MacA Suites final paper

David Addams Thuy Duong

Marshella Sanjaya Kathryn

WalenterTeam 1Micro-living Apartments

David Addams, Thuy Duong, Marshella Sanjaya, Kat Walenter

Table of Contents

Executive Summary…………………………………………………………….2

Mission Statement………………………………………………………………3

Management team………………………………………………………………3-4

Brand Personality…………………………………………………………….....5

Location…………………………………………………………………………6

Physical Building…………………………………………………………….....7

Accommodations…………………………………………………………….....8

Positioning Statement & Competition………………………………………….9-11

Target Market…………………………………………………………………..12

Demographics & Geographics………………………………………….12-14

Psychographics & Product Usage………………………………………14-17

Tentative Action Programs for Promotion……………………………………...18-20

Pricing…………………………………………………………………………...21-23

Expansion Potential……………………………………………………………...23

Exhibits…………………………………………………………………………..24-32

Before…………………………………………………………………....24

After……………………………………………………………………..25

Picture of the Room……...………………………………………………25

Possible Floor Plans..……………………………………………………26

Extended Stay Comparison……………………………………………...27

Cost Analysis…………………………………………………………….28

Survey…………………………………………………………………....29

Flyer………………………………………………………………………30

Map……………………………………………………………………….31

Short List of Steps for Completion of MacA Suites…………………......32

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Executive Summary:

Our company MacA Suites provides temporary housing in the form of micro-living

apartments located near MacArthur BART station. We provide small, yet upscale, temporary

housing. We seek to capitalize on the following: the micro-living trend, the high demand and

low supply of Bay Area housing, our location next to a transit hub and in the geographical center

of the entire Bay Area, and the influx of tech and hospital workers.

We plan to purchase and convert the Capri Motel at 722 West MacArthur Boulevard into

MacA Suites. Our freshly renovated building and rooms will contain all the upscale essentials

our guests want and need to provide for an excellent housing experience. The new trend of tiny

living spaces coupled with the high cost of Bay Area housing has many people looking for the

bare essentials, albeit up-scale bare essentials, in their urban dwellings. Also, many urban folks

spend the majority of their time away from home. They are primarily looking for a modern, safe,

and efficient living situation that promotes their urban lifestyle at an affordable price. Micro-

living fulfills these needs, especially when located near a public transit hub like the MacArthur

BART station. Furthermore, there are many temporary workers and housing-seeking new

arrivals flooding into the Bay Area. Therefore, our target markets are tech workers, hospital

workers, and new middle-class arrivals to the Bay Area. We will primarily market MacA Suites

using online vendor Airbnb which provides a platform for advertising, marketing, and payment

collections.

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In essence, we are an extended stay lodging facility with a fantastic location, a cool, hip

vibe, and modern marketing. MacA Suites will provide guests with a superior housing

experience while building a profitable and expandable brand for its stakeholders.

Mission Statement:

MacA Suites provides guests with modern, trendy, and upscale transitional housing at a

transit-friendly location that is fully furnished and equipped to meet their needs.

Management Team:

David Addams – Chief Executive Officer.

David brings over a decade of residential real estate investing, construction, and

management experience to MacA Suites. He’s also a life-long vagabond who has spent years

living out of a suitcase. He’s used CouchSurfing and Airbnb services as both a guest and a host

with more than 50 glowing reviews. David’s professional background includes multiple

President’s Club sales awards and over-seas service as a US Army officer. His leadership

education includes graduating from West Point and a 2015 anticipated MBA degree from Cal

State, East Bay.

Kathryn Walenter – Chief Operations Officer.

As COO, Kathryn offers three years management and program development experience

to MacA Suites. Kathryn understands the need for transitional housing since she has moved

houses fifteen times in twenty years. Her undergraduate degree is in healthcare administration

and management. She knows how especially important temporary housing is for contracted

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hospital workers. Kathryn is expected to earn her MBA degree in 2015 from California State

University, East Bay.

Marshella Sanjaya – Chief Financial Officer.

Having experience as an international student from Indonesia, Marshella understands the

needs and expectations of transplants seeking temporary housing. She quickly immersed herself

in the Bay Area’s rich cultural diversity and became an expert in negotiating and communicating

with foreign customers. Having worked in the research and development department of one of

the biggest food company in Indonesia, Marshella has experience in budget management, cost-

benefit analysis, forecasting needs and the securing of new funding for the company. She is

expected to graduate in 2015 with an MBA from California State University, East Bay.

Thuy Duong – Director of Marketing.

Thuy has earned her Bachelor’s degree at the University of California, Davis. Her

compassion for temporary housing developed during her undergraduate studies in which she had

moved five times in four years. She has a reputation for providing excellent customer service

through her past professional employment with Donna Karan of New York, Kaiser Permanente,

Sutter Health, and UC Davis Stores. She and her marketing team endeavor to launch the next

big thing for micro apartments in Oakland, CA. Thuy is expected to graduate from California

State University, East Bay with an MBA in Fall 2015.

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Brand Personality:

MacA Suites’ brand personality is modern and trendy yet practical, personal, and fun.

We focus on providing superior accommodations and excellent housing experiences. Our

brightly colored building and rooms will have modern Ikea-type furnishings that look chic and

yet fulfill a practical function. Our brand is intensely Oakland. It will celebrate the local

benefits and diversity of our MacArthur BART community. We seek guests’ feedback that says

MacA Suites provided cool and convenient housing with incredibly knowledgeable and friendly

hosts.

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Location:

Our location is a prominent feature of our concept. MacA Suites will be located within

two blocks of the MacArthur BART station. This area is often referred to as NOBE – North

Oakland, Berkeley, and Emeryville. It is the geographical center of the entire San Francisco Bay

Area with incredible highway access. The Bay Bridge is just a mile away, and the on-ramps to

I580, Hwy 24, I80, and I880 are just a few blocks away.

We chose the western side of MacArthur BART as our location, which is the Longfellow

neighborhood of Oakland. The MacArthur BART station is currently going through a multi-year

renovation to be completed in 2017 with the objective of further revitalizing the area. The

MacArthur BART station services three of the five East Bay BART lines and is a major transit

hub. Shuttles run from this station to three major local hospitals. Google and Facebook also run

employee shuttles from this station. The city of Emeryville operates a free Emery-go-round

shuttle from MacArthur BART to biotech buildings, PIXAR, and the Bay Street Mall.

Additionally, the MacArthur BART hosts a number of car sharing parking spots such as ZipCar

and City Car Share. Our guests will benefit from having rapid and affordable transportation to

nearly everywhere.

In addition, our location provides walking access to the very trendy Temescal

neighborhood full of acclaimed restaurants, the big box stores in Emeryville, and the new jazz

corridor on MLK. Guests can eat, shop, and enjoy life without a car.

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Physical Building:

There are three options to create these micro-living apartment units:

Option 1: Converting one of the motel-style apartment buildings located near MacArthur BART.

-- Pro: Each unit already has a kitchenette. Lowest entry-cost. Easier financing.

-- Con: Evictions, rent-control issues, and city-permit hassles. None currently available to buy.

Option 2: New construction on an existing empty lot.

-- Pro: Build to suit MacA Suites. Lower maintenance costs. Possible government grants and

loans as an urban in-fill project.

-- Con: Long completion process. High cost of lot purchase and new construction. Low

probability to obtain financing.

Option 3: Converting one of the eight present-day motels located on West MacArthur Blvd.

-- Pro: Existing permits to operate. No rent-control issues. Social good of converting an eye-

sore and low-end motel into modern and trendy MacA Suites.

-- Con: None currently for sale. Units currently lack kitchenette. High cost to rehab.

Decision:

MacA Suites will pursue option 3. We have scouted all eight motels on West MacArthur

Blvd and prefer the Capri Motel for its size and location as the only motel on the block. This 28

unit motel is located at 722 West MacArthur Blvd and only two blocks away from the BART

station.

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Accommodations:

Each accommodation will be modern, trendy, and Euro-chic. Our rooms will be around

250 to 350 square-feet. Each will provide a full bathroom, twin-sized bed, kitchenette, and small

living quarters in a studio-like fashion. Furthermore, each unit will be fully furnished with

modern and practical furniture in the Ikea-style. It will be finished with granite countertops, tile

bathrooms, and faux wood flooring. There may be some layout variations depending on the

building’s features.

Also, all rooms will be equipped with a large, wall-mounted television above the table

that doubles as a monitor. The table will serve a dual function as a workstation and dining

surface. In addition, most rooms will have a balcony and segregated entrance to prevent the

motel feel of walking down an outside corridor to one’s room. The difference in room sizes will

account for either a single or twin-sized bed. These features will provide our guests with very

chic and comfortable living accommodations. Our guests will have everything they need to

enjoy their experience at MacA Suites.

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Positioning Statement and Potential Competitors

To people seeking temporary lodging, MacA Suites is a superior transitional housing

option that provides modern, convenient, and transit-friendly accommodations. We seek to

welcome every guest with a wonderful housing experience.

Our target market consists of three main categories: tech workers, hospital workers, and

house-hunting transplants. We believe our target market wants clean, secure, and convenient

accommodations. In addition to fulfilling the above wishes, we believe our modern and upscale

image combined with our extra amenities such as laundry services and bike rentals will make

each guest’s stay a superior experience. Also, our location within two blocks of the very

centrally-located and newly renovated MacArthur BART station adds to our value proposition.

Therefore, our temporary housing value proposition includes the following: affordable, clean,

secure, convenient, modern, upscale, and transit-friendly.

Our main competition is other sources of temporary housing which breaks down to three

main competitors: hotels, motels, and private Airbnb accommodations. There are no hotels

within a couple of miles of the MacArthur BART station. There is an Extended Stay hotel and a

Marriott in Emeryville about 2 miles from the BART station. They are too far to easily walk to

MacArthur BART. Also, they are both surrounded by parking lots and big box retailers which

we believe is not attractive to our target markets. Therefore, we have positioned MacA Suites

away from the hotel competition. Furthermore, their price points are above ours and in the range

of $150-250 a night. MacA Suites provides a much more convenient urban experience with

superior transit options.

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There are many motels on West MacArthur Blvd. and within a few blocks of the BART

station. While MacA Suites is on par with these motels for location and transit, we offer a far

different experience in totality. The majority of these motels are filthy, crime-ridden places that

rent rooms by the hour. We believe our target market groups would not consider staying in these

motels despite their lower price points. They are not clean, secure, or modern.

The competition from AirBnb private hosts offers the most serious threat. It is difficult to

compete against this dispersed group that offers a more personalized housing experience.

Additionally, many of the local hosts have a moat of positive reviews. While we too plan on

marketing MacA Suites on AirBnb, it will be some time before we have parity on the number

and quality of reviews. However, we believe there is an excess demand for temporary housing

and a limited number of hosts within walking distance of the MacArthur BART station. Also,

staying with private AirBnb hosts offers a more varied experience than staying with a

commercial entity like MacA Suites. In conclusion, MacA Suites is most likely on par with

private AirBnb hosts for affordability, cleanliness, and security. Overall, we are probably

superior on convenience, modernity, upscale-ness, and transit-friendliness.

Government regulation and taxes are another area to consider in comparison to our

competition. When taking ownership of the Capri Motel, MacA Suites will also assume its

motel license. Therefore, a percentage of our guests’ fees will be paid to the applicable

government entities as hotel/motel taxes. These charges will be the same as for our competitor

hotels which equals a level playing field. However, current Oakland Airbnb guests do not pay

these fees. San Francisco and other cities have recently started charging these fees to Airbnb

guests in their cities. We feel that Oakland will one day soon follow suit, and thus the taxes will

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be equal for all guests using private Airbnb accommodations or staying in a facility such as

MacA Suites.

Our position in respect to the competition is strong. We exceed the desires of our target

market on most criteria and believe the high demand for housing located near transit hubs will

provide for a growing market.

MacA Suites’ internal mantra is “modern, convenient, and transit-friendly housing”. Our

external mantra or tag line is “trendy, transit-friendly, transitional lodging”. However, we would

like to conduct further research before releasing this external mantra.

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Target Market:

MacA Suites will be focusing on three target markets: tech workers, hospital workers,

and transplants. We plan to market MacA Suites using websites like AirBnb. These sites allow

consumers to choose their housing according to the listing profiles. Therefore, the customers

will mainly be finding us. We will tailor our profile and descriptions to attract our target

markets. Our CEO David Addams frequently uses Airbnb to rent a room in his home which only

a few blocks from our planned location. Using examples provided by David, we were able to

further define our target markets. Although they may come from different backgrounds, our

customers have commonalities. MacA Suites consumers do not have kids and are between the

ages of 25 and 35. They are new to the Bay Area and are “drifters”. They can be of any

ethnicity, nationality, and sexual orientation. All consumers have homogenous preferences.

They desire a clean, upscale temporary home in a location convenient for their lifestyles.

Demographics and Geographics

The tech workers are Generation Y (millennials) and Generation Z individuals. This

group is made up primarily of unmarried male workers like Eric, a tech worker who David

hosted at his home. Eric is a 29-year-old Pandora employee who was looking for housing for

one week while travelling for work from New York City. Tech workers can be American like

Eric or from outside the United States. They are of any ethnicity, however Asian and white are

the most common1. The tech workers’ geographic locations are near tech companies like

LinkedIn and Zynga. They commute to Oakland, Emeryville or San Francisco for work. They

1 Heer, Nick. "Diversity of Various Tech Companies By the Numbers." PIXELENVY. August 13, 2014. Accessed October 24, 2014. http://pxlnv.com/blog/tech-company-diversity-stats/.

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http://pxlnv.com/blog/tech-company-diversity-stats/


are college graduates with ages varying from mid-20s to mid-30s and income ranges from

$40,000 to $100,0002.

The majority of hospital workers are in their mid-20s to 50s3 with annual income ranging

from $50,000 to $100,0004. These workers are foreign or domestic and can be of any ethnicity

and gender. For our price point, we are targeting nurses and doctors who are not in permanent

positions at the hospital where they work. An example of a consumer from this group is a

woman named Dawn. Dawn is a 48 year old registered nurse who used Airbnb during a one

month stay in Oakland while working at UCSF Benioff Children’s Hospital Oakland. Hospital

workers like Dawn could be contracted workers or completing a residency or internship. Our

product will be especially appealing to travelling nurses who do contract work at a location for

three months at a time in response to nursing shortages. MacA Suites is centrally located to

capitalize on the three local hospitals nearby: Summit Hospital, Kaiser’s new flagship hospital

on MacArthur Blvd, and UCSF Children’s Hospital.

The transplant group targeted by MacA Suites is the most diverse group. Transplants are

between 25 and 35 years old with the majority around 30. They can be of any gender, sexual

preference and marital status. These are people who have recently moved to the Bay Area.

According to the Bureau of Labor Statistics, there was a 3.4 percent rise in employment

between January 2012 and January 20135. The rise in employment rates encourage more people 2 "Dice Tech Salary Survey 2012." Dice Presentation. January 22, 2013. Accessed October 24, 2014. http://www.slideshare.net/canburak2/dice-presentation-16683946.

3 "Employed Persons by Detailed Industry and Age, 2013 Annual Averages." Current Population Survey (CPS). April 25, 2014. Accessed October 25, 2014. http://www.bls.gov/cps/industry_age.htm.

4 "Healthcare Occupations." Current Population Survey (CPS). January 8, 2014. Accessed October 25, 2014. http://www.bls.gov/ooh/healthcare/home.htm.5 "Job Hunting." Relocating to San Francisco. January 1, 2014. Accessed October 25, 2014. http://relocatingtosf.org/article/5/.

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http://relocatingtosf.org/article/5/

http://www.bls.gov/ooh/healthcare/home.htm

http://www.bls.gov/cps/industry_age.htm

http://www.slideshare.net/canburak2/dice-presentation-16683946


to relocate to the Bay Area, and thus create more demand for temporary housing. Valerie is a

transplant from New York City who found David on Airbnb during her relocation to the Bay

Area. She was a language teacher in New York but made the move to Oakland to start a career

with a tech company. Valerie used housing found on Airbnb for one month before she found

permanent housing in the Bay Area. In addition to relocated workers, CAL Berkeley graduate

students and law students are a significant part of this transplant market. This market includes

individuals of any ethnicity. They can be American or foreign. Their incomes will range from

$35,000 to $100,000.

Psychographics and Product Usage

Tech workers are intellectuals to whom the next big thing in technology is very

important. They are the “Mark Zuckerberg types”: nerds who were uncool in high school but

are finding success working in the tech world. Their typical attire is jeans, a t-shirt and a hoodie.

MacA Suites’ success with these customers is important since they are informed consumers who

will use our product heavily. Tech workers value their time more than money, but they expect

quality and convenience from what they purchase. This is why MacA Suites is the ideal

temporary living situation for them. Since tech workers often do not have cars, close proximity

to BART for commuting to work is necessary. In addition, there are plenty of trendy coffee

shops such as the new Star Trek Café near MacA Suites. This is essential because techies are

fueled by coffee, and they usually get their work done or meet up with friends in cafes. Many

bars and restaurants are also available nearby; this proximity is important as tech workers value

play time and eat most of their meals out. Although they do most of their work on a computer,

tech workers lead active lifestyles. For exercise, they take part in the newest fitness fads like

yoga and indoor rock climbing, and so they prefer to be near yoga studios and indoor rock gyms.

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In the little time tech workers do spend at home, they will spend most of their time on the

computer with headphones on. It will be important that they have a clean workspace, nice desk

and fast wifi, all of which MacA Suites provides. Techies keep to themselves and do not interact

with others in the building often, and they will use email as their primary communication with

management to report problems or ask questions. As typical millennials, tech workers like to

multitask. They will appreciate that their suite has a large TV over their desk so they can watch

while working on their computer.

Hospital workers are active people who lead busy and stressful lifestyles. Both doctors

and nurses are friendly and approachable people, however doctors have noticeably larger egos.

The majority of their time is spent at the hospital working long shifts. Since they are contracted

workers and not from the Bay Area, they may not have a car. Our proximity near BART is

important to commute to work and explore the area. Being close to MacArthur BART

specifically is beneficial since they will be able to catch the free shuttles that run from the

MacArthur station to the three local hospitals. Hospital workers will appreciate the central

location of MacA Suites since they will want to see all the tourist attractions the Bay Area has to

offer. They will also want to check out the night life in San Francisco, and could go to any event

or club in any area depending on what music they like, their personality and their sexual

preference. These workers value health and wellness, and they will like living near gyms and

yoga studios. In their spare time, they will take advantage of the nearby music venues and bars.

Hospital workers are too busy to cook. They will like the selection of restaurants near MacA

Suites for dining in or ordering out. Albeit rare, when hospital workers are home they will

appreciate the accommodations at MacA Suites. Safety is important, and they will like the

security provided at these upscale apartments. Hygiene is also a necessity, and they will like the

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clean and simple look of the suites. Hospital workers are the most likely to use the cleaning

service provided once a week for an additional fee. They are not likely to interact with others in

the building when they are home. The majority of nurses work three 12 hour work shifts per

week6, so they will want to spend their time at home catching up on sleep and will appreciate the

quiet environment of MacA Suites.

Transplants can have any career, values, lifestyle and sexual preference, and so this

subset of people will vary the most. The commonality between all transplants is they are in a

critical life transition. Time is more important to them than money, and they value convenience.

Transplants will be the most enthusiastic about our product since their overall outlook will be

positive during their relocation. They will use BART to explore the Bay Area and commute to

work or school since they may not have a car. They will like being near restaurants and bars

since they are not familiar with the area and will want to find all the best spots in town. Students

will want to be near music venues and will spend a lot of time hanging out in San Francisco.

Those who relocated for their career will be more concerned about house hunting, and they will

like MacA Suites central location. House hunting in the Bay Area can be a long process. Over

the past ten years, housing developments have not been able to keep up with population growth

since 75,000 people moved to San Francisco yet only 17,000 new housing units were built in the

city7. Transplants will appreciate having comfortable temporary housing since the length of time

6 Witkowski Stimpfel, Amy. "The Impact of Hospital Staff Nurse Shift Length on Nurse and Patient Outcomes." Scholarly Commons, 2011. Accessed October 25, 2014. http://repository.upenn.edu/dissertations/AAI3475941/.

7 Bilton, Nick. "The Housing Market With Nowhere to Go (but Up)." The New York Times, March 2, 2014. Accessed October 25, 2014. http://bits.blogs.nytimes.com/2014/03/02/the-housing-market-with-nowhere-to-go-but-up/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2&.

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house hunting can take is hard to determine. All transplants value safe, upscale and sustainable

living. They will appreciate the chic and clean feel of MacA Suites. They will be excited to

participate in micro living which is the new big thing for green consumers.

Good reviews from previous customers will increase demand, so each subset of consumer

will be repeat users. Once an employee in a company has a positive experience at MacA Suites,

he or she will share this experience by word of mouth and on the company’s intranet.

Additionally, agents whose clients had a positive experience at MacA Suites will continue

encouraging clients to use our product. Positive reviews and referrals will build our business.

By understanding the needs of our target markets and fulfilling them, we will provide a superior

housing experience and a successful business.

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Tentative Action Programs for Promotion

MacA Suites is dedicated to providing our guests with a modern, convenient, and transit-

friendly housing experience. We aim to promote our strong branding of trendy, transit-friendly,

transitional lodging to our guests.

Being situated near the MacArthur BART station provides an advantage in helping MacA

Suites create awareness of our micro-living apartments. Since our target market will have access

to many transit options, we will use this as a medium to advocate our business growth. We plan

to utilize advertising such as banners, billboards, street benches, signage on buses and trains

along with big posters around the SF Bay Area BART stations. Additionally, we will have our

staff members pass out bookmarks, business cards, stickers, and pens to BART riders entering

and leaving the stations. Each guest will depart MacA Suites with a branded pen, business card,

and logo bumper sticker.

We will post flyers and business cards to bulletin boards at local restaurants, shopping

centers, and nearby hospitals to extend awareness to the community. We will also host an open-

house for neighbors and local business owners. Likewise, we will host a media day and invite

travel magazines, newspapers, and other travel media outlets. In particular, we will target the SF

Chronicle travel section, Sunset Magazine, and the Lonely Planet.

Our promotional plan to stimulate Airbnb and Yelp reviews, as well as Facebook likes,

includes offering a $5 breakfast coupon to a local eatery called MLK Café upon checkout for any

guest who has written a review or ‘liked’ us. Social media will be a major advertising tool to

benefit our business growth and appeal to our target market. Targeted Facebook page-ads and

internet search words will create additional buzz about MacA Suites.

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Our company will join the Longfellow Community Association neighborhood Facebook

group. We will also target ads to this group which is comprised of over seven hundred

neighborhood members. Our guests will see shared photos of rooms and get feedback from

existing members in this group. This social media outlet will create realistic expectations for our

guests. It will also serve to persuade and remind our guests of MacA Suites’ promise to provide a

phenomenal temporary housing alternative. Furthermore, our guests will be able to find MacA

Suites on Yelp where they will see constructive reviews and ratings by elite Yelpers.

We also plan to promote MacA Suites on Lonely Planet, the largest travel guide book

publisher in the world. Advertising on the Lonely Planet webpage will help expand our

temporary housing option to foreigners relocating to the bay area. This will serve as a strategy to

expand our branding and attract a future target market. Over time, our business will develop

with robust customer loyalty, support and reviews, in which we will consider replicating MacA

Suites near other BART stations cities.

AirBnb will remain our primary marketing and advertising tool. Airbnb primarily

organizes its listings by geography with a user searching the map feature for available listings

and then clicking on the location for more information. We anticipate MacA Suites to be one of

the closest listings to the MacArthur BART station. By utilizing AirBnb’s reservation services,

our guests will have access to photos of rooms, lists of amenities, and verified reviews. AirBnb

also provides a messaging option in which the guest and host can exchange questions and

answers with each other. These features will advocate realistic expectations and peace-of-mind

for MacA Suites’ guests and hosts. AirBnb will allow MacA Suites to surge-price our rooms and

vary the minimum number of days-of-stay required. As a host, we can also set and change the

weekly and monthly prices reasonably with seasonal trending. The ease with which we can

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change our pricing parameters will help maximize our profit margin. Additionally, AirBnb will

assist our company to regulate payment collections.

Through these advertising tools we anticipate that media and word of mouth will create a

high level of awareness for our company. It will attract guests to seek out our trendy, convenient

and transit-friendly housing option. Guests will be exposed to extensive information as well as

positive feedbacks about MacA Suites’ lifestyle. Our business will have a steady growth

potential through these promotional campaigns.

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Pricing:

MacA Suites primarily uses Airbnb as a platform for customers to book their stays.

Airbnb charges both the guest and host a 3% transaction fee. For this fee, Airbnb offers a

wonderful advertising tool, handles the distribution of funds, and mediates all disputes. Through

Airbnb, potential customers will be able to connect with us and send their lodging inquiry.

MacA Suites will review the customers’ background, which includes their profile, workplace,

Facebook page, and reviews from previous hosts. If looking for more information, we may

message them back to ask additional questions such as their reasons for staying, current situation,

and housing needs like any special requirements. Guests makes their inquiry and the host can

accept or decline them. There is also an ‘instant book’ feature that automatically accepts a

guest’s inquiry as a confirmed reservation which we may selective choose to utilize at our

discretion. The pricing for each customer will vary depending on supply and demand,

seasonality, length of stay, and special promotions or discounts. We can adjust our prices in

Airbnb with just a click or two.

We will change our rates based on supply and demand. When there is a high demand for

temporary housing in Oakland and San Francisco Bay Area and/or we have few vacancies, our

price will rise. Similarly, when our supply of vacant rooms is high and the demand low, our

price will fall. Oakland has been experiencing an increase in hotel demand, especially on

Mondays through Fridays in response to an increase in business travel. Additionally, rapid

increase in prices may occur on weekends in order to take advantage of an increasing surge of

visitors for numerous events around the area.

Furthermore, seasonality plays an important role in our pricing strategy. David’s

experience as an Airbnb host finds that the peak season is between mid- May through mid-

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October. There are many festivals and events planned in between these months, such as Outside

Lands, Hardly Strictly Bluegrass, Burning Man Decompression, Gay pride, Bay to Breakers, and

the Blue Angels air show8. In addition, the graduate program at University of California

Berkeley begins in August and many students will be looking for temporary accommodations

while searching for more permanent housing. Also, many companies are relocating their

employees during the summer months due to schools being out of session. Our prices will

increase during the peak season and decrease during the slower winter months.

Our price range also varies based on the length of stay. Airbnb allows for different prices

including a nightly, weekly, and monthly rate. The price for a week or month long stay will be

discounted compared to the nightly rate. Our price range is $100-150 per night for daily rate,

$80-120 per night for the weekly rate (80% off the regular price), and $70-105 per night for the

monthly rate (70% of the regular price). Although the goal is to achieve 100% occupancy, we

still need to make a profit by minimizing the cost. Therefore, when we have a high occupancy

rate, we will set a minimum length of stay for the rest of the vacant rooms. This policy will help

minimize our cleaning costs and work time needed to check in and out a guest.

Airbnb allows for the host to offer a special price to a guest. We anticipate some guests

will ask for a discounted price. Depending on our supply and demand as well as the guest’s

particular situation, we may, on a one-off basis, offer a guest a special price. For instance, we

many offer a special rate to an employee of Google or a visiting contracted nurse working with a

high-profile placement agency with the goal of gaining access to the employee’s colleagues

through positive reviews, company intranets, and word-of-mouth referrals.

8 "Best Times to Visit San Francisco." Best Vacations: Top Destinations and Hotels. January 1, 2014. Accessed November 22, 2014. http://travel.usnews.com/San_Francisco_CA/When_To_Visit/.

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MacA Suites will also generate additional revenue through other fees. Airbnb allows the

host to charge a one-time per visit cleaning fee which we will set at $25-$35. Also, we will offer

bike rentals, an atm with a surcharge, and either on-site or off-site laundry services for added

fees. We will continue to look for ways to increase revenue through added services and will

explore vendor partnerships like with car share and ride share companies.

Expansion potential:

We envision expansion of the MacA Suites concept to other BART station locations

throughout the Bay Area. More specially, we see an opportunity to make a sister location near

the West Oakland BART which we would name WO Suites. The West Oakland BART is only a

ten minute train commute to downtown San Francisco. Furthermore, all five East Bay BART

lines stop at West Oakland.

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Exhibits:

24 |

BEFORE


Picture of the Room:

25 |

AFTER


Possible Floor Plans:

26 |


Rate Comparison:

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Cost Analysis:

Start-up Cost Projected Annual Profit

Cost of Motel $2,000,000 Revenue goal per room per month

$2500

Remodeling

$150 /sq. ft.

300 sq. ft. /suite

$45,000 Months per year X 12

# of suites X 20 # of suites X 20

Total Remodel Cost

$900,000 Total Annual Revenue

$600,000

Margin of error

X 10% Gross Profit Margin

X 17.5%

Total rebuild costs

$1,000,000 Projected Net Profit

$100,000

Total start-up cost

$3,000,000

1/3 cash down

$1,000,000 Annual Return on Investment

10%

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SURVEY:

Data from David Addams’ Airbnb guest profiles from August 2012 to October 2014

Tech

Workers

Hospital

Workers

Transplants

seeking

housing

Work

Trip

Vacation Visiting

local

friends or

relatives

# of people 14 2 11 6 7 5

% of total 31% 4% 24% 13% 16% 11%

Note that David does not accept guests for more than one month at a time which has

limited the number of visiting hospital workers because most are seeking a longer stay.

4 of the tech workers were also seeking permanent housing.

Our target markets: Tech workers, hospital workers, and transplants represented 59% of

the total guests.

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Flyer:

30 |


Map:

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Short List of Steps for Completion of MacA Suites

Task Team Member

1. Negotiations with Capri motel David & Marshella

2. Find interested investors Marshella

3. Purchase property Marshella

4. Architectural plans drawn David

5. Submit for permits Kat

5. Select contractors David

6. Rehabilitate the property David & Kat

7. Furnish rooms Thuy

8. Create marketing materials Thuy

9. Hire staff Kat

10. List on Airbnb, Yelp, and Facebook Thuy

11. Host open house and media day Thuy

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Documents

MacA Suites final paper