TOP STORY Lyric to close units and lay off 20 per cent of staff US: San Francisco-based hospitality start-up Lyric, which numbers Airbnb among its investors, is to lay off 25 of its 120 staff and close up to 200 units. LATEST NEWS FEATURES VIDEOS Editor's comment
06-03-2020
• Back in September last year, my colleague Paul Stevens wrote an in-depth feature on our sister website ShortTermRentalz, titled: The master lease model: is the bubble about to burst?
In the light of recent events at Lyric, that headline comes back in to sharp focus, as the company lays off 20 per cent of its workforce and closes nearly 200 of the roughly 600 units in its portfolio.
The company has raised $180 million from investors, $160 million of it less than a year ago, so it is obviously a concern that founders Andrew Kitchell and Joe Fraiman feel the need to take such drastic action so soon. But they have at least identified a problem and grasped the nettle early, giving the business the best chance of becoming sustainable.
What seems apparent is that the Lyric model is working in some locations and not others - what that secret sauce might be in terms of the right buildings and neighbourhoods I don't know, but the company is losing apartments in Philadelphia, Houston, Dallas, Pittsburgh, Orlando, Minneapolis, Washington, D.C., and Chicago, while retaining them in New York City, San Diego, Philadelphia, New Orleans, Miami, Charlotte, Austin and D.C.
It is also concentrating on “larger projects with increased density” in some of its best-performing cities, suggesting that having a handful of apartments here, and a handful there, in disparate buildings is not a profitable way to operate.
• The Serviced Apartment Awards are nearly upon us, and we are looking forward to welcoming more than 300 industry figures to the Millennium Gloucester Hotel in London's Kensington on March 12th. It's going to be a great night celebrating the industry's achievements. Click here to find out more. If you are coming and haven't booked accommodation yet, there are some great value rooms at the venue and close by click here for more info.
George Sell, editor Katie Houghton
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