Kristinn “Kiddi” Vilbergsson is an Icelandic businessman and entrepreneur who founded the award-winning KEX Hostel in an old biscuit factory in Reykjavik in 2011. It combines shared and private bedrooms with a gastropub and live event space where bands play most evenings.
This fall, he’s expanding the concept across the Atlantic with the opening of KEX Portland in Oregon.
Click. caught up with him in the Icelandic capital to ask if hotels can manufacture trendiness for the millennial market and what he’s learnt about taking European hospitality concepts to the USA.
Click.: What are the pitfalls and pluses of moving a successful hostel concept from Europe to America?
Vilbergsson: The hostel name has a bit of a stigma around it in the American market - people often think it’s just young folk with backpacks, so in the States we’re just going to be 'KEX Portland'. In Europe, boutique hostels have been around a lot longer so people understand the concept better.
I think you’re seeing a new kind of hotel that mixes shared dorms with private rooms and the full-blown hotel experience with a focus on high quality F&B and value for money. But young travellers are getting more educated and they know that a hostel is not just a hostel any more, it’s somewhere to mix with locals too in a cool space and find out more about the city.
The US is a very professional and challenging market: you have to benchmark yourself with everything. Banks didn’t want to touch our project so we crowdfunded it with a company called CrowdStreet and now we have 125 US investors. It’s a good way to start a business because in this way we already have local people interacting in the firm – if you want to have a local flavour involve local people.
Click.: Can a hotel manufacture “hipness”? How do you know what will work in one place but perhaps not another?
Vilbergsson: No, it’s not possible. You can’t fake “hipness”, or use cool phrases or images, you have to be open and honest about it. As I’ve said, involve the local people. In Portland, for example, we are adjusting our ideas, concepts, design and F&B towards what we think is the coolest stuff about Portland itself. It has the same basics and ideas as Reykjavik but it’s totally different.
I know for sure that some of the big international brands came to Iceland to check out the KEX as a reference to what they should be trying to do. The difference between them and us is that we’re still a small local business. And we’re very experienced restaurateurs, so we know the F&B side of things really well.
Design has to justify where you are … it can’t come from a big office in New York. You can’t tell a story that is essentially about you being a big brand or travellers are not going to come.
A lot of our ideas come through beers! We work a lot with brewers, and we link us a lot with music and the arts scene. We’re very open to involving ourselves with the grassroots of the artistic community of the city – they’ll spread the word about the cool factor you want to have.
Click.: Do you think there’s a risk of hoteliers watering down their brand by trying to expand it?
Vilbergsson: I think there’s most definitely a risk in that … you can see how big brands are trying to follow a trend in the market and often doing a terrible job at it.
It’s going to be an interesting time when small players like us are expanding and the big players are announcing 15 hostels in a row … but they will be fighting over the word - hostel - to own it. But I think it’s important that the word hostel still has that meaning of being free and independent.
Click.: What can others in the hospitality industry take away from your success? And what tips do you have for any hoteliers looking to break into the US market?
Vilbergsson: Do lots of market research on where you want to go, both in terms of the city and the neighbourhood you want to locate in. Get those local people involved and trust in your brand. Be honest – you can’t be something you’re not. In our case, we’re a hostel out of Reykjavik with a Scandi-Nordic feel to it … but with our second property we want to be an ideas brand out of Iceland that now has an Oregon base.
Headshot image: credit to Snorri Sturluson
- If you want a local flavour, involve local people
- Design has to justify where you’re located
- The word hostel still has a positive meaning of being free and independent
- If you’re expanding, do your research on the neighbourhood as well as the city