Founders' Stories|
A new digital concept for hotels
Limehome is a new digital hotel concept, which operates designer apartments with the quality standards of a four-star hotel. Situated in prime locations in Germany, technology enables Limehome to operate with no staff on-site, which drives margins and has the potential to disrupt the highly complex hotel industry. Co-Founder Josef Vollmayr talks about his aim of building a mass-market hospitality brand.
DR JOSEF VOLLMAYR, CO-FOUNDER, LIMEHOME
Before founding Limehome, I spent five years on the road working as a McKinsey consultant which gave me the opportunity to experience a thousand nights in hotels around the globe. They were very inefficient and very old-fashioned. I like design and joined with another ex-McKinsey consultant who helped shape the digital strategies on large corporations to bring the industry into the 21st century with a new concept.
Together, we have built an operating platform which fully digitises and automates all the processes on our sites, including booking and invoicing. Our suites have digital locks to allow users to enter the suites at any time of day or night without the need for receptionists.
This not only takes out 45 per cent of personnel costs, but also helps us to source and operate very small properties. Luxury hotels which have very fine margins need 100–115 units just to cover the overheads with 35 employees on-site, but we don’t need so many because we don’t have any staff. This helps us to grow very quickly and source very good locations in larger cities, but also to operate very small hotels in smaller cities.
Our aim is to become the mass market brand for the modern traveller in a few years
In terms of revenues, we have fine gaps between signing units and then operating them, and we also develop the properties together with the landlords and the owners. Already, we have signed up 500 units with a target of 600, and we are operating around 150.
The hotel business is not very profitable, especially with luxury hotels which operate on tiny margins of around 5 per cent. Even the best European operator which is in the mid-range has operating margins of only 20 per cent. All the properties we are already operating have margins of more than 20 per cent and average 33 per cent, which is feasible because of our infrastructure and technology.
We did a seed round of fund-raising at the end of 2018, and squeezed in Lakestar after very good discussions and they invested. Recently we raised more with convertibles and now have EUR11 million from eleven investors. Our aim is to become the mass market brand for the modern traveller in a few years, and I think we have a very good foundation for that because we have a great business model.
