stayAPT Suites, a Matthews, North Carolina-based hotel venture providing long-term lodging, launched in January 2020, just weeks before the pandemic brought the hospitality industry to a halt. One year later, the company has continued along an aggressive opening schedule, with 17 locations planned by the end of 2021 and 15 more under development, according to CEO and industry veteran Gary DeLapp. Early bookings, he said, have trended at 75% occupancy at the first location, which opened in October 2020 in Goldsboro, North Carolina.
The brand’s layout features full-size appliances in the kitchen and a bedroom separated by a hallway, giving guests access to a more residential-feeling experience – a contrast, DeLapp said, to the “all-in-one-room” industry standard.
Looking longer term, DeLapp has an aggressive outlook with plans to complete 100 corporate-owned and 200-plus franchised locations throughout the country within the next five years.
DeLapp talked to HOTELS recently, expressing his optimism about the long-term lodging segment, especially in a COVID-informed operating environment.
HOTELS: Will you continue to own and operate all near-term developments?
Gary DeLapp: We will develop, own, and manage (including for third parties) as well as franchise. We have two corporate owned/managed locations currently open (Goldsboro and Chattanooga, Tennessee) with another opening this month in Raleigh-Durham/RTP, North Carolina, and several others under construction and in development.
We also have five executed franchise locations, two of which are currently open in Alexandria-Ft. Belvoir, Virginia, and Greer, South Carolina, where we manage. The others will be opening in Chesapeake, Virginia, Tallahassee, Florida, and Pensacola, Florida.
We have several other sites in development/permitting: Texas, Florida, Mississippi, Tennessee, Missouri, Alabama, Colorado, Kentucky, Pennsylvania, and Ohio.
H: How much development will be new-build versus conversion?
GD: stayAPT Suites development will be 100% ground-up new construction.
H: How are you going to compete on the distribution side with limited awareness?
GD: We have invested in a talented national and local sales team, as well as robust digital marketing and advertising, social media, and regional/local public relations support. We also leverage direct and OTA booking channels, vertical market partnerships and strategic alliances.
H: What are the development costs (per key), and what is the expected ROI
GD: stayAPT cost per key is approximately US$82,000 per key. Franchise investors can expect levered yields 15% and higher, depending on capital structure and debt terms. There are no conversions to the stayAPT brand.
H: What is the square footage per key versus your competitive set?
GD: Our suites are an estimated 500-plus sq ft. and best-in-class for both size and quality.
H: What are your rate projections?
GD: Depending on the market, we’re experiencing ADRs from US$76 to US$88.
H: What are among your other differentiators?
GD: Two large, wall-mounted Smart TVs (one in the living room, the other in the bedroom); exterior windows in both the living room and bedroom, providing natural light; enclosed/secure open-air courtyard with a built-in grill, soft seating, fire-pit and natural greenery; as well as a lean and resilient operating model with minimal labor requirements.