19 Feb 2021 • Insights
Could hotel, home and office soon be one space?
New typologies that offer remote workers the ability to hop from location to location throughout the year could upend business travel, and other sectors too.
Business-hotel operators will be looking to the future with more than a little trepidation – what chance is there for bounce back in a world of remote work? Are there any strategies that can really counteract a predicted 19 to 36 per cent decrease in business-related air travel? It’s not that the relationship between work and travel has completely decoupled, however; as we’ve seen, there’s been a shift from traveling for work to travelling to work. But workers looking for extended stays simply to experience a change of scenery aren’t likely to want to be cooped up in an anodyne business suite, while the sort of hotel you’d want to spend several weeks in would be cost-prohibitive for all but the very few.
We saw that this is a once-in-a-lifetime opportunity to become the Netflix of the hotel industry
That hasn’t stopped some mid-range brands from trying to create new packages to adapt to this need, hoping their blend of 'not too corporate and not too expensive' might just work. For example, Citizen M now offers a set deal of 30 consecutive dates for £50 per night, which can be split over four hotels. ‘We saw that this is a once-in-a-lifetime opportunity to become the Netflix of the hotel industry,’ says Lennert de Jong, the brand’s CCO. Meanwhile Dubai’s Vida Emirates Hills has introduced ‘Long Stays at the Hills’, an initiative that allows guests to book by the month and includes food and beverage discounts, laundry service and access to office space.
For all their advantages, hotels remain a little inflexible and a little impersonal as a place to live, rather than just visit. Last decade’s image of the digital nomad is a poor fit for the majority of newly minted remote workers, who seem to want to roam at a slower pace and reduced distances. Think the next city over, rather than the next continent.
That’s why the long-term rental market looks to be one of 2021’s big winners. AirBnB reported that the volume of reviews by US guests mentioning ‘remote working’ or ‘work remotely’ has nearly tripled year on year. According to CEO of rental site Sonder, Francis Davidson, a spate of white-collar cabin fever has meant stays of two weeks or more now make up 60 per cent of its business, compared to less than a quarter pre-crisis. ‘Clearly with the pandemic and work from anywhere, a lot of people decided to do longer-term travel without having to take vacation days,’ Omer Kucukdere, CEO of Nestpick, another platform for long-term and furnished apartment rentals, told PYMNTS. ‘Our back-end growth was mainly driven actually by people that are spending a couple of months in a different location – a nearby location in most cases that they are driving to and working from that location.’
Kucukdere say his company was running at a 50 per cent higher booking rate through summer 2020 than before the crisis. Long term he thinks that employees, especially as Gen Z becomes a bigger part of the workforce, will avoid 12-month leases altogether and instead daisy chain a series of short-term lets in different areas throughout the year. Dutch apartment hotel brand Zoku clearly agrees, having recently launched a subscription offer that lets customers pay one monthly fee to take advantage of its accommodation, workspace and events programme in any of their Amsterdam, Copenhagen or Vienna locations.
Where that sweet spot in terms of lease length versus flexibility, service versus privacy, and consistency versus personality sits is up for debate. Some feel that an entirely new class of dwelling is needed to really serve this market. At the end of last year a new company, SHOC Holdings LLC, was launched with the aim of buying up distressed real estate, transforming it into home offices (SHOC stands for ‘ Shared Home-Office Cluster’) and marketing them via platforms such as AirBnB to a business community increasingly wary of hotel stays.
Conventional hotels will be taken over by technology driven shared-accommodation spaces
Now the company has developed its own proprietary rental format, 'the first design of its kind' according to CEO Greg Bankston. These five-bedroom units provide ‘the comfort of a residential property with the convenience of a business hotel meshed with the hi-tech amenities of a home office’ according to SHOC’s marketing. Each of the suites functions as a ‘business lodge’ equipped with high-speed internet and video conferencing facilities, as well as a fully equipped kitchen. The properties will also provide core office accessories such as printers and scanners. The intention is that small working groups can occupy one whole house and operate collaboratively, or individuals can take advantage of a longer-term let with hotel-like services but on a more personal scale.
‘Just like conventional taxi businesses are being taken over by shared-ride companies like Uber and Lyft, we believe conventional hotels will be taken over by technology driven shared-accommodation spaces,’ says Larry Wu, founding partner of UC Asset, the investment firm behind SHOC. ‘COVID-19 has expedited a transition in corporate work habits resulting in many people focusing on home office spaces. Our research suggests this trend will prompt travellers to choose home-office style shared accommodations over conventional hotels.’
Cover image: Brooklyn's Wythe Hotel is just one of a number of hospitality providers who have tried to tap in to the working-from-hotel trend.