Yahoo Finance Mint House claims top NYC hotel after COVID changed its hospitality business
What's the top-rated hotel in New York City? According to TripAdvisor users, it's Mint House at 70 Pine, and it's easy to see why as you click through the photos. Throughout NYC, hotel rooms are essentially bento boxes, carefully constructed to contain all the necessary bits. But not Mint House rooms. Mint House rooms are virtually complete apartments, and travelers have taken notice.
The COVID-19 pandemic changed the way Mint House operates, and as the world starts to reopen, the company is well positioned to serve business and pleasure travelers alike.
Mint House launched in 2017 and raised $15 million in 2019 as it expanded its offering. At the time Tige Savage, Revolution Venture managing partner and Mint House investor, described the company like this: "Mint House is the best of a hotel without the worst of a hotel and the best of an Airbnb without the worst of an Airbnb."
The company is different from traditional hotels by offering products more similar to those rented by Airbnb, but while still offering similar features as a hotel. Another company called Lyric tried to walk this line, too, and raised $150 million before ultimately shutting down.
Initially, Mint House targeted business travelers in secondary markets (read: not New York City). Pre-COVID Mint House rooms were primarily available in Indianapolis, Denver, Nashville, Miami and Detroit. Mint House CEO Will Lucas explained at the time that there were opportunities in these markets, as often accommodations are worse than in major markets.
COVID changed Mint House's trajectory, Lucas explained in an interview with TechCrunch. At the beginning of the pandemic, the hospitality industry fell off. Mint House saw occupancy rates fall from 60% to single digits, and Mint House had to refund customers and furlough employees. Eventually, through new sales team members, Mint House discovered their product offering was well suited for the pandemic. Displaced workers needed a place to live and work. Traveling healthcare professionals needed a home away from home. Some university students were shut out of student housing but still required to attend school. Mint House's apartment-like rooms presented a compelling alternative to a traditional hotel room where kitchens are often, at most, just an instant coffee pot and a mini-fridge. But with Mint House rooms, guests have in-room kitchens, living space and recently rising in importance, an actual workspace.
As the pandemic settled in, Mint House saw a drastic change in length of stay. Before COVID-19, the average stay length was four nights. During COVID-19, the average stay length was 21 nights, as the needs for travelers shifted. Instead of flying in for a quick meeting, workers and travelers needed a place to hunker down and work remotely. During the height of the pandemic, 81% of Mint House guests were working remotely.
Mint House's key features seem purpose-built for social distancing, but they were in place before the pandemic. Guests do not have to check in with a front desk and there are no key cards. Guests can order groceries, and the room will be stocked before arrival -- a service rarely found outside of business-centric hotels but now in demand even with leisure travelers too. Customer service for all of the properties is centralized, too.
While most of the hospitality industry languished throughout 2020, Mint House saw terrific growth. Several months into the pandemic, Mint House saw occupancy rates hit new highs. By June, 84% of Mint House's rooms were booked, and the company averaged 80% over the rest of 2020. The company doubled down and grew its portfolio by over 50% in the last half of 2020, too.
Today, nearly a year after the bottom fell out, Mint House is in 24 buildings in 13 markets.
In New York City, Mint House is competing with giants. CEO Lucas explains.
"This year, in New York City, we have been earning on average 2.2x the RevPAR (revenue per available room)," he said. "Our CompSet (Competitive set, or rather, competing hotels) is incredibly formidable competition that includes two Thompson hotels, three Marriott Hotels, and Hilton Hotels. We are number one in occupancy, number one in ADR (Average Daily Rate), and putting them together, we're more than double the CompSet."
Lucas believes these rankings show Mint House's strengths and how the company is different from traditional hospitality brands. And yet, Mint House turned to executives from classic hospitality brands to fuel growth.
Mint House recently announced the addition of several new executives. Jim Mrha, who previously worked at Domio, Hilton, MGM Hospitality and Marriott, will serve as Mint House's CFO. Paul Sacco, a former investment officer and executive at TPG Hotels & Resorts and Starwood, joined Mint House as chief development officer. Jess Berkin, another former hospitality executive of the travel e-commerce startup Porter & Sail, is Mint House's new marketing and communication executive.
"It feels like we're about to really blast off," Lucas said with a bit of pride.
Mint House is engaged in an aggressive growth strategy just as the world is set to reopen. The company is looking to double the number of available units and go international, starting with London in a month and eventually in South America.
Now, halfway through 2021, the pandemic is receding, and travel is starting to change again. Mint House is seeing the average stay drop back down from 21 nights in 2020 to something around six nights. According to Lucas, leisure travelers are increasing, and Mint House is seeing the return of short business stays. And then there's the new type of business traveler who leaves behind their home office to work remotely from somewhere new, like Miami.
Mint House straddles an interesting line between hotels and short-term rentals like those offered by Airbnb. On one side, they offer the convenience and trust found in a hotel with the style and comfort of a short-term rental. If the company can execute its plan, and its recent executive hires should help, the company is well suited to compete with the Hiltons and Marriotts in NYC and throughout the States and world.
