Serviced Apartment News talks to Kenneth Flornes, CEO of US serviced apartment provider Nectar Furnished Apartments.
• Could you give us a condensed career history and tell us how you got in to the corporate housing market?
“My dream was always to open my own corporate housing company from the moment I joined the industry. After spending five years with Lehman Brothers as an analyst in the 90s I opened up the first floating hotel ship in Scandinavia. I realised then, that I had a real passion for the hospitality industry. In 2002 a life-long friend was working for Oakwood Worldwide and had an opening for an inside sales position. Shortly after that I realised that I had found my calling and I worked my way up within the organisation. Later I had an opportunity to launch the corporate housing division for Silverstein Properties in New York City. With years of industry experience and insight, I knew the market was looking for something new and different. In 2015 my vision became a reality as Nectar Furnished Apartments opened its doors.”
• What are the particular challenges and opportunities offered by operating in a market as dynamic as Manhattan?
“New York is often considered the capital of the world – as a new provider we knew we had to overcome multiple challenges to be successful. Developers, management companies, clients and our guest have high demands and expectations. As you know, managed costs in New York City are among the highest in the United States and the market has a long list of competitors. We all share the same and uncontrollable issues: inventory, costs, demand, and seasonality. We knew that a simplified plan offered us the best opportunity to be successful – We must be valued by providing value. We must make it easy to do business with us and always stay ahead by focusing on the guest experience. We want to be the easiest place to have a great night sleep.”
• What impact have the likes of Airbnb had in Manhattan, both on your business and on the serviced apartment sector in general?
“Overall Airbnb is a tremendous phenomenon for the short-term individual leisure traveler. But we do not see them as a competitor in our industry, especially in New York as our guests are more often long term (over 30 days) and are corporate clients. For example, we serve entertainment, financial, insurance, and the consulting industries. Corporations crave consistency on so many levels and we are designed to meet their needs.”
• You said in a panel session at Serviced Apartment Summit Americas that corporate housing is “stuck in the 1990s”. What did you mean by that and what should the sector be doing to drag itself in to the 21st century?
“In New York there was no change in yellow cabs and black town-cars for 50 years until Uber came along and changed everything. We think the market is ready for an Uber for the temporary furnished apartment industry. We see an opportunity to make an investment in technology to improve both client and guest experience. We are aware that there is a new trend from our guests and that they seek unique, local, consistent and a dynamic living environment. There is a massive paradigm shift going on in the marketplace, demands and expectations are changing exponentially. Nectar is a new provider with a combined industry knowledge of 50 years and no legacy systems, we want to lead that effort for our guest and industry.”
• Are you seeing much leisure use of your properties? If so how much and how do you attract that business?
“Leisure is an important, but limited component of our strategy. As you are aware, in New York City, all reservations must be 30 days stays or longer in accordance with the city mandate. We look to maintain no more than 20 per cent of our guests as leisure travellers at any given time. We have a very specific strategy to identify the ideal guests who are seeking a long term stay in New York. These guests have a desire to be New Yorkers and enjoy spacious living accommodations and be a part of the local community during their visit.”
• What are your plans for Nectar over the next three years in terms of new properties, new cities and innovations in the business?
“Today’s world can no longer operate in a three or five-year business plan. At the beginning of each quarter we review our strategic plan and make proper adjustments based on a multitude of factors. Yes, we have growth plans both domestically and abroad, yes, we have lists of new properties in our pipeline, we see affordable luxury, amenities and mixed space as a growing trend. And yes, we are implementing new technologies within our business. But we have a much simpler three-year plan and it is why we opened Nectar Furnished Apartments. At Nectar, we don’t want to be the largest provider in temporary housing, just recognised as the best. With that said, our growth plan is based on our ability to deliver ongoing excellence for developer, property management, client and guest in every way.
Article by George Sell