Tom Carroll, Head of EMEA Corporate Research, and Jessica Jahns, Head of EMEA Research, Hotels & Hospitality, at JLL
The way we work is changing. The traditional desk-based 9 to 5 is giving way to employee demands for greater flexibility. Of course, this has affected not just how we work but where we work too. Flex space is booming, with technology enabling employees to work from almost anywhere, be it an incubator, the local coffee shop or, the lobby of a hotel. We’re seeing different requirements from the workforce, which reflect a fundamental change in how individuals are working. As a result, businesses are not only rethinking their office designs, but also their locations. We are seeing a move away from the fixed desks of traditional offices and recent improvements in connectivity are allowing people to work where, when and how they want.
Flexible working is evolving quickly, and a growing number of hotels are now looking to take advantage of today’s mobile workforce by introducing their own workplace offering in underused communal areas, such as the lobbies. The Curtain hotel in London, for example, offers co-working facilities for guests and members, with The Virgin hotel in Chicago, providing space to its guests as well as the public through a monthly membership – the Virgin Commons Club. The Sheraton franchise has taken this one step further by redesigning over four hundred common spaces and lobbies to introduce ‘productivity tables’, which offer more space and connectivity for those working remotely.
Hotel lobbies provide a prime opportunity for co-working space development. These often under- used spaces can be transformed into busy, communal working areas, that in turn can provide an additional revenue stream for hotel operators.
Much like the existing business models adopted by flex office space providers, hotels that already have a workspace offering are benefiting from pay-to-stay memberships. The Hotel Schani in Vienna, for example, has started offering ten-day co-working passes for guests to take advantage of its work- friendly lobby space, costing around $100. Similarly, the Hotel Tryp by Wyndham in Dubai charges workers to use its spaces, but also provides access to its swimming pool, gym and unlimited coffee.
Other hotels, however, are not charging a fee for the use of their communal areas for work. New York’s Ace Hotel for example allows its guests to work in its lobby spaces for free, in the hope that this increases traffic to onsite cafes, restaurants and bars. By encouraging guests to stay in the hotel common areas free of charge, this model has the potential to help raise brand awareness. Take the Ace Hotel for example, a positive experience of someone who works out of the hotel lobby in New York increases the chances that they will be more likely to stay and work in the Ace Hotels in London, in the future.
Both co-working providers and hotels have a shared mantra: they both centre on providing high- quality service and amenities that enhance customer experience. Promoting employee wellbeing is fundamental to modern workplace design, and hotels already offer all kinds of services for guests targeted towards positive health, mindfulness and recuperation. The office environment has started to adopt these types of services, which in some instances resemble a fully serviced high-end hotel- style offering. Fully stocked communal kitchens, bars and coffee shops with waiter service and a 24- hour concierge are all things that many hotels already have in place -amenities that co-working providers are beginning to add to their own offering alongside desks and chairs.
And what else does the future hold? As it stands, growth of co-working space in hotels is very much in experimentation mode. The challenge facing hotel owners looking to diversify their offerings is how to introduce new services, without compromising the true purpose and value of the hotel: attracting guests, many of whom will be looking to unwind. Room management and operations should remain the core priorities, and lobbies must remain functional. Co-working areas need to be able to create the right environment that fits both the hotel’s brand and the needs of those using the space, perhaps by offering separate areas for those looking to relax and for those looking to work.
While it is safe to assume that hotels won’t replace the office anytime soon, we are likely to see more hotel owners and operators experimenting with workspace offerings and developing new, innovative services. With flexible working having emerged as one of the most significant trends transforming the real estate industry as a whole, and the demand for remote working environments increasing, there is plenty of reason to expect that the hotel co-working market will continue to grow.