In the years before the pandemic, a new generation of hospitality companies emerged that acted like tech startups, employing their own teams of software developers and attracting VC funding.
Extended stay units, often with kitchens, plus contactless guest technology and lean ops teams, helped companies like Sonder, limehome, Bob W and Numa perform better than their traditional hotel counterparts during the Covid years.
Today, has their tech-first approach allowed them to grow differently? Have they been able to expand like pure tech firms?
This spring, limehome, the Munich-based provider of digitised design apartments founded in 2018, reached 10,000 contracted units.
Dr. Josef Vollmayr, Co-CEO of limehome, said: “Reaching 10,000 apartments in just six years is a major achievement that underscores the growing demand for our innovative hospitality concept, especially considering rising construction costs and a challenging financing environment.”
European expansion
Around 4,000 units are currently live, with a pipeline of 6,500 units, Vollmayr told Hospitality Investor. Nearly half of new signings are new builds and the company has recently opened its first properties in Paris and Versailles, with three in London to follow.
The company is not under pressure to refinance, he said: “We’re breaking even now. We have investors from venture capital and, luckily, they do not have any time constraints or pressure to exit.”
Leases are “a bit more expensive” now than in 2020-22 which was “a great time for signing new leases,” he said, adding: “Leases usually increase with inflation and ADRs do too, more or less, so I think the market is more or less in equilibrium.”
To date, the company has invested €20m in the salaries of its 70-strong tech employees. A further growth team of 50 people includes 30 “expansion” managers positioned across Europe.
Another tech-first hospitality startup, Helsinki-based Bob W, has raised a total of €70m in funding since starting out in 2020 and co-founder of Niko Karstikko said the company tripled its revenue in 2023, doubled it last year and expects to double it again in 2025: “We’ve reached profitability despite the growth,” he said.
Bob W operates a total of 3,000 apartments in 17 European cities. Karstikko underlined the company’s resilient business model: “We average four to five nights compared to hotels 1.5 nights. Just under half of all our demand is B2B relocations, temporary homes, and because we have those kitchens it helps us now as it did during the pandemic.”
He added that the company was able to open two new properties in Amsterdam recently with only three members of staff: “We have one seventh of the employees of a normal hotel and six sevenths is tech. It’s helped us scale.”
Numa Group is another operator that has scaled rapidly on the back of its proprietary software. “When we started the company, the main thing we faced was that there is no one solution that fits all purposes. So we started to develop our own tech around three pillars: the guest journey, decreased opex and increased revenue,” explained Dimitri Chandogin, president and co-founder, Numa Group at IHIF EMEA 2024.
The value of technology
There is no doubt that an intelligent and innovative approach to tech has facilitated rapid growth for these companies, although their tech operations are not all exclusively in-house. Limehome works with Apaleo, for instance, and Bob W is a Mews customer.
The next steps for an established pure tech firm would be further PE rounds to fund acquisitions and expansion and then perhaps a public listing. Smaller and successful tech firms are acquired on a weekly basis by larger ones.
Commenting on possible future trajectories for Bob W, Karstikko said: “We are all just a drop in the bucket compared to Marriott’s 1.6 million rooms.”
Is that his goal? To reach that kind of size? “Go bigger or go home, right?” he answered. “Ultimately our vision is to be the most loved hospitality brand for the next generation of travellers and to detach ourselves from the traditional thinking of what hospitality should be. There is a massive opportunity, and we want to be a household brand.”
Karstikko added that much of the initial financial support for Bob W came from pure tech entrepreneurs: the founders behind companies like Wise (fintech), Wolt (retail delivery) and Supercell (video games).
Lessons from Sonder
However, being characterized as a tech company when you are, in fact, a hospitality management company, carries significant risks. Real estate operations do not have the same scalability or profit margins as pure tech companies, and the history of Sonder in the US provides a cautionary tale.
Founded in 2014, Sonder went public in 2022 with a private valuation of $1.9bn. As of April 2025, Sonder has a market capitalisation of $25m and is currently taking action to overcome a legacy of unprofitability and accounting errors.
The lifeline for Sonder now is its integration with Marriott through a licensing agreement. This partnership, announced in August 2024, will allow Sonder to distribute its properties through Marriott's channels, and is now central to its operational focus.
Sonder expects the full Marriott integration to complete in June 2025 and it is also raising $18m from share sales and implementing $50m in annual cost savings through layoffs, software savings, and “other efficiencies” connected to the Marriott integration.
In a recent statement, Francis Davidson, co-founder and CEO of Sonder said: “We are right-sizing our organisation for the next era of Sonder. The integration with Marriott is expected to enhance the positive RevPAR and profitability trends that our portfolio has already experienced over the last several months.”
Commenting on the future of his company limehome, Vollemyr was realistic about where its value lies: “When I think about a potential path going forward, most of the value is in the properties and the leases, and the tech allows you to get the most value out of the leases.”
Consolidation, churn, and liquidity will occur in this market. The extended stay segment has become a focal point for investors and developers in recent years. Global hotel chains have multiple extended stay and conversion brands and, Hilton in particular, is looking to expand its Liv Smart brand across EMEA and APAC. The recent off-market transactions of individual Numa properties also point to liquidity in the extended stay/alternative accommodations market.