Co-living. What is that? You mean co-working?
Recently, the topic of co-living has come up many times in my conversations, including with my parents, and most of the time, the other person did not have a clue what I was talking about. In fact, a few months ago, I myself wasn’t too familiar with the term “co-living” and what it actually meant.
Now it appears that, following the likes of Uber and AirBnB, co-living is the next movement born from us millennials and has already begun to take the hospitality industry by storm. Hospitality superstar and unofficial creator of the “boutique hotel”, Ian Schrager himself, even referred to co-living as hospitality’s next big “disruptor” back at the end of 2018.
Ollie - Long Island City, New York
What Is Co-Living?
Basically, co-living is a housing model where members have their private or semi-private room, and the rest of the facilities, such as the dining and kitchen facilities, living room, fitness room, or any further facilities, are shared. Different providers have a range of facilities and models; some focus more on short-term accommodation, while others focus on providing long-term living arrangements, and everything in between. In practice, co-living accommodation is a mix between a lifestyle hotel and a traditional apartment, or flat-share, with properties varying in size from a couple rooms to several hundred rooms.
Whilst some members of older generations tend to view this style of living arrangement as a glorified dormitory or student-style accommodation, to millennials or young adults, it can be much more. It is a contemporary solution to the increasingly unaffordable housing prices, and it provides an escape from the rising sense of loneliness and solitary lifestyles that are all too common in large, bustling cities.
The Good…
Zoku Amsterdam - Amsterdam
Co-living can be beneficial in several ways:
EASE AND FLEXIBILITY - It appears to be an uncomplicated option offering good value for money, as rental prices are generally ‘all-inclusive’ and are more flexible than traditional rentals. Most co-living providers bundle the rent, any council tax or equivalent, utilities, and facilities fees (to include use of a gym or pool and/or participation in any organised activities, for example) into one payment. This simplifies any monthly financial arrangements for tenants and facilitates more hassle-free budgeting. Further to this, the rooms are generally furnished, often to include bed linen, and most co-living providers include weekly or bi-weekly room cleaning and 24hr concierge services. This makes the entire accommodation rental process as easy as possible, which is important for the eternally stressed millennial.
COMPANIONSHIP - People are now, reportedly, lonelier than ever and millennials are somewhat surprisingly cited as being particularly affected. Due to the rise of social media and increased online connectivity, more and more people are limited to online relationships and lack a feeling of belonging. Co-living can provide a solution for this loneliness - as most facilities are shared, interactions are almost unavoidable, encouraging guests to mingle, build new relationships and establish a community. For people moving into new cities with no existing contacts or connections, co-living can be an excellent starting point to forming friendships and building networks. Many co-living companies provide short-term contracts, allowing tenants time to discover their new city, make new acquaintances, before finding a more permanent living solution, potentially with friends made in the co-living environment.
The Bad…
To the optimistic individual, co-living is a great solution to many current issues facing most young workers. Nevertheless, in reality there are significant downsides to co-living that need consideration:
PRICE - Co-living is often advertised as being cheaper than traditional renting. Compared to a one-bedroom apartment in most key cities, this may be true. However, compared to all options, for example large flat shares, co-living is not the cheapest way to go. In terms of demographics, the youngest professionals, including recent university graduates, would be among those who would most benefit from, and be most drawn to, a co-living style arrangement. However, the average salary brought in by that group is generally insufficient to afford the prices charged, forcing them to settle on other, more traditional options of accommodation.
SIZE - In many of the co-living setups, the physical bedrooms tend to be small. Very small. This is fine to a certain extent, especially for those who spend limited time in their rooms and don’t have a vast array of personal belongings. In many cases though, the rooms may be considered too small, as developers try to squeeze as many rooms in as possible to generate greater revenues. As a result, co-living tends to become a short-term stop-gap, rather than a longer-term option.
And the Big Players…
The Collective - Canary Wharf, London
WeWork were among the first to really venture into co-living on a bigger scale, with their WeLive brand, back in 2015. Since then, many key players have emerged all over the world, in hotspots such as London, Berlin, Madrid, Singapore and cities all across the United States and China. Many of these ventures began in one location and have since branched out into several more.
In London, The Collective opened its second major property last year, currently the world’s largest co-living development, in Canary Wharf. The accommodation comprises 705 rooms, a state-of-the-art communal kitchen and dining area, two cinema rooms, a games room, a fitness studio, a 20th floor pool and leisure area, a rooftop restaurant and bar, and even a golf simulator, amongst other facilities. Additionally, The Collective hosts a diverse selection of events and activities on a daily basis, which members can sign up for free of charge. The brand has also launched their first property in New York City and has many more in the pipeline across the US, UK, and Europe.
In the US, companies including Ollie, Common and Starcity are the more well-known providers. In Germany, and more specifically Berlin, providers such as Haybt and Happy Pigeons are becoming increasingly popular, while Berlin based Medici Living’s Quarters brand is rapidly expanding all over Europe and America. In Asia, CapitaLand, one of Asia’s largest real estate companies, through its Ascott business unit, has launched its new Lyf brand this year with its first property in Singapore, and has several more in development in China, Thailand and Singapore.
Globally, companies such as Roam offer a more “travelling” solution, where guests have the ability to move around, staying at all their locations in Miami, Tokyo, London and San Francisco as they please, for one regular, though hefty, price.
A Hotel Alternative?
Habyt Feilner Strasser - Berlin
Nowadays, people are moving and travelling more than ever. In response to this, co-living could offer a convenient middle-ground between traditional hotels and traditional apartments. Hotels have begun responding to this movement, with Accor launching its Circle concept in 2018 under its Adagio brand, which puts more focus on shared guest experiences and common areas. Back in 2016, a brand called Zoku launched and were said to be “where AirBnB meets WeWork.” The concept is a hybrid of a home and an office, where the micro-lofts are well designed to fit the needs of the modern business traveller, being suitable for stays from a few days to a few months, with customers benefiting further from an array of shared facilities.
The Bottom Line
Just like all trends and movements, it will be interesting to see how co-living expands and develops in the near-future and how it intertwines with the hospitality industry. The attractiveness is clearly there and difficult housing situations in many cities around the globe, combined with the shifting of lifestyles, will certainly help to fuel the growth. If and when the other major hotel groups begin to incorporate more co-living dimensions is definitely something to watch out for, but let’s face it, emphasising communal areas is nothing new to the hotel industry.
Author: Arthur Gigon
Arthur joined Hamilton in January 2019 as an Analyst, supporting the team across all business areas.
Prior to joining Hamilton, Arthur graduated in 2018 with an Honours degree in BSc International Hospitality Management from the Ecole Hôtelière de Lausanne, with a focus in Strategic Hotel Investments and Portfolio Management
Arthur has gained experience in hospitality through internships and jobs in the United States of America, Switzerland and Hong Kong.