Meet Bob W. He is the most gracious host you can imagine, but also extremely tech savvy. He will help you deal with any issue that might arise.
Who is this amazing person? Actually, Bob W doesn’t exist. Instead, it is the name of a fast-growing European hospitality company founded in 2018 by Niko Karstikko, CEO, and co-founder, Sebastian Emberger. The brand, according to the Finnish-born Karstikko, “is a technology company that operates a hospitality product.”
Bob W’s mission, he said, is to create a lodging option for the next generation—very specifically targeting 25- to 45-year-old urban middle class travelers. Bob W, said Karstikko, combines the branded consistency and promise of a hotel and the authenticity and functionality of an actual home with kitchens, washing machines and dishwashers.
Karstikko sees Bob W as an organic transition from a legacy of mega-brand companies, such as Hilton and Marriott International, and web-based operators like Airbnb, combining the Best of Both Worlds (thus the name Bob W) through technology.
Karstikko, a longtime Airbnb “superhost” himself, came up with the idea of Bob W when he left his multiple short-term rental apartments in Finland to travel in Asia. He asked himself, “What would happen if an operator was in control of the hardware and software and actually created spaces that exceeded the expectations of a hotel guest?”
WHAT’S THE RECIPE?
What is a Bob W? Now located in 15 cities in nine European countries, including “Bobs” in Helsinki, Tallin, London, Milan, Madrid, Berlin and Athens, the brand comprises full building conversions of what had been aparthotels, hotels and other commercial buildings through leases and management agreements. There is no staff on property, but there is an operations person nearby and a team of third-party cleaners.
What makes it all work, said Karstikko, is the “beautiful technology” of the apps. There is a cleaner app, an operations app and a guest app, the latter in the form of Bob W. That app, using both AI and humans, interacts continuously with guests to facilitate check-in, deal with issues and provide any amenities or services necessary—think a crib, local guidance, an extra pillow and more.
While there are no shared public spaces, properties always offer a nearby place to eat breakfast—with the option of bed-and-breakfast packages. Rates include access to a local gym and the app will help guests navigate the neighborhood, serving as a personal concierge. In addition, previous guests leave notes and pictures with restaurant and activity suggestions.
Bob W, said Karstikko, speaks nine languages (having just added Dutch because of openings in Amsterdam) and is clearly well educated but is a man of the people. He doesn’t sleep or take lunch and answers questions in an average of 80 seconds. “This is for the Airbnb generation that’s growing up— with technology under the hood making it all work so we don’t screw things up,” said Karstikko.
At the end of the day, said Karstikko, “We effectively have the cost structure of a budget hotel and the average daily rates of a lifestyle hotel thanks to the technology.”
TECH DRIVEN, GROWTH FOCUSED
Bob W’s obsessions include cleanliness and sustainability. While the company works with third-party cleaning operators, Karstikko said they are empowered with an interactive to-do list where they can go to different parts of the building—say to bring towels to room 503 or be prompted to change the battery in the TV remotes every six months in every room. Bedding is changed weekly unless the guest opts to pay for additional services. “Our ethos,” he said, “is to create autonomous hospitality.”
All of Bob W’s technology is proprietary through an in-house team that built all the apps as well as the back-end functionality. Running a hotel, said Karstikko, “is like playing Tetris,” referring to the video puzzle game.
With all that technology, there are always local touches in the rooms, including second-hand furniture from nearby businesses. And the company is climate-neutral, meaning that it has considered all climate-warming gases in its accounting and offsetting, not just carbon.
The brand has its own reservations system and booking engine with 55% of bookings direct in 2022 (the other 45% through OTAs). In addition, since 100% of guests use the app to check-in, they are “captured” by Bob W and tend to book direct the next time.
By becoming a member of Bob W’s Inner Circle loyaltyprogram, guests automatically receive a 10% discount on Bob W’s best available rates. With more nights booked, the discount rises to a maximum of 15%. Inner Circle members also enjoy other offers and benefits, such as welcome treats on arrival. The average length of stay is six nights.
Karstikko intends to keep Bob W 100% asset light. He has partnered with multiple real estate players and sees tremendous opportunity across Europe and in North America and elsewhere (he went to college in South Carolina and lived in the U.S. for years.) It is very simple and inexpensive for Bob W to expand, said Karstikko, because the only employees it needs are the operations manager, a juniorposition, and a regional general manager in a new country or area.
The company has done three M&A deals and is open to more, with Karstikko calling that strategy “a very successful track for us.” In 2022, Bob W acquired Estonia’s largest short-stay serviced apartment operator, Estonishing Stay Apartments, and Finland’s KOTI Hotel. A year later, Bob W made its entry into the German market with the acquisition of Charly Hospitality.
While Bob W is operationally profitable in all of its markets, he said, it is looking for capital, but on its own terms.
Ultimately, said Karstikko, Bob W is about solving the problems of an industry that is ripe for rethinking its entire business model. “Things have been standardized in a certain way for so long,” he said. “It’s time to ask questions like is a front desk necessary or do we have to change the sheets every day?”
Story contributed by Harvey Chipkin.