Skift Take
Arlo Hotels, a U.S.-based independent brand, first bet on micro hotels, which pack in more guests per property. But now it favors larger rooms. It's betting that creating "experiences" and charging extra may prove more reliably profitable.
Real estate development firm Quadrum Global said this week that it planned to bring The Williamsburg Hotel under its Arlo Hotels brand by September — having in April bought that boutique hotel in Brooklyn, New York, for $96 million.
The move underscored how the Arlo brand has evolved in response to shifting consumer demand since its debut in 2016. Rooms at The Williamsburg are notably larger than the ones at the first Arlo properties.
"When we first invested, we bought into a concept that was all about fitting the largest number of rooms on a tiny plot in New York to make the numbers work," said Oleg Pavlov, founder and CEO of Quadrum Global and Arlo Hotels. "The idea was that, for a certain customer segment, you just need a bed and a couple of amenities, and the rest of the time you spend in communal areas or out of the hotel."
Arlo compressed 575 rooms, each about 165 square feet, into its first two buildings in New York: Arlo NoMad and Arlo SoHo. The brand wasn't alone in betting on the "micro-hotel" concept. Dutch hotel company CitizenM, which raised $1 billion in 2021, typically has guest rooms of merely 160 square feet in size. Marriott's Moxy brand, launched in 2014, has similarly small rooms that aim to appeal to younger guests trading off space to get cheaper room rate