Preparing for a busy 2021, pop-up hotel company WhyHotel recently announced plans to open WhyHotel Midtown Miami and WhyHotel DC National Mall in May and June, respectively. The group, which works with residential buildings to run temporary apartment-style hotels during their rental phase, has proven to be relatively resilient throughout the pandemic, partly due to strong demand for long-term stays. Hotel editor Christina Jelski spoke to WhyHotel co-founder and CEO Jason Fudin about WhyHotel’s unique model and why there are still opportunities in the urban apartment hotel sector.

Jason Fudin

Q: Can you add a little more color on how a WhyHotel popup works and how it differs from other apartment hotel concepts?

A: When a developer builds a skyscraper, they deliver all of the units for lease, but it can take a year or two to find the residents. What we generally do is take about a hundred units, set them up, and when the building opens for residents to move in, we start running a furnished, hotel-like product out of that spot. And the way the structure works is that we get profit sharing with the developer. You will receive a percentage of the profit we make during this period. And we don’t actually sign actual leases at any market price.

Real estate is cyclical, and hospitality in particular is very cyclical. Our business is based on this cyclicality. The whole model is based on flexibility as we have the flexibility to get units in and out of the building depending on how things are going, as well as the developer. And that served us incredibly well in Covid.

Q: How has the pandemic affected WhyHotel’s business?

A: I’m not going to say that Covid wasn’t very difficult. In the beginning we had layoffs and there were a number of pop-ups that never opened. We probably planned on opening about one pop-up a month for the last year, so it was quite a number that didn’t open, but the ones that were profitable. We had four who got into the pandemic, all of which took their natural course, with the last of them still running in Northern Virginia right now. And those pop-ups switched from mostly temporary stays to longer term stays as these are places with full kitchens and full living spaces.

We have a lot of people who needed a temporary home. While we were before Covid we were probably about 70% temporary, after Covid we were 70% longer than 30 days. And that has helped us keep the occupancy rate at over 85% across Covid. What we are seeing now is a transition back to more temporary stays. It begins to rebalance.

We are incredibly optimistic about the future. You have all of these customers who have become even more accustomed to alternative and apartment or residential style accommodation during the pandemic. So it creates a perfect storm for us.

Q: Most WhyHotel popups are in densely populated urban markets. Is this still part of the future corporate strategy?

A: We have always been oriented towards urban development, and today it is no different. Our product works very well when we have high density [of units] in high density buildings. And I really think we’re going to see a goddamn flashback of urban travel and urban living. Cities have outpaced non-urban areas in growth over the past 30 years. And while there are so many trends that have been accelerated by the pandemic, this is the only trend that has been reversed. And we think it’s just the other way around because who wants to be with a group of people in a pandemic?

There has been this long march towards urbanization and we believe that once it is okay to be with a lot of people that march will continue. And on top of that, you will have a lot of pent-up demand and a lot of people just waiting to return to the cities.

Throughout human history, cities always return when there has been a version of a pandemic or something that caused people to flee cities. And we expect the same to happen once this pandemic is over.

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