Communism meets co-living in Semkovo, where an entrepreneur wants to transform a hotel built for members of Bulgaria’s former ruling party into a more modern hub for digital nomads and remote workers.
A dilapidated hotel originally built in the 1980s as a luxury hideaway for elite members of the Bulgarian Communist Party could soon be transformed into a co-living hub.
Entrepreneur Matthias Zeitler has a vision for the 200-unit property, nestled in the mountains in the village of Semkovo, more than two hours by car from capital Sofia. But first he needs to raise $6 million to fund its renovation.
He has launched a crowdfunding campaign, offering each of the apartments for about $30,000. The funds will be used to kickstart its refurbishment and create a “co-op” to manage the establishment. However the option to buy the building from its current owner expires in June.
Festival Tie-In
Investors have committed about $2 million so far, as the campaign has secured backing for almost 70 apartments. Zeitler is confident he’ll reach his target in the next couple of months.
He’s fortunate in that he can tap into an extensive network of digital nomads, as Zeitler also manages a co-working base in nearby Bansko and runs the town’s popular annual Nomad Fest. Last year 550 international travelers attended, while this year’s event in June is expected to attract 750 people.
As well as digital nomads, the entrepreneur is approaching businesses offering them the chance to buy a bundle of three to five apartments. “We want to have half corporate backers, half individuals,” he said. “Bringing these groups together will make a lot of sense. It’s a nice human resources benefit for companies to say ‘yes, we have a place here in the mountains, and you can use it.’”
Companies that want to do larger retreat events can also rent additional apartments from individual owners.
Past Meets Present
In some ways the hotel is a perfect fit for the target market. No expense was spared when the Central Committee of the Bulgarian Communist Party commissioned the building. The brief was to have a large, four-story high communal space, but small bedrooms, to encourage interaction. The hotel also featured a video room, bowling alley, swimming pool, sauna, gym and a library.
Zeitler’s business proposal almost draws on communist principles, too. “I believe it’s better for community projects if the community actually owns the business,” he added. “The apartment owners will form a co-op that owns all the commercial areas. This idea is instrumental to make the project happen, otherwise it will just be a building in the middle of nowhere.”
The idea is to also tap into the eventual 200 owners’ own network of nomadic connections, much needed to draw people to such a remote location.
Since the collapse of communism, the building also fell into disrepair, and has been vacant for the past five years. Before that it was occasionally used as a hostel. A new heating system and solar panels are priorities, but Zeitler believes the mostly concrete and metal building hasn’t deteriorated too much.
The challenge will be convincing people to invest. Crowdfunding isn’t your standard investment model, but membership-based hospitality company Outsite successfully raised $1 million using this method. And according to a new Questex Investor Intentions Index, investors are warming to co-living projects, as part of a growing appetite for limited-service brands, based on its research of hospitality real estate equity investors managing $320 billion of assets.
By June Zeitler will find out just how much appetite there is, and whether the communist-era hotel will find a new lease life accommodating a new generation of travelers.
Sidenotes
Inflation and the cost of living crisis could prompt more businesses to start handing out company credit cards for employees.
That’s according to expense management company Emburse, which polled more than 1,000 employees in the UK. It found 94 percent of 16 to 34-year-olds wanted the option of corporate cards, as they’re worried over long expense reimbursement processes, potential for late fees, and mixing personal and business spend.
But almost half (47 percent) of the younger workers said they wanted a corporate card due to the cost-of-living crisis.
There’s a lot of catching up to, as Emburse estimates just 6 percent of large businesses (with over 500 employees) enforce corporate card use for travel and expense.
Increasing fraud potential was cited as one reason, with employers concerned by the risk of the cards being hacked. “This is despite business cards’ ability to minimize the risk of wasteful or fraudulent claims, while offering an effective way to more effectively control and track businesses spend,” Emburse said.
The findings back up why so many travel agencies are pushing expense tech, but also why banks are increasingly keen to diversify into offering corporate travel services.
The concerns are mounting. Some 78 percent of 16-24-year-olds reported cost-of-living increases as a concern, up from 42 percent in January/February 2022.
“We’re all feeling the impact of rising prices, so it’s more important than ever for companies to listen to employees and understand how best to support them,” said Jamie Anderson, chief revenue officer at Emburse. “This is even more important for younger employees who often earn less and may not have large amounts of credit available.”
The survey looked at expense processes within UK-based businesses, with 1,242 employees polled on their spend preferences around expensing business travel and other related costs.