Amberlair – the world’s first crowdsourced & crowdfunded boutique hotel

‘Boutique hotels with a reverse approach: Create an audience first, let our future guests have a say, and then comes the hotel. The Amberlair concept has the guest experience at its heart and we firmly believe it has the potential to revolutionize the way hotels are built, designed and operated.’

‘Our community of backers – who we dearly address as #boholovers, meaning boutique hotel lovers – are involved from day one, both creatively and financially. Even our name was crowdsourced, because a hundred minds work better than one.’

‘And guess what? Our community has also chosen the location of the first Amberlair in Italy. With the help of our community, we are going to develop a historic villa in Puglia, Italy, and to turn it into the perfect boutique hotel.’

The main villa at Amberlair’s Puglia property

Amberlair is the vision of Kristin Lindbergh & Marcus Orbee after several years travelling and researching, and it is fast becoming a reality.

I love travelling, especially to Italy. And I’ve taken a keen interest in the development of crowdfunding as a funding mechanism for entrepreneurs and as an opportunity for investors….as long as they are aware of the inherent risks. So digging into the unique Amberlair concept was too interesting to miss.

Kristin and Marcus have been kind enough to answer some questions about themselves,  Amberlair and Puglia….I hope you’ll find this Q&A session with them interesting:

Q. you have both spent some time touring the world, evaluating the boutique hotels market. Did you always have in mind that this was specifically to research what has become the Amberlair project, or was it a more speculative trip?

A: When we made the life-changing decision seven years ago to travel the world, we could not even imagine that the impact and inspiration would lead us to create Amberlair. On a Saturday morning in 2010, Marcus decided to quit his senior strategic planning role on the implementation of the Airbus A380 to act on a long-overdue passion. He wanted to travel the world. And because Kristin had made travel part of her life for years, lived in different countries and was working in the tourism industry, she was eager to begin a new adventure as well.

So, we packed up and began our travels for over two years and through more than 40 countries on six continents. Traveling to this extent (we became exposed to so many different cultures and lifestyles!) gave us a new perspective, and exploration fueled our creativity.

During our trip, we discovered that the most special and unique experiences were brought on by staying in smaller, independent hotels. The hip hideaways we found gave us a taste of the local culture and people. We learned how these small businesses operated, and it was so refreshing to discover that none of these owners came from a hospitality background; these hotels were driven by passion. We soon realized that we were not the only avid travellers who preferred to get a truly authentic experience through boutique hotels.

We did encounter some difficulty in our quest to find the best boutique hotels around the world. They were hard to find. In some countries, we couldn’t find a single boutique hotel. The big chain hotels and cookie cutter accommodations simply lacked the same personal and authentic touch that we loved about our favorite boutique accommodations. It was at this point that we felt the urge to do something. How could we make boutique hotels more accessible to travelers, while still tapping into the passion and knowledge that made these spots so special?

This period of travel, inspiration and discovery sparked something in us that would ultimately become the motivating factor for launching Amberlair…

Q: how did you settle on Puglia for the first Amberlair property? I think the crowd voted for this special location in the heel of Italy, but what due diligence did you do on the location first and what others were on the shortlist for the crowd to vote on?

A: Amberlair is the world’s first crowdsourced boutique hotel brand that has taken a revolutionary ‘reverse’ approach to the way hotels are built and conceptualized. First, we created our online global community of boutique hotel lovers and brand followers, establishing a relationship with them from day one to create potential lifelong guests before the hotels are even built.

We then worked with our community to crowdsource their ideas, from choosing the name of our company to the location of the first hotel and will continue to do so throughout the process, shaping the hotel’s eventual design and service amenities to create the ideal boutique hotel, designed by its future guests. Our community of supporters are typically global travellers who don’t like ‘cookie cutter’ hotels. Creative and social minds who have great ideas and strong opinions, and who are ready to put their hearts into the project. They overwhelmingly chose Italy as the location of our first hotel. They spoke and we listened, seeking out the perfect location and the perfect property to develop.

To us, Puglia had such an authentic and powerful sense of identity, much like we have seen in Ibiza, Marrakech and Tulum. It has 500 miles of coastline and the best beaches in Italy. It offers simple, yet excellent and high quality Italian food. It’s full of culture and has lots of UNESCO world heritage sites: Trulli of Alberobello, the Baroque city of Lecce, Castel del Monte, etc. It has beautiful white washed hill top towns, like Cisternino, Ostuni and Martina Franca. In 2013, Puglia was listed among the top 10 world destinations for wine tourism in Wine Enthusiast’s annual ranking. International tourism in Puglia increased by 56% from 2007 to 2014.

Image courtesy of TripSavvy

We conducted an extensive location study and deep dive into researching luxury accommodations in the area. We did this with Jan Hazelton, who is our head of development. Jan has extensive experience in hotel investments and was previously Vice President of Development in Europe for Four Seasons Hotels & Resorts. While the region has a strong demand for 4-5 star hotels, there has been a lack of true ‘boutique’ hotels, until now!

The three most popular locations on our shortlist were Spain, Italy and South Africa, with Portugal, United Kingdom, California, Iceland and the Alps also making it onto the list.

Q: how did you go about deciding which crowdsourcing & crowdfunding platforms to use? I think you’re currently raising €15,000 on Indiegogo and 6,000,000 on The Angel Investment Network? Which other platforms have you considered?

A: Crowdfunding and crowdsourcing are at the heart of the Amberlair concept. With the current equity crowdfunding campaigns on Fundable and Angel Investment Network, we are looking to raise approximately about 6 Million Euros, along with 15,000 Euros through reward based crowdfunding on Indiegogo https://igg.me/at/amberlair. There are a lot of platforms out there and we spent a long time researching the right one for our particular project. We chose these because they gave us the best distribution to potential supporters and backers, and had the most compatible infrastructure to host our campaigns.

Q: the €15,000 you’re currently raising on Indiegogo is obviously a small amount in terms of your overall funding requirements for the Puglia property. What will you use the €15,000 for, and is this as much about finding more brand ambassadors at this stage, as it is about the cash flow? 

A: The funds raised through Indiegogo will finance the architectural plans required to turn the historic villa we have found in Puglia into the perfect boutique hotel. Additionally, we have an incredibly passionate boutique hotel lover community and we hope we will attract more through our crowdfunding campaign, which will highlight our revolutionary approach to hotel development. Added to this, our equity crowdfunding offering is a very attractive investment, with the possibility to own a share of the business and asset for as little as 2,500 Euros. Investors will receive a share of the real estate asset, along with an eventual IRR of between 30-35%.

Equity crowdfunding links:

Q: I think it’s a really exciting concept to have the crowd give opinions on everything from the brand to food to room decor, but how do you anticipate this ‘democratisation’ will work in practice? How will you manage the different views of so many investors, and will you have the final say? And will you have a traditional Board structure to execute operational decisions?

A: Amberlair supporters can be involved throughout the process in order to help us create their perfect boutique hotel. Backers will be able to participate, interact, influence, back, fund or simply lay back and watch it all happen!

Our community can always suggest ideas and give  their opinions and we will try to turn as many of those ideas as possible into a reality, as long as it reflects and respects the overall history and style of the property and locale. At certain key stages of the project, we will canvas ideas and put the top suggestions out for a vote, for example, what shall we do with the large birdhouse on the estate, what shape of pool do they want, etc.?

We don’t have a board of directors, but we (Kristin and Marcus) will have the final say, along with our management team of hotel experts.

Q: In your financials, you anticipate a total of €18.8m from EU subsidies. What is the process to apply for these grants, and what contingency plans are in place for alternative funding in the event that the subsidies aren’t received, either in part or in full?

A. There are several criteria we need to meet in order to apply for the EU subsidies. Italy is not the easiest country to develop in, but we have a strong team of local architects and designers on board who have helped us to ensure that our proposed works conform to all building regulations in the local area.

We will go through the process of applying for permits from the local authorities once we have raised the funds to acquire the property, but do not anticipate there being any issues with this. We have done a feasibility study to anticipate any challenges along the way, from securing the right licences and change of use permits, to finding the right building contractor to deliver the project on time.

We are positive that we have allowed for all the possible outcomes, but guess that dealing with unexpected challenges all part of the fun of developing a hotel!

Q: I love your concept of building the audience before building the property. Do you know of comparable business models in any other sector, do you think, or do you believe your approach for Amberlair is truly innovative, in the hospitality sector at least? 

A. We haven’t come across any other projects like ours, where the community and future guests are involved in creating their perfect boutique hotel from scratch, being involved from day one in decisions like choosing our name, voting on our first location, making decisions about converting the property we have found into a hotel.

A few years ago, Marriott ran a small online digital survey asking guests to vote on three different mock-up room designs, which is the only other crowdsourcing we have seen in the hospitality sector. In 2015 Amberlair was included in World Travel Market’s annual Global Trends Report as leading the way in crowdsourced boutique hotels.

Q:  have you already begun to think about likely destinations and funding mechanisms for property #2 and property #3? How will you ensure there’s enough operational focus on the Puglia property #1, whilst also strategically planning for Amberlair’s longer term future?  

A: We owe it to our backers and supporters to get the first Amberlair property right, and that is our focus for now, but we are always looking for new growth opportunities.

Our longer-term plan is to open up to 50 hotels globally in the next 20 years. Crowdsourcing and crowdfunding are at the heart of the Amberlair concept, so we will continue to develop the company along those lines for future projects.

Thanks to Kristin & Marcus for such detailed and thoughtful answers. I wish them well with Amberlair and hope that I can get to meet them soon, and visit Puglia to see the site of the first Amberlair boutique hotel.

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