Tim Alpe, the boss of LyLo in Auckland, which features pod accommodation. Photo / Dean Purcell
For Jucy co-founder Tim Alpe, opening a new lifestyle budget hotel he’s overseen is a step in New Zealand’s tourism recovery and a symbolic leap from the “dark place” he found himself in as his business collapsed early in the pandemic.
Alpe is now managing director of LyLo, accommodation in central Auckland featuring a mix of 190 private sleeping pods, 37 private double rooms with shared amenities, and 70 private ensuite rooms.
While Jucy has had pod hotels in Queenstown and Christchurch for several years, LyLo is a four-year “labour of love” with new owner EVT. He said it is a fresh start and the venture is a big play for budget-conscious travellers now returning to the country where the traditional hostel sector remains short of beds.
Alpe and his brother Dan started Jucy in 2002 and it expanded to be one of the biggest tourism businesses in Australasia, with more than 4000 vehicles and 400 staff. It had a hotel division and a cruise operation.
But when Covid-19 hit, it was decimated. “It was a horrific period of time when the borders closed and 90 per cent of our business stopped overnight. There was a lot of soul searching, a lot of late nights and not a lot of sleep,” said Tim Alpe.
“But you get out of bed or you don’t. For us getting to today is a really big milestone – it’s a lot more exciting launching something new rather than closing something down.”
Jucy Group, which had operations in New Zealand, Australia, the United States and Britain, experienced a 90 per cent plunge in revenue as the pandemic hit. By the end of 2020 Jucy Rentals was in receivership and its assets sold to investment company Polar Capital.
“You build up a business for 20 years, things happen and things change and you go ‘holy ****’ - I definitely had some dark days.”
He said the support of his wife and three children had been invaluable and advised anyone facing a business crisis to not hesitate in getting help.
“Don’t be afraid to talk to anyone and don’t be afraid to talk to anyone.”
Australia’s EVT bought Jucy Snooze outright in 2021 and Alpe said having the ASX-listed company’s financial muscle (it has annual revenue of A$1 billion - NZ$1.08b) would allow LyLo to expand. The Jucy properties in the South Island would be rebranded and Alpe said opportunities in Australia were being scoped.
EVT has more than 140 cinemas (including Event in New Zealand) and has bars and restaurants here, and interests in 70 hotels with bands including QT and Rydges. It has a A$2b property portfolio and Alpe said the company had bought the LyLo site, in Cook St, formerly the Newstalk ZB building.
Alpe, 47, said working for a listed corporate was a big change of direction for him.
“They have a strong balance sheet and a real desire to grow. The ability to do something quicker and bigger is very much there under EVT and it very much dovetails into what they’ve done in the hotel space, management agreements, purchasing properties or the F&B [food and beverage] side of it.”
LyLo features a mix of personal sleeping pods, double rooms with shared bathroom, and private ensuite rooms, catering for a variety of travellers.
Each private pod is spacious and self-contained, featuring king single beds, bluetooth storage locker, multiple power and USB charging ports, fast Wi-Fi, individual lighting, fan, mirror and acoustic privacy screens.
Pods can be booked individually from $55 per night and female-only pod rooms are also available.
Private and ensuite rooms range from $109 and $159 per night respectively.
Alpe said community and shared social experiences are important at LyLo, and the big floor plate of the building had allowed plenty of lounge and breakout spaces.
While LyLo’s bar serves food, it has a large shared kitchen for guests to make their own food. There is a manager on-site but there is a digital check-in, similar to what happens with airlines.
“It’s very much about how do we remove the friction. How do we take away the queuing? Everything’s done online and you can check in either via your phone via the kiosks.”
Alpe said the 18-35-year-old market would be its core market, but other sections of the market were interested such as small businesses wanting affordable accommodation for their staff and digital nomads who use the shared workspaces while travelling. The big Miss Lucy’s bar serves food and drinks with cocktails starting at $10.
“The whole idea around the property is that it’s designed around locals and guests interacting with each other. When we spoke to our customers, we were saying what do they love about hostel life and living, they want to hang out with locals,” said Alpe.
The four-level hotel has about 26 staff. While there is still a high demand for workers, Alpe says there are signs of pressure easing, with growing numbers now arriving on working holiday visas. The business has an advantage – it can in some cases offer workers accommodation.
EVT chief executive Jane Hastings said Alpe had spearheaded the concept, together with the best expertise from its entertainment and travel businesses.
“We are excited to bring this first-of-its-kind offering to the Auckland market and look forward to opening more LyLo properties in the future.”
Alpe, whose contribution to tourism was recognised with awards including being named Ernst & Young Entrepreneur of the Year, was optimistic about the recovery of tourism in New Zealand. There had already been a strong bounce in visitor arrivals and spending since borders were reopened.
It is estimated more than half the beds in the hostel sector have gone during the pandemic.
He warned that the pursuit of high-end tourists – a strategy favoured by Tourism Minister Stuart Nash – could backfire.
“There may be a focus on the high-end, high-value tourist but we believe there’s a huge opportunity and our clientele is hugely important to the market,” he said.
“It’s dangerous to be focused on one sector of the market – right now people staying in our property will be the ones serving you at the bar.”
Many of those staying at places like LyLo stayed longer in the country and ended up spending more. They were, however, savvy about how they spend.
“It’s really cool to be smart with your money now,” said Alpe.
Younger travellers were also more intrepid and willing, and able, to travel in tougher economic conditions.
Rates for hotels have soared in one tourist hotspot while others have suffered.