Can the Conversion of Hotel Rooms Into Workspaces Save the Hospitality Industry?
Across the United States, hotels are feeling the effects of the coronavirus pandemic. According to Yannis Moati, the CEO of HotelsByDay, a booking platform for day-use hotel rooms, U.S. hotels are losing $400 million per day in room revenue, which adds up to more than $46 billion so far this year. But he may have a solution.
In a recent article in MarketWatch, Moati writes that hotels can no longer count on their previous driver of demand — travelers staying the night — so they should maximize and optimize their real estate assets in new ways. This includes filling the needs of guests who want to work remotely, and making hotels hubs of work and leisure for them. “With more companies warming to remote work, the satellite office is already emerging as a real estate hotspot,” Moati said. “And what are hotels?
“Evenly distributed satellite offices, all with reliable Wi-Fi, safety and cleanliness standards, natural social distancing and space to spread out,” he continued. “And many have amenities replace the perks [of] cushy offices: concierge, pool, spa, hot tub, gym, restaurants on-site, full conferencing facilities and in-house AV teams. Hotels are well-suited to becoming hubs of remote work.”
Moati also recommended that property owners and hotel management companies focus on local customers, since international travel has dropped by 80 percent this year. “As people travel closer to home, hotels actually have a bigger addressable market than could have been reasonably expected prior to COVID,” he said. “The funny thing about remote work and hyperlocal travel is that there has been a vocal minority of digital nomads living this truth for years.”
COVID-19, he noted, has brought this idea into the mainstream. “Hotels can now seize new revenue opportunities by catering to cooped-up remote workers eager to swap work-from-home with work-from-hotel — even if only for one day of super-productivity per week,” Moati wrote. “It’s a quick transition that has meaningful long-term implications for hotel managers and asset owners.”
Moati also predicted that hotels will switch from nightly rates to recurrent membership-based monthly rents, which will combine access to amenities into a variety of tiers. “Hoteliers will go through some operational and architectural reorganization to satisfy this new market,” he added.