A keen eye for opportunities - Groupe WS
Groupe WS – Business Model: Work & Sleep
Observe, analyse and recognise a need – then produce a product outsmarting inefficient processes with new technolgy. The Groupe WS did exactly that in 2016 when they started offering hybrid apartments and with this, re-invented part of the para-hotel business.
Groupe WS was founded in Paris in 2016 and is active in the para-hotel sector. First of all would you explain to us, what we mean by this term?
The para-hotel sector refers to the new concepts of alternative hospitality, which includes the portfolio of Groupe WS apartments. It combines the advantages of professional hospitality (cleaning & laundry service, front desk, breakfast, concierge) and the flexibility and liberty of self-contained apartments (self check-in and check-out, fully equipped kitchen, larger square footage). The para-hotel sector is both addressing business and leisure customers alike, who are looking for a genuine and real-life experience, without having to cope with the drawbacks and frequent amateurism of airbnb hosts.
Your concept aims to respond to the need of companies having to reduce operating costs due to increased demands for professional mobility and therefore offers business apartments at attractive prices in representative locations. How did you get the idea for this venture?
Groupe WS was launched in 2016, in a context of many new ventures trying to solve market inefficiencies. In our context, Groupe WS was born from an idea: office spaces are used only for a limited number of hours per day and hotel rooms as well. We imagined a concept that would aim to reduce this vacancy waste and that is how we launched WS (which refers to Work & Sleep).
Our appartments are hybrid, enable our customers to work in comfortable conditions and of course, enable them to rest, take a shower, and save the cost of expensive hotel rooms in Paris. By doing so, we maximise the value of the real estate asset by serving two functions at the same location.
The Groupe WS is not a property owner and follows the so-called asset-light approach, which means you only rent the properties for your locations, but on a long-term basis. Does this increase your flexibility to react quickly to new trends?
The asset-light strategy was really important to our vision and execution plan. It was key to scale our portfolio of properties. We operate 170 apartments (approx. 4.000 square meters) in the heart of Paris. If we had bought the real estate, we would have had to invest 60+ million euros to acquire the real estate. Therefore, the asset-light strategy was the right response in order to go fast and to focus on our operational skills instead. Moreover, the real estate legal framework is very protective in France for the lessee, which gives Groupe WS legal and financial security. For example, a landlord cannot charge back the cost of major renovations (roofing, structural works, etc.) since Pinel law (implemented on the 18th of June 2014).
To what extent do digitalisation and the new possibilities this might offer play a role in your operating concept and also in your operating costs?
Groupe WS benefits from digitalisation on several levels. First of all, self check-in and self check-out are provided through an intelligent wifi lock. Therefore, the customer is enjoying the experience of the advantages of digitalisation. Furthermore, digitalisation is also a great asset for our operating chain, with our cleaning teammates, who are equipped with a smartphone and an app so they can quickly report any missing item, or furniture to be fixed, for instance. The Groupe WS network is widespread, with 25 spots in Paris, and also makes use of that digitalisation in order to create a virtual sense of unity.
The hotel industry is changing and in some cases is also under a lot of pressure. The asset-light approach is also causing a sensation. Do you see an increase in such approaches in the future?
The asset-light approach is answering a need: having a company focused on its core business. Therefore, I do believe that the asset-light strategy will continue to grow. Accor Group just published higher results than expected with their asset-light strategy.
They also decided to slow down on acquisitions in «new segments», far from their core business. Regarding the industry, Groupe WS is only operating in the very center of Paris. This gives us great confidence in our position, as there is a huge lack of affordable locations on offer in the center and we have a good number of large events coming up within the next few years (Rugby World Cup in 2023, Olympic Games in 2024).
February 28, 2020
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