Stay Alfred closes its doors permanently
Short-term rental company devastated by pandemic, CEO saysMay 20th, 2020
(Updated, 4 p.m. Pacific, 5/20/2020)
Stay Alfred Inc., a one-time darling of Spokane’s entrepreneurial ecosystem, is closing its doors permanently, says Jordan Allen, founder and CEO of the short-term rental company.
Allen says the company couldn’t stay afloat after the coronavirus pandemic—and resulting travel bans—abruptly stopped the company’s ability to generate revenue and new investor interest dissipated.
“My heart’s broken in a lot of ways,” Allen told the Journal in a videoconference interview on Wednesday, May 20.
The only thing that exceeds the 8-year-old company’s meteoric rise is its precipitous fall. As recently as early March, Allen and his leadership team were meeting with investors in attempts to secure a round of funding that would have generated up to $30 million, he says.
“At one point, we were a $100 million company. And now, it’s over,” says Allen, who was a Journal of Business Rising Star in 2016. “It’s amazing to think that a $100 million company in Spokane, Washington, could be wiped out by a virus from Wuhan, China.”
The company topped the $100 million mark in revenue in 2019, up from $66.5 million in 2018, and $25.2 million in 2016, as previously reported by the Journal.
Earlier this month, a Stay Alfred spokeswoman told the Journal the company planned to continue operating but would do so with a reduced staff and smaller national footprint of units. The company had targeted Aug. 1 as the date travelers could begin booking with the company again.
Allen says the last two weeks revealed that goal wouldn’t be attainable.
“We were trying to sell off assets, but there just aren’t a lot of buyers out there,” he says.
Stay Alfred managed vacation rental properties for owners in exchange for a commission fee. The company used a variety of websites to advertise the rentals.
Allen, who served in the U.S. Army from 2005 to 2012, told the Journal in 2015 that while on two weeks’ leave from serving in Afghanistan, he searched for lodging in downtown Denver during a visit to watch the Colorado Rockies baseball team. He found a condominium to accommodate friends and family just blocks from Coors Field. The experience kickstarted the idea to start a short-term rental company.
In retrospect, Allen says, the rental aspect exposed a “fundamental crack” in the business model.
“If we were doing this again, we would’ve looked to have owned more buildings,” he says. “But renting became the business model.”
Like many hospitality companies, Stay Alfred stopped renting properties once COVID-19 reached U.S. shores. Before issuing furloughs, the company had a total of 221 employees, with 146 based here. The company is headquartered at 2818 N. Sullivan in Spokane Valley, in part of the former Itron Inc. headquarters building.
This time last year, Stay Alfred brought on veteran business executive Steve Helmbrecht as president and chief financial officer.
Meanwhile, Stay Alfred’s rental inventory grew to more than 2,500 units in 33 cities by the end of 2019, up from 1,500 units in 32 cities at the beginning of 2019. In August, weekly business magazine Inc. selected Stay Alfred as one of 11 companies in the Spokane-Coeur d’Alene area to its list of the fastest growing private companies in the U.S.
Now, the company is currently left with roughly 50 employees—being paid with the help of Paycheck Protection Program funds—who are helping Allen to wind down the company.
Part of that effort, he says, is continuing to help customers who previously booked trips with Stay Alfred to find other companies who can help honor those existing reservations.
Allen says he’s also working to help remaining and former employees find employment elsewhere.
“Some of them have been with us since inception,” Allen says.
He says he’s moved from anger to denial to acceptance of Stay Alfred’s fate.
“We built an absolutely incredible team, and we wouldn’t have experienced the growth we did without having amazingly talented people in place,” he says.