Extended Stay Hotelier AKA Residences Plans To Stay A While

Staying in apartments used to be a couch-surfing alternative for travelers who couldn’t bear to drop hundreds of dollars on a night in a hotel. Now, more travelers are opting to live in these homes away from home, including those with plenty of dollars to spare. 

Philadelphia-based AKA Residences is an extended stay company that provides luxury apartment homes for America’s rich and famous. The brand has been a pioneer in the business of offering week-to-month long stays at serviced residences for over a decade, but faces more competition than ever now, from Airbnb Luxe to Marriott’s Home & Villas. I recently sat down with Larry Korman, president of AKA Residences and co-CEO of the Korman Company, to talk about his philosophy on the competition, AKA’s famous clientele, and why he won’t be expecting his kids to follow his footsteps in the family business. 

AKA is known for being very big on privacy, though we hear it’s popular with celebrities. How do you keep that customer anonymity while also promoting your brand in an increasingly crowded field?

We have 12 properties right now and each one is completely unique, but there are commonalities that our guests come to expect. That is a level of service, cleanliness, presentation, and above all, respect for their privacy. We’re not a hotel, so we don’t have to be open to the public to come in, and we don’t have bars or restaurants that have to succeed on their own. By having residents that stay weekly or monthly, there is a different level of respect to other residents. I think there’s a level of privacy built into the operating platform that makes it unique. 

In the 15 years of AKA, it’s never really gotten asked who stays with us. We have people like Harrison Ford, Amber Heard—Johnny Depp was coming to visit Amber Heard—Liam Hemsworth, who was with Miley Cyrus…Miley kept tweeting where she was at, and we weren’t set up for that. We did ask if we could move her to the Four Seasons. As much as we would love to have Liam and Miley staying with us, we felt that there would be a better fit for them to be at the Four Seasons with that security, and also for all our other residents, who are staying under the radar. 

You’ve talked before about how you don’t necessarily see Airbnb as a bad thing for AKA, even as the company is adding new offerings like Airbnb Plus and Airbnb Luxe. Could you expand on that?

What we like about Airbnb that hotels don’t like is that they have opened up minds to the advantages of staying in a residence rather than a [hotel] room. That idea of living like a local, staying longer, understanding the spirit of a neighborhood—Airbnb did start with the younger generation, albeit it based on price, and opened up people’s minds to a new way of staying in a city, not just in the commercial areas where there’s hotels, but in the neighborhood. 

I feel strongly that there should be a level playing field, that if an apartment and condo can rent out a residence for a day or two, we should be able to be in a residential zone. With that said, I’ve been meeting with people like Chip Conley and Brian Chesky [of Airbnb] to talk about how we can collaborate and work together. I think there’s a way for us to all get along. 

What exactly do you mean by working together with Airbnb?

I met with Brian at Airbnb two years ago. He recognized that if he could partner with a group like AKA, he could sort of usurp that reputation we have for a high cache and professional management. He wanted to know why I would want to [partner with Airbnb], and I said, the data analytics you have are second to none. I would love to see if we could collaborate. We’re trying to grow our concept globally in the next two, three years from 12 properties to 36. To have that information in Paris and Rome, recognizing that we’re a small company from Philadelphia, would be powerful for us. In today’s world, the more you collaborate with others to create synergies, the more competitive you’re going to be. 

What are your thoughts on Marriott entering the home-share business? What does this mean for AKA?

I love Marriott. I think 30 brands, though, is hard [for brand] identity. When Marriott first bought Ritz-Carlton, they succumbed to some of those traps. They lowered some of the quality, they cut costs. I’m intrigued by groups like Hyatt, where they’re making a play for quality and wellness. I think Marriott’s a little too big for us—we’d get lost in the shuffle. 

I never want to lose that identity. I feel that it is so important, more than ever, to champion the things that make us unique. As we partner with people, we still want to maintain control, and I don’t want to compromise the integrity of that brand identity.

It seems that the hospitality industry is becoming much more experience-based, as leisure travelers seek out local, authentic moments rather than convenience or amenities. Do you think this is true of luxury extended-stay travelers as well?

We were one of the first to create experiences 15 years ago, with the NYU School of Sleep. Five years ago we partnered with Richard Gere, who has a weekday experience at his Bedford Inn, where you could ride horses, have lunch, use his yoga studio, and have a beautiful experience that way. We also created with Airstream the world’s first mobile AKA suite. I actually did it for my wife’s 50th birthday. We went to these beautiful vineyards in Santa Barbara, all the way up to Big Sur and down to Las Vegas. 

We pride ourselves on these experiences. If you’re with us for two, three months, wouldn’t it be great to get away for a weekend and have a great experience that’s been curated by AKA, to have an element that you couldn’t do in a retail way? Experiences are important and that was an element we were first to market. 

You’ve been in the hotel business your whole life—what is the most surprising turn it’s taken that you’ve seen to date? 

I just remember as a kid going to Atlantic City and going to Holiday Inn, and you went as a whole family. I think [now] it’s diversified, where each family member today could go and have their own experience and not go together as a unit. It’s very easy and accessible. The customer base is extremely knowledgeable and knows exactly what they want. 

I do worry about too much technology, missing the check-in, taking the hospitality out of hospitality. It’s moving at a lightning speed. I think there’s so many brands and so [much] diversification. I think Airbnb has added a level of overcrowdedness, because now you’re taking people’s apartments and condos and adding them to the mix. Does it dilute the experience? Does it hurt the hoteliers trying to do something special? 

The Korman Company has been a family business for four generations. How have the dynamics of that shifted? Do you think it’s an advantage for businesses to be passed down from generation to generation?

When I graduated college and joined the company, I was one of nine kids in the fourth generation. When I entered, there were lots of cousins involved, and I recognized early on in a family business that you were paid on the basis of age, not level of commitment, work ethic, performance, responsibility, or any of those elements.  

My brother and I decided to form our own company with my dad, and [it was] good because nobody else in the family was really wanting or willing to be in the business. Now it’s very much our own business, and we’ve sold up the original portfolio that made up the third generation. The people who are overseeing and have the highest power and make the most money are the ones who take that responsibility to the highest level. You can’t have complacency, and you can’t have a situation where individuals aren’t fully committed to the concept. As soon as you do that, it’s hard for family businesses to go beyond two generations.

Above all, I said to my kids, if this isn’t your passion, pursue your passion elsewhere. I pursued my passion so it was never work to me. So far, none of my children have entered the family business. My daughter is pursuing fashion, and my two boys want to save the world.

What’s the best piece of business advice you’ve received in your career?

The best business advice I got early on from my father. They were simple words and I didn’t understand it at first: work backwards. The idea is to stop the clock and say, okay, if I am trying to get higher monthly occupancy at AKA Hollywood, what business are we not getting? Okay, we’re not getting enough from our key strategic group. And you start working backwards and see what specifically you want to accomplish and what dynamics get you there. It’s a variation of A to B to C to D. Instead, I do Z to Y and work backwards. The answer is usually very illuminating.

This post first appeared on Forbes.com. To see the original, click here.