The most innovative minds and aspiring entrepreneurs take to popular crowdfunding sites, such as Kickstarter, in order to launch a campaign and generate funding for their own ideas, inventions and projects.
Crowdfunding sites have been used throughout the hospitality industry in order to generate the funds needed to create hotels with a purpose — or hotels that give back in some way to their community. For example, the Hotel con Corazon in Nicaragua, uses its profits to invest in an educational foundation in the area. According to 4Hoteliers, This hotel has begun a crowdfunding campaign with a goal of creating 10 additional "hotels with a heart."
One of the largest crowdfunding success stories in the hospitality industry took place in April 2014. According to Hotel Innvestor, the campaign raised $1.5 million in order to build a new nightclub at the Hard Rock Palm Springs Hotel. The campaign was able to generate buzz by offering investors discounted room rates at the hotel as well as free cabanas by the pool during their stay. It took less than half a year for the project to raise all of the funds it needed in order to begin construction on the nightclub at the property.
Crowdfunding truly established itself in the hospitality and tourism industry when a successful campaign was launched to develop a hotel in Manhattan — one of the most exclusive and elite places to launch a hotel property. Through crowdfunding, about $12 million was raised to help complete the AKA United Nations Hotel-Condo, an extended stay property in the heart of Manhattan. According to the Boston Hospitality Review, this is just one instance that proves that crowdfunding will continue to play a more significant role within the industry in the coming years.
Kickstarter has also allowed hotel developers to raise the money they needed to create boutique hotels or bed and breakfasts, in different destinations across the globe. Travel and Leisure notes that the Runaway bed and breakfast, in Jamaica, was the first bed and breakfast in the world funded by the platform. The campaign was such a success, that the hotel has launched a follow-up campaign to create a production studio on-site where guests can shop for unique furniture styled in the same manner as the property.
In Spokane, Washington, a hotel and museum were recently created out of famed builder Kirtland K. Cutter's home. A crowdfunding campaign generated the resources necessary to rebuild the home as a museum that included a library as well as seven bedrooms that are available for guests to rent.
According to Tim Edgar, founder and president of Hotel Innvestor, the face of crowdfunding within the hospitality and hotel management industry is changing rapidly, and frequently.
"The conversations that we are having with potential investors and issuers now are completely different from the conversations we were having eight months ago. People now know what crowdfunding is. They’ve heard about certain hotels that have been crowdfunded."