Boutique Hospitality Has A New Luxury Player Everyone Should Know. Meet Method Co.

Few subjects are more roundly debated in business school and marketing and venture capital circles than how to build a brand.

The one conclusion that everyone seems to agree on, however, is that no one’s quite nailed the formula yet. Billion-dollar unicorns continue to fail spectacularly. While other start-ups, quietly bootstrapped and patiently scaling, seemingly take over entire industries overnight.

In the hotel and restaurant space, building a successful brand is arguably harder than anywhere else.

Concepts are continuously tested and retired. The prime real estate is limited, and the math even harder to make work. Goliaths frequently dominate (think Marriott and IHG). As a result, the window for innovation both physically and creatively is precariously narrow. Not surprisingly, the crash and burn rate of hospitality start-ups is inversely ferocious, even in seemingly fail-safe markets like Miami, San Francisco, and Manhattan.

So, if anyone ever told me that they wanted to build a hospitality brand from scratch in “second tier” cities like Philadelphia, Cleveland, Detroit, and Tampa, I’d likely tell them that has fool’s errand written all over it. In that case, I’d also be dead wrong.

When you first meet Randall Cook, 47, he doesn’t outwardly scream boutique hotelier or culinary pioneer.

The co-founder and CEO of Method Co. has an Ivy League education in international relations, then spent 15 years as a CPA at Price Waterhouse and eventually as executive vice president and COO for Korman Communities, the company that basically pioneered the furnished, extended-stay apartment concept in the 1980s.

When you’re with him, Cook’s air is calm and a little hipster meets country-club—in the kind of way you’d expect from someone who’s ascended the corporate maze and then left it behind. He’s also thoughtful and self-deprecating when he speaks—both of which run counter to the fiery, semi-narcissistic stereotypes most people think of when they envision the rock star personalities that typically go along with starting a hotel or restaurant brand.

Yet, it’s precisely this humble approach and slow simmering sense of strategy that have grown Method Co. from an 8-person, 28-unit apartment hotel start-up eight years ago into the 225-person, deeply diversified, design-centric hospitality juggernaut that it is today.

Method Co.’s roots date back to 2014, when Cook and co-founder David Grasso launched ROOST, a high-design boutique extended-stay hotel concept drawing from Cook’s Korman experience and Grasso’s real estate development chops. It was a gamble, Cook recalls, giving up his cushy, corporate gig to go out on his own. But Cook and Grasso both knew that there was a narrow opening to offer the organic design and experiential touches that traditional churn and burn hotels weren’t delivering while simultaneously bridging the gap between home and hospitality.

“For some time now I’ve been convinced that we’re seeing a convergence of consumer behavior where the residential experience wants to feel more like hospitality and the hospitality experience is becoming more residential,” remembers Cook of ROOST’s origin moment. “From the very beginning and ever since then, we’ve positioned Method Co. to be on the forefront of that intersection of convergence.”

The brand’s first embodiment of that hotel lifestyle meets residential living philosophy, ROOST Midtown Philadelphia, opened in 2014 with 28 furnished apartments and was an immediate success, maintaining year-round occupancy rates that surprised even Cook and Grasso. With proof of concept established, ROOST Rittenhouse launched two years later, adding another 28 apartments to the company’s portfolio. It also established Method Co. as one of the earliest players in the short-term furnished apartment rental space, which has been buzzing ever since with new start-ups and billions of dollars of venture capital froth—along with several well-known collapses due to the pandemic.

Around the same time, Cook and Grasso also made an audacious bet on Philadelphia’s up-and-coming Fishtown neighborhood—an historic shad fishing community turned hipster haven northeast of downtown Philadelphia where some of the city’s best foodie hotspots and nightlife were sprouting up. Cook and Grasso gambled that Fishtown needed an up-market hotel befitting of the neighborhhood’s off-beat, maker roots as well as a restaurant that could somehow blend its gritty, Philly past with its Millennial forward future.

The integrated creation born from that vision and an abandoned whiskey distillery—Wm. Mulherin’s Sons—opened in 2017 and now ranks on Philadelphia’s “Best Of” restaurant and hotel lists year after year, while also serving as an anchor for Fishtown’s commercial drag which has continued to bloom with other small businesses, bars, and restaurants in its wake.

Mulherin’s turned out to be just the beginning of Cook’s ambitions to test drive a place in Philly’s foodie scene. In 2019, Method Co. launched Hiroki right next door, minimalistically transforming what was once a rundown concrete block garage bay into one of the most anticipated and celebrated omakase-style Japanese restaurants in the U.S.. More importantly, Hiroki proved once again to Cook and Grasso that thoughtfully-designed, carefully-located, boutique hospitality concepts can always find the room elbow their way in where there doesn’t seem to be daylight if they’re calculated correctly.

“I have never been particularly concerned about the fail rate of restaurants because I’m not sure it’s any greater than any new or small business,” says Cook of Method Co.’s entrance into the restaurant space. “The reality is every new business is incredibly hard and many don’t make it. However, the pursuit of an idea, whether it’s a restaurant concept or any other business venture, tends to bring out the best ideas and efforts in an entrepreneur.”

On the heels of Hiroki’s rave reviews, Method Co. opened ROOST East Market the same year, which was Cook and Grasso’s first attempt to scale up as well as out, including 60 luxury one, two, and three bedroom apartments in a gleaming new mid-rise building in downtown Philadelphia with a rooftop pool, green roof, communal kitchen and library, bike share program, 24-hour concierge desk, and an on-site services team.

It was another audacious bet for the company, recalls Cook, particularly in terms of elevating the brand’s focus on the customer experience and infusing more luxury hotel-style amenities into its buildings instead of simply being design-forward and organically rooted into their neighborhoods.

“I have always tended to focus on studying the hotels and restauranteurs that have been consistently successful over a long period of time,” says Cook. “And the element we keep coming back to is the ability to make customers feel and experience something exactly how they intended to. Connecting with people and giving them positive experiences is so immediate and once customers are happy the rest should really take care of itself.”

In the grand scheme of Barry Sternlicht-style, Las Vegas-level hospitality, Cook’s daring to take on new concepts and challenges across the hospitality space over the past decade isn’t anything new. Executing on them successfully and repeatedly, however, is.

When I ask him, Cook immediately credits that success—as all great founders do—to his team and the talents that they bring. But he’s also quick to acknowledge the integrated approach that’s essential to every Method Co. project.

Method Co., says Cook, was founded on the premise that real estate, architecture, interior design, food, wine, music, branding, and delivering one-of-a-kind experiences are all convergent disciplines—particularly when it comes to creating an end-to-end hospitality company under one roof. Location shapes architecture. Neighborhood informs design. And design opens up new worlds of art, aroma, furniture, furnishings, lighting, horticulture, and sound that ultimately inform a unique brand identity.

“The common thread in everything that we do is both layers and a degree of something a bit unexpected,” explains Cook of Method Co.’s essential design approach. “I love being at the point in a project when we are humming along with the design and we say ok this is feeling pretty good but let’s take a sharp turn on a few things. I think it’s that turn that brings a little conflict into the design that brings feeling into our spaces.”

At the same time, adds Cook, Method Co.’s development philosophy is also based on knowing when a good thing’s already working and when not to take sharp turns. This includes using the same photographer for all the brand’s marketing for example, as well as the same architect, Morris Adjmi, to design every building to ensure consistency of vision, context, communication, and execution.

“Design is generally based on a view of the world and a value system,” says Cook. “It’s not dissimilar to being married. Once you find a good mate, it’s very rewarding to build a life together or in the case of Method, a brand together. We are also all super collaborative and it’s very difficult to find incredibly talented, hard-working design professionals that truly embrace the collaborative, creative process without ego or offense.”

When COVID-19 hit in March 2020, triggering the “hospitality Apocalypse”, Method Co.’s first major stress test to its business model could easily have put the breaks on the company’s momentum—or worse. Instead, Cook kept Method Co. on task and thinking forward, while hundreds of other hospitality companies scrambled to make up for prior miscalculations or hubristic decisions during the pre-COVID hospitality boom.

Part of that resiliency says Cook was based on the company’s sober approach to its balance sheet, which thanks to Grasso’s and Cook’s collective experience, ensured that they weren’t living on borrowed capital or over-gorged on master leases like many of ROOST’s short-term rental competitors when the floor dropped out.

“I’ve been involved in the furnished apartment niche for over 20 years,” says Cook, “So I’ve lived through many deals, in many markets, through many fluctuations. We’ve also studied other models extensively, which allowed for a strong understanding as to what works economically—and what doesn’t when the music stops.”

The other part of surviving COVID-19 was having faith in the brand’s essential vision for where it was always intended to fit into the broader hospitality landscape—and not wavering from it.

“Our projects generally have a wide range of appeal from those focused primarily on relocation to those focused on leisure, remote work, and staycations,” says Cook. “The other common element is about a fundamentally residential experience infused with hospitality and a cohesive brand experience. Most importantly, however, we see ourselves as an integral part of a larger process of ‘place-making’ and having a meaningful impact on a much bigger project, or district, or neighborhood. At the same time, we never try to force a brand or concept into a market where it doesn’t make sense.”

That conviction of intention assured that all of Method Co.’s projects that were already on the drawing board or under development stayed mostly on budget and on schedule even during the worst of the pandemic. In March of this year, Method launched ROOST Cleveland—the brand’s fourth location and the first outside of Philadelphia—in a restored 1915 former department store in the city’s revitalizing downtown featuring 62 luxury, furnished apartments. Three more ROOSTs are planned for Detroit, Philadelphia, and Baltimore opening in 2023 and another in Charleston in 2024.

Method Co. also made its first foray into the boutique luxury hotel space during the pandemic when most other hospitality companies were contracting, unveiling The Pinch, a 25-room hotel in downtown Charleston that softly opened in April, as well as The Quoin which launches in Wilmington, Delaware late summer this year.

Method Co. newest opening this month is ROOST Tampa, the company’s fifth location located in the city’s new Water Street Tampa development—a 56-acre, $3 billion joint-venture between Bill Gates’ Cascade Investment LLC and Jeff Vinik, the current owner of the Tampa Bay Lightning and minority owner of the Boston Red Sox.

ROOST Tampa is Method Co.’s largest and most ambitious project to date, including 97 studio, one, and two bedroom luxury apartments across six floors in the new Asher building as well as the brand’s first four and eight bedroom co-living units. ROOST Tampa also marks the unveiling of Method Co.’s lifestyle services, where the company is overseeing the building’s entire multi-faceted amenity program including a 30,000-square-foot amenity floor featuring Water Street Tampa’s largest rooftop pool, private cabanas, outdoor kitchens, an outdoor bar and entertainment lawn, as well as an indoor media and entertainment lounge, a state-of-the-art fitness center with indoor and outdoor spaces, a co-working lounge with private conference rooms, and a 24-hour concierge service.

Method Co.’s lifestyle programming at ROOST Tampa will also mark another first for the company, with events and offerings like culinary, social, fitness and wellness programs, cooking demonstrations, wine classes, outdoor screenings, book clubs, game nights, DJs on the pool deck, movie nights, and live acoustic music on the entertainment lawn.

As usual, Method Co. worked closely with Morris Adjmi on ROOST Tampa’s design along with Aaron Poritz through their FurnitureWorks studio to design custom furnishings that draw inspiration from an array of Tampa’s local cultural influences from the surrealistic art of Salvador Dali to the heritage of Ybor City, the city’s historic Latin quarter once known as the cigar capital of the world. The resulting design palette infuses warm walnut tones, vintage foliage motifs, hemp strappings, and colorful woven textiles into the apartments’ custom beds, consoles, rugs, sofas, coffee tables, lounge chairs, and other furnishings. While embracing the nostalgia and stories embedded in the city’s historic neighborhoods, ROOST Tampa’s apartments also offer the brand’s signature full-sized kitchens, modern appliances, streaming entertainment systems, and cutting edge in-room technology.

As for what’s ultimately underpinned Method Co.’s success as a brand as they’ve grown through the pandemic, Cook is quick to credit consistency and control as well as staying geographically conservative versus scaling cavalierly.

“In college I took ‘Math for Poets’ so my calculus has never been that good,” explains Cook of why Method Co. chooses to develop where it does. “But America is so full of all of these incredible and fast-changing cities outside of New York and Los Angeles and we’re excited to help these markets with underserved demand and solid growth potential get more national attention.”

“We also spend more money on furniture, artwork, touch points, and in-room technology compared to any of our competition so that we’re constantly developing, evolving, and honing our instincts. We’re always involved in selecting key building features in our new developments from the beginning, such as flooring, appliances, lighting, bath and kitchen fixtures, and cabinetry since these are all so important to our guests’ overall experience while also ensuring that we can create a cohesive brand across different projects in different cities.”

Lastly, building long-term development partnerships rather than grasping for newest shiny ring, says Cook, has been the most important thing to Method Co.’s consistent success.

“I think there’s more of an opportunity to create a significantly larger and more impactful hospitality company as a result of taking a measured, thoughtful, and patient approach to what we do,” Cook continues. “So, when it comes to the process ‘place-making’, we look for opportunities to work with best-in-class development partners where we can add the most long-term value to a project, continue to pioneer new hospitality and culinary concepts, all while making a meaningful impact on the neighborhood.”

In Tampa and beyond Method Co. looks like it’s going to continue to do just that for a long time to come.

https://www.forbes.com/sites/petertaylor/2022/08/15/luxury-hospitality-has-a-new-boutique-player-everyone-should-know-meet-method-co/