Icelandic Hotel To Compete With Airbnb Market

Kari Young
Rendering of KEX Portland hotel

With so many hotels being built in Portland, KEX hopes to defy the odds with a new model that can compete with short-term rental

Share this article!

“Hotels are boring,” says Kristinn “Kiddi” Vilbergsson, owner of KEX, an Icelandic hotel business, which is slated to open its first U.S. hotel in Portland’s Central Eastside late this fall.

“They are sterile, they have no community,” he says, drawing a contrast between traditional hotels and what he hopes to accomplish with KEX Portland.

Vilbergsson doesn’t just want KEX Portland to be a new hotel. It’s a new kind of hotel, with luxurious amenities for locals as well as guests, and room-sharing options for travelers in a group and those seeking affordable accommodations.

I met Vilbergsson and KEX Portland Partner and General Manager Sean O’Connor at the warehouse where they stockpiled the new hotel’s furniture. The space brought to mind Geppetto’s workshop, with wood carved art-deco chairs and furniture, as well as lofted bunk beds to be placed in the hotel’s shared lodging units.

The interior will incorporate restored furnishing from the Netherlands, France, Belgium, Egypt and beyond. The hotel and restaurant will also feature a sustainable wine list, a performance space for local artists, a rooftop bar and sauna, which are open to locals as well as guests.

The KEX model allows for travelers at all price points to enjoy their accommodations, as well as experience the local food culture and art scene. Not to mention interact with Portlanders, who Vilbergsson says are the city’s greatest asset.

“The goal for KEX Portland is the same goal we had for KEX Reykjavik, which was to make the city a better city,” he says. “When we got [to Portland] I feel like they have the same vibe here. They want to do something that really matters.”

The word “Kex” means biscuit in Iceland, a reference to the remodeled biscuit factory that served as the home of the original KEX hotel. This piece of history isn’t lost on KEX Portland, housed in a renovated 1912 hotel.

Much like in Iceland, tourism in Oregon has taken off in a big way. A Travel Oregon report shows the state’s tourism has never been more lucrative. Tourists spent $12.3 billion in 2018, more than $5 billion of which they spent on hotels. Most of those dollars flood into the Portland metro area.

Though hotel revenue has skyrocketed over the past ten years, hotel occupancy dipped 2.2% from last year. The downturn could be indicator that the market is approaching oversaturation. 

KEX isn’t the only new hotel seeking to capitalize on Oregon’s status as a tourist destination either. With a Ritz Carlton on the way, as well as three new Hyatt hotels slated for opening in 2020, it’s easy to view KEX as just another drop in an ever-growing pond.

KEXdesigners1From left: Designer Halfdan Pedersen, Owner Kristinn “Kiddi” Vilbergsson, Executive Chef Alex Jackson, and General Manager Sean O’Connor

But KEX’s creative team isn’t worried. They believe their different way of doing things will set them above single-occupancy hotels, as well put them in competition with short-term rental services, such as Airbnb, by offering luxurious amenities and a vibrant location at a similar price point.

“Our data show some people would rather spend their money on experiences rather than where they sleep,” says O’Connor.

“We’re not a corporation. We are basically three businesses that have come together on this project,” says O’Connor, who believes the project already has the economic freedom to bring something new to the city. “We’re at the forefront of this new lodging mix that’s’ a hotel that also offers shared accommodation rooms.”

O’Connor says that although hotel chains in New York have had success with these kinds of hotels, the business model is so new banks had difficulty categorizing them.

“We’re not a traditional hotel, but we are not a hostel either, because we are much nicer and offer all these amenities,” he says. Given KEX Portland’s desire to innovate, its funding solution might not be surprising: “We ended up crowdfunding the building,” he says.

 To subscribe to Oregon Business, click here.