- Airbnb-backed short-term rental startup Lyric is handing over its final location to competitor Mint House, after closing all of its other locations as the pandemic hit the hospitality sector.
- Andrew Kitchell, CEO and founder of Lyric, told Business Insider that he is now focusing on Wheelhouse, the hospitality pricing startup he founded concurrently with Lyric.
- Mint House hired Lyric’s former managing director of real estate to be the company’s head of acquisitions and is in negotiations to take over at least one other Lyric property.
- Visit Business Insider’s homepage for more stories.
Lyric, the Airbnb-backed short-term apartment rental startup, will cease operations of its final location and hand over the keys to competitor Mint House later this month.
The founder and CEO of the San Diego-based Lyric, Andrew Kitchell, said the startup will no longer lease and operate short-term rentals, but instead focus on a separate hospitality software company for short-term rental operators that he set up in 2014 called Wheelhouse.
“While it’s been a tough year for the urban accommodations space, Lyric has been fortunate to work closely with Mint House to transition a number of our best properties & teammates to a team we not only respect, but who we believe is poised to lead the next generation of the short-term rental space,” Kitchell said in a statement to Business Insider.
Mint House will take over Lyric’s 70 Pine Street location in downtown Manhattan. The hospitality rival said it is in the process of taking over at least one other Lyric property, but declined to comment on exact details because of ongoing negotiations. The company also hired Lyric’s former managing director on the real estate team, Ashby McElveen, to become the firm’s head of acquisitions.
Lyric laid off a fifth of its 120 staff members and closed 200 of its 600 units across a 14 states in February, with another round of layoffs and downsizing in late March, the Real Deal reported. It continued to operate 132 units out of its 70 Pine Street location, which is currently the highest-rated hotel in New York City on travel website Tripadvisor.
Lyric, which launched in 2014, raised almost $180 million in total from investors. It most recently raised a $160 million Series B in April 2019 that was led by Airbnb, and included funding from tech-forward landlords RXR and Tishman Speyer, Starwood Capital Group chairman and CEO Barry Sternlicht, proptech heavyweights Fifth Wall, and numerous other investors. Investors in Lyric have not responded to Business Insiders’ request to comment.
Kitchell said he is now working on releasing a new version of Wheelhouse in December, and that he has begun hiring, with the team expanding to 15 people from 4 last year.
The hospitality industry was hit hard by the coronavirus, as demand collapsed mid-March during stay-at-home orders and remains depressed. The short-term rental industry wasn’t spared the brunt of the challenge, with operator StayAlfred closing earlier this year, mass layoffs at Sonder, Zeus Living, and other startups, and companies frantically downsizing and renegotiating their leases into revenue share agreements.
Business-travel focused Mint House is optimistic that corporate travel will make a comeback
Mint House will take over 70 Pine Street on November 20th. The building, owned by New York developers and managers Rose Associates and DTH Capital, who renovated the building after purchasing it in 2012.
Mint House, founded in 2017, is focused on business travel and signs contracts directly with corporations such as American Express Global Business Travel. It most recently raised a $15 million Series A funding round in May of 2019 led by Revolution Ventures and included funding from a range of industry veterans such as former Starwood Hotels CEO Tom Mangas, Travelocity CEO Carl Sparks, and the former president of St. Regis Hotels Kerry Hatch.
Mint House founder and CEO Will Lucas told Business Insider that the company has signed ten partnerships with Fortune 200 corporations, told Business Insider that companies are “beginning to turn back on corporate travel,” but overall it’s a mixed bag, with management consulting companies hungry to return to business travel while others seem content to replace some in-person meeting with Zoom in perpetuity.
Users, whether business travelers or people using their units for leisure have changed their behavior drastically.
“The average stay has grown significantly from three nights and is now close to 20 nights,” Lucas said.
Guests are now also using spaces to work remotely, with a recent internal survey finding that 80% of guests had worked remotely in a Mint House unit.
Lucas was optimistic about the return of business travel, pointing to China, where domestic air travel and hotel profitability metrics have rebounded from pandemic lows.
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