesis, the corporate housing seed was planted in Seattle, and Aboda has since then really been the perennial leader in Seattle,” said Curtis.
As the Puget Sound commercial real estate market evolved—bringing more technology and big-name companies, as well as a greater need for different housing products into the picture—RESIDE began diversifying its offerings.
“The typical corporate offering is the more vanilla apartment…For many years, I think that is what traditional short-term rentals or corporate housing looked like,” added Curtis. “But I think through the requirements of different styles of housing, and the compression of houses in places like Seattle, we started to change the way we delivered inventory.”
Over the past ten years, the advent of online travel agencies—such as Airbnb, Expedia, and the like—has meant demand for alternative accommodations have grown exponentially. According to Curtis, the market has gone from a $40 billion to $120 billion industry before the current pandemic hit, a signifier of their widespread popularity.
RESIDE evolved alongside the industry, branching out and diversifying its portfolio in a number of ways over the years.
“Equally important [to more demand] was suddenly corporate America was looking at these new product types as viable accommodation options for both long- and short-term travel, for things outside of transferring projects,” stated Curtis. “We built a program that was specifically driven towards B-to-B procurement purchasers, and it was driven upon the idea of aggregation, curation and advocation.”
In addition to leased corporate and service apartments, RESIDE has dipped into co-sharing and micro-housing options, student housing, both short- and extended-stay hotels, and managed properties. For example, added Curtis, during the summers RESIDE will work to prep vacant dorms at the University of Washington, revamping them for incoming interns for the region’s blue-chip technology companies. To date, the firm is also able to leverage more than one million accommodation options in over sixty countries all around the world.
“[We] saw this as an opportunity to create a new brand that was a little more pliable in this emerging alternative accommodation space,” said Curtis. “[We] didn’t want to be pigeon-holed, because what we saw happening was this evolution of the short-term rental space blurring with all of these different choices.”
Curtis estimates that in Seattle alone, RESIDE commands about 85 percent of the Puget Sound market. In the wake of COVID-19, the firm is remaining stable, even as many other short-term rental companies, from Airbnb to Stay Alfred to Lyric, are struggling or have closed their doors. The problem with many of those firms, emphasized Curtis, is simply how the short-term, leisure-based market operates.
“[The B-to-C companies] were all moving in the exact same path,” he said. “…It was supported by the growth of the short-term market, but all of them thought if they could aggregate through master leases big piles of inventory in key markets, they could steal some of the short-term markets from hotels.”
While hotel occupancy has plummeted nationwide, with nearly 80 percent of hotel rooms vacant at the beginning of April according to STR, a global hospitality analytics company. Between March and April, Seattle’s hotel occupancy declined from 73.3 percent to 19.5 percent. RESIDE’s portfolio has been faring better, according to Curtis. At the moment, the company is seeing about 60 percent occupancy across its portfolio, and RESIDE has some 700 units in Seattle still occupied.
“Long term, the corporate housing market has been less impacted because of the nature of the stay, which is typically non-discretionary,” said Curtis. “It is people that have either transferred to an area, or now they cannot move out…We’re running significantly better, and it’s because it is a long-term stay.”
To stay on top of their businesses, companies are taking advantage of lease expirations, seeking short-term relief from landlords and cutting down on inventory, thanks to operational leases which provide more flexibility.
Curtis believes that the corporate housing sector is stabilizing, but that it will be a long time before growth resumes. For its own assets, RESIDE has implemented increased sanitization and disinfectant standards and implemented virtual tours and remote communication with guests. Other factors, such as steady and strong wireless connection, have also become absolutely pivotal in a time when everyone is working from home.
“I don’t think there will ever be business as usual, not any time in the next couple of years,” said Curtis. “There is going to be a social response to the distancing, the travel, and a risk tolerance that is yet to be understood. Without a vaccine that is locked down and a cure, I think people will be dipping their toes into the water…Some things will take longer to come back.”