Up for the challenge: Charlie MacGregor, The Student Hotel

George Sell By George Sell
Uploaded 27 July 2018

The Student Hotel founder Charlie MacGregor tells BHN about "one of the best kept secrets in the hotel business".

• When and where did you have the idea for The Student Hotel?
"Student accommodation is in my blood. My father built the first purpose-built student rooms in Edinburgh, where I grew up. At 25 I bought a small student accommodation company and sold it 10 years later when I moved from London to Amsterdam and started TSH. The goal at the outset was simply to create a better space. I could not believe how people treated students. No taste in facilities, furniture or space. I wanted to do it better. Since then we've moved on. Now it's not only about creating a better experience for guests - I want to integrate communities and revitalise cities."

• And how did you go about putting the concept in to practice?
"We began with a 146-room property in Liege, financed by an Icelandic bank that subsequently went bust during construction. We managed to fund and finish it privately - it was full within two weeks of opening in September 2008. From there we secured investment from The Carlyle Group and began planning additional projects. In 2010 we developed TSH from student accommodation to the hybrid co-living, co-working model, built a showroom and secured bank funding to expand the concept in Europe. TSH Rotterdam opened in 2012 with 100 per cent occupancy and won the Venuez Best Hotel Concept that year."

• How many properties do you currently have and how many are in the pipeline?
"We are Europe's fastest growing co-living, co-working hospitality company with 4,400 rooms across 11 locations in Florence, Rotterdam, Amsterdam (two), The Hague, Groningen, Eindhoven, Maastricht, Paris and Barcelona (two TSH Campus student-only residences). TSH Dresden will open this September. Between 2019 and 2021 we will be opening TSH properties in Bologna, Madrid, Berlin, Delft, Porto, Vienna, Rome, Lisbon, Toulouse, Barcelona, with a second hotel in Paris and two more in Florence. Our current plans are for 65 hotels operational, under construction, or planned in European cities in the next five years."

• What are the criteria you look for in a new location?
"We look for European cities with multiple international higher education institutions, a significant business community populated by young professionals and entrepreneurs, and attractive to leisure travellers. Sites can be existing buildings or development opportunities, with easy access to the city centre, campuses and public transport."

"Our business model is 400 to 500 rooms per property, as well as co-working space, meeting rooms and common areas so we look for buildings or sites offering 15,000 to 20,000 square metres. Many of our developments to date have been in areas in need of regeneration and we have worked as successful partners with cities looking to develop specific areas. We're not restricted to one property per city; we have two in Amsterdam, two TSH Campus properties in Barcelona with a hotel in development, we're adding a second Paris hotel and will ultimately have three in Florence."

• Aside from the accommodation, what are the key features of one of your properties?
"Every TSH has a mix of student accommodation, short stay and hotel rooms. Our newest hotel in Florence has nine room types in total as well as everything a guest would expect from luxury accommodation, including a rooftop pool with panoramic view of the city's iconic skyline. Each property is tailored to its location but at the heart of each is the amount of space given over to communal areas that are open to all guests and locals alike."

"They also offer free, superfast wifi, a restaurant, bar and/or coffee shop, fleet of bicycles for guest use, TSH Collab co-working space, meeting rooms and gym. Some have an auditorium, others have special features like rooftop bars, or hot tubs - our next property in Florence, Belfiore, will have a rooftop garden, pool and running track."

• Does the guest demographic vary much from one site to the next, particularly in reference to students and non-students?
"We've seen an increasingly internationalised community over the past five to 10 years. Entrepreneurs are increasingly mobile. Students are keen to study abroad. Travellers are looking for opportunities to see new places on a regular basis but also want to feel part of the communities they visit. The lines of demarcation are breaking down. Today's students are tomorrow's entrepreneurs and travellers. In a very real sense they share values and aspirations and a desire to be with like-minded people. There is a new demand from the younger guest for co-living, co-playing, co-working. We call it the Complete Connected Community."

"The resident mix is driven by factors including seasonality, local market dynamics and size of the hotel. In Florence we are building three hotels with a total of 1,360 rooms. Each hotel is located in a different neighbourhood so we look carefully at the market to determine the mix. Our first Florence hotel, Lavagnini, is located in the heart of the city next to Fortezza da Basso, the prime conference centre. For this reason we dedicated a larger portion of rooms to leisure and business guests, and created three restaurants, plus an auditorium and co-working space."

• Do you own the buildings or lease them, or a mixture of both?
"TSH group is a joint venture between management and two financial institutions; pension fund APG and a real estate investment fund managed by Aermont Capital Partners. The joint venture develops, owns and operates all Student Hotels, including the real estate."

• What do you know now that you wish you knew when you launched the company?
"I wish I had known for sure that this would work. I came into this 10 years ago as a challenger within the industry, but we are one of the best kept secrets in the hotel business, outperforming on ADR, RevPar and occupancy. And we are still a challenger. The other thing I know now is that TSH will never be finished. By that I mean that we won't ever get to a stage that we look at the product and think 'yes, that's it, that's perfect'. The hotel industry needs to constantly evolve and embrace new opportunities. We are already looking at Generation Alpha and tracking that generation, the oldest may only be seven years old now, but in 10 years time they'll be walking through our doors as customers. They are going to want very different things from today's customers. It's better to embrace the excitement of constant innovation and change. I am happy to carry on learning for as long as possible."

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