Poddy time: Venice-based pod hotel startup leases first space
Stay Open, which provides stackable bed capsules, closed a $2M funding round
Stay Open, a Venice-based firm that wants to convert existing commercial real estate space into pod hotels, closed a $2 million funding round and inked its first lease.
The company signed a deal for a live-work space at 11 Brooks Avenue in Venice, according to the Los Angeles Business Journal. Stay Open will use the property as a showcase for its concept.
Pod hotels feature small enclosed capsules, typically the size of a bed, stacked atop and beside each other to maximize the number of rentable units. Amenities are typically limited, with the emphasis on affordability. The concept originated in Japan, but has spread to other parts of the world.
For Stay Open, converting existing properties to pod hotels reduces costs and the risks associated with ground-up development.
Co-founder Steve Shpilsky told the Business Journal he saw retail spaces for rent in areas that would be ideal for a hotel, but where it would be too expensive or difficult to build one.
“Even pre-Covid being in the world of hotel finance and development and working with the brands, there’s so many hurdles and barriers,” he said. “It takes a long time and costs a lot of money, and the development process is risky.”
In December, Simon Baron Development secured a $30 million mezzanine loan for its ongoing work to convert the notorious former Hotel Cecil in Downtown L.A. In addition to a boutique hotel, the plan had initially included a 301-unit micro apartment. But those plans fizzled.
In late 2018, Hilton launched a micro-hotel brand Motto by Hilton. A year later, it said it would open a branch in Brooklyn.
The pandemic has been disastrous for the hospitality industry, but demand is expected to remain more consistent for lower-priced accommodations. Extended Stay America, for example, has better maintained its revenue streams than the wider market. [LABJ] — Dennis Lynch