Dash Living, a Hong Kong co-living start-up, is helping hotels switch to monthly leases to survive the unprecedented downturn in the city’s tourism sector.
More business opportunities have emerged for Dash since the coronavirus outbreak and it is collaborating with six hotels. “We did not have third-party hotel partners before Covid-19, and we [have grown] pretty quickly over the last three months, actually,” said Eddie Sit, Dash’s head of marketing. “Everyone knows about the difficulties faced by the hotel industry during the coronavirus outbreak. Some of those who discussed with us thought long leases could be a way out,” he added.
Dash’s link up with hotels comes at a time when visitor arrivals in Hong Kong have all but dried up. They fell 97.2 per cent year on year last month, according to Hong Kong Tourism Board. The average hotel occupancy rate stood at 51 per cent in January, compared with 59 per cent a year earlier and 92 per cent in January 2019.
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Dash, which was founded by entrepreneur Aaron Lee in 2014 and is backed by MindWorks Ventures, manages and operates more than 1,300 units that include co-living homes, serviced apartments and hotel rooms in Hong Kong and Singapore. It has more than 1,000 tenants and 250,000 sq ft under management.
Among the hotels working with Dash are The Aberdeen by Dash Living, which is being converted from The Aberdeen by Ovolo, as well as The Sheung Wan By Ovolo and the Figo. Some of these hotels might not have the manpower or amenities for long leases, and found Dash’s practice “quite mature”, Sit added.
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The two Ovolo Group properties will start offering monthly leases from next month, with rents starting at about HK$7,500 (US$966) a month for a room measuring about 215 sq ft at The Aberdeen, depending on the duration of lease. The most expensive unit will cost about HK$27,000 a month. The Aberdeen was purposed for quarantine earlier before undergoing renovation.
At The Sheung Wan, rents will start at HK$7,900 for a 130 sq ft room, the smallest unit, and HK$18,000 for a loft room, the biggest unit.
The cooperation could help Ovolo tap a special market segment, which includes millennials, frequent travellers and people with different backgrounds, said Marc Hediger, Ovolo’s acting chief operating officer. The company owns and operates 12 hotels across Hong Kong, Australia and Bali. “We have not targeted [them] as long-stay tenants [before], because we were more in the hotels business rather than the long-stay business,” he said.
Ovolo has been adapting to the market over the past 18 months to ensure that it stays up-to-date with the pandemic, Hediger said. For instance, it exchanged queen-sized beds for a working and workout area with a desk and a treadmill in The Aberdeen when it was being used for quarantine purposes.
“In times like this, you must be flexible, you must be adaptable. You must come up with solutions and business models that work,” Hediger said. “And for us, this is now a preferred partnership, because [Dash is] targeting a very localised clientele, because we all know that there are not many new guests coming in, right?”
Dash itself has properties in Hong Kong providing about 350 rooms. The average long-lease occupancy at its own properties was more than 90 per cent throughout Hong Kong’s anti-government protests and the pandemic.
The average room rate for Dash’s properties ranges from about HK$8,000 to HK$26,000 a month in places such as Wan Chai, Causeway Bay, Tsim Sha Tsui and Mong Kok. Its average rent has fallen about 15 per cent in the past 12 to 15 months amid the coronavirus outbreak, Sit said.
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