Mint House reports some eye-popping performance metrics comparable to premium hotel brands. No wonder Allen Smith, the former CEO of Four Seasons Hotels & Resorts, has joined the startup’s board.
Mint House is seeking a back door to Airbnb’s market with a business travel focus. The New York-based startup is making apartment-style lodging with hotel-like amenities popular with corporate workers who would otherwise stay at an “upper-upscale” hotel brand such as W, Westin, or Omni.
On Wednesday, hotel and restaurant investor Mohari Hospitality said it had led a $35 million Series B round of financing.
“We’re a hospitality company that’s translating the upscale hotel experience — the Ws, Westins, and Omnis of the world — into apartment-style lodging,” said Will Lucas, founder and CEO. “Our margins last year were in the 60s last year, while the upper-upscale hotel was at about 47 percent, thanks partly to generating roughly 50 percent higher RevPARs [revenue per available room] than upper-upscale hotels.”
The brand upmarket appeal has drawn the attention of Allen Smith, the former CEO of Four Seasons Hotels & Resorts and a Mohari managing partner, who joins the startup’s board.
“Mint House is a true disruptor in the hospitality industry, redefining the boundary between hotels and short-term rentals,” Smith said.
Unlike most similar next-gen lodging startups, Mint House hasn’t signed leases for the 22 U.S. buildings it operates in today. It instead manages the units under revenue-share agreements with building owners. The revenue-share model misses some of the potential upsides of trying to exploit lease prices when they’re out of sync with travel demand, but it also minimizes a lot of risks of bad surprises.
“We earn about 80 percent gross margin income on multi-year management contracts with building owners,” Lucas said. “The income is SaaS-like [software-as-a-service] in nature.”
A Play for Business Travel
The startup saw its revenue double last year. Half of its bookings come from business travelers.
While the company likes all kinds of guests, it has targeted business travelers. It has signing more than 75 contracts with corporations — “Fortune 500 companies in most cases” — to provide travel lodging.
Yet Mint House doesn’t see itself as competing with serviced apartments or corporate housing providers.
“Corporate apartments are a faster, more flexible version of traditional multifamily and are competing essentially against 12-month leases,” said Will Lucas, founder and CEO.
The company sees its prototypical guest as someone like a management consultant who has to travel weeks and weeks every year. This type of traveler may find apartment-style stays more amenable for all-day Zoom or Teams meetings when compared with the often cramped desks in hotel rooms.
The startup’s properties typically include keyless entry, full kitchens with pre-stocked groceries, on-demand fitness through FitnessMirror, and smart thermostats. The inventory is only “luxury, apartment-style units” and not refurbished hotels. Buildings are either in or close to city centers or clusters of corporate offices, universities, or conference centers.
Since its founding in 2017, Mint House has raised more than $80 million in funding. Its properties are well-rated on user review sites. Its property at 70 Pine St in New York was ranked the “number-one hotel” ranked hotel in the U.S. by Tripadvisor, based on user feedback.