Hotels Without Strangers: Howard Ho Explains Section L

“I’ve never seen the type of guests we get today. We’re all here to create a great atmosphere, and I think we’re on to something.

Japan has a new answer to Airbnb. That is, the founders of Section L came to the realization that since Airbnb has been doing quite well with the idea of connections between guests and hosts, it might be time for hotels to address that gap in the more traditional hospitality sector. Describing the Section L concept as “building a hotel without strangers”, CEO Howard Ho explained to Hotelintel.co that the future lies not only in the relationship between service providers and guests, but also in breaking down the barriers between one guest and another.

Apartment-hotels are the ideal setting for such a vision because some of the guests will be making an extended stay and will come to know the neighborhood quite well, while others come in for shorter durations looking to make the most of their time in the destination. It’s easy to imagine how guest-guest interactions could enhance the overall experience for everyone.

Section L currently boasts 9 properties in the Tokyo area, each offering around 25-30 large rooms equipped with kitchen and laundry facilities. Expansion of the business to date has been slow, as we might expect for an idea which was coming to fruition just as COVID-19 loomed over the horizon. Back in 2019, the Japanese tourism sector looked especially appealing according to Howard, who had already gained significant experience in the country in developing a short-term rental business which had shown excellent growth. With the contacts he had acquired, a strong track record and exciting vision, and a sound understanding of this particular market, Howard launched Section L in 2020 with just two properties and the backing of a seed investor.

With COVID in the past, further Japanese investment arrived in 2023 and now Section L is aiming to expand geographically and also in terms of the size of its hotels and the services on offer. The current focus remains Japan, but Osaka, Kyoto, and Fukuoka are in the pipeline, while one major goal is to begin operating larger properties of 50-100 units, which is expected to allow Section L to have around 1,000 rooms in total in the next 3-5 years, representing a four- or five-fold increase on the current situation.

The community aspect of Section L is also developing. One project involves the in-house development of the app, named InterSection, which serves to connect guests to the hotel and each other, as well as letting them learn more about the local neighborhood and what’s going on. We asked Howard if this kind of social environment would be unique to Japan, or if it would translate effectively to other parts of the world, and he explained that in fact, 90% of Section L guests are currently inbound tourists, with many from the US, China, Korea and Singapore, reflecting the wider breakdown of tourist arrivals in Japan. With this in mind, the model could easily be transferred to other countries in the future, although the initial aim is to first establish a solid home base in Japan.

Staff remain a challenge in hospitality, and Section L is well aware of the need to focus on employer branding as a means to attract personnel. With predominantly inbound customers, the warmth and diversity of the staff are seen as key factors; there are currently 23 different nationalities working for Section L, which Howard sees as something that will become the norm in Japan in the next decade. He adds that it is vital that staff, or associates, are able to perceive a positive career path with the company. One example of this kind of progression is that six of the entry-level staff have already been promoted to supervisory roles within their first year through Section L’s own development program, and the idea of creating a strong internal pipeline for personnel will clearly be critical for the future growth of the company.

The experience and track record that Howard and his team bring in terms of real estate asset management, hospitality, and marketing provide investors with solid incentives to support Section L moving forward, yet the concept of the brand itself remains unique in that it relies upon the contribution of the customer. As Howard points out, Section L hospitality is a “mutual undertaking between guests and hosts,” and his observations to date seem to vindicate his faith. “Guests are very, very gracious,” he adds. “I’ve never seen the type of guests we get today. We’re all here to create a great atmosphere, and I think we’re on to something.”