- With tourism way down during the COVID-19 pandemic, hotels have begun renting out rooms to local business people during the day.
- Stringent cleaning protocols have motivated guests to feel confident renting hotel rooms for their work.
- HotelsByDay says it has seen a 900% increase in demands for day-use hotel space over the past two months.
- Some hotels offer complimentary refreshments as part of the deal; others have repurposed large ballrooms and meeting rooms to create even more workstations.
- The high demand appears to be global, with hotels everywhere from Los Angeles to Lake Como, Italy jumping in on the trend.
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While the hotel industry is down about 80% on average from a year ago, bookings for the extended-stay market had a surprising growth spurt at the end of May and in early June.
A key reason: From big chains to independently-owned hotels, many have resorted to creative ways to bump their revenue streams – by renting out rooms to business workers during the day.
Hotels are renting out rooms to local business people during the day, instead of tourists
As the lockdown intensified and offices remained closed, many remote workers discovered that it would be easier to work if they had a dedicated office space, and the hotel industry stepped up to meet this demand.
“Many travellers – even travelling from next door – are finding these (hotel rooms as workspaces) to be a great experience,” said Dr. Bjorn Hanson, who has taught at the New York University School of Professional Studies at the Jonathan M. Tisch Centre for Hospitality and Tourism.
The hotel room itself is conducive to someone who needs a day away from work. There’s typically quality customer service, high-speed internet access, a reading chair, a television, and even fitness centres if they’re open. “There’s a bed which is good for stretching out and laying out papers, and taking a break and watching the news. So, it does make for a great space for office day use,” said Hanson.
Stringent cleaning protocols is also another factor that has motivated guests to feel confident renting hotel rooms for their work. Marriott announced the formation of a “Global Cleanliness Council” in early May with enhanced technologies like electrostatic sprayers to clean public areas and the highest classification of disinfectants. Hilton said it would start working with RB, the manufacturers of Dettol and Lysol, and consult with the Mayo Clinic to develop safer and elevated cleaning protocols.
“There’s a confidence – not just with branded hotels – but knowing that it’s a clean, uncontaminated space,” said Hanson.
HotelsByDay, a company that allows both business and leisure travellers to rent rooms by the day and has 1,250 hotels on its platform, says it has seen a 900% increase in demands for day-use hotels over the past two months. CEO Yannis Moati said that many brands started turning conference rooms into working desks because “hotels need to reinvent the way they see themselves.” He also added that 60% of his customers have booked a day room within 30 miles of where they live.
LiquidSpace, an online platform that offers flexible office spaces in many popular US cities from Los Angeles to Boston, has also seen a small uptick in requests. “With the downturn in overnight guests, hotels have started repositioning their overnight rooms for office spaces,” said Eric Zellhart, vice president of product and growth.
Since local is what travellers want right now, Zellhart said hotels should market to their own neighbourhood to attract the business worker who wants some peace and quiet.
Extended-stay hotels and hotels with kitchens have been a natural fit for remote business workers
Larry Korman, president of Stay AKA, whose 12 properties (11 in the United States, and one in London) have suites fully equipped with kitchens, said he’s also seen business workers sign monthly and even annual leases specifically to use the rooms as their office spaces.
“Some companies are using the spaces as pied-a-terres, but some are renting out our one-bedroom residences and keeping the bedrooms to stay overnight, and using the living spaces with a desk to work.”
Some of AKA’s metropolitan properties, such as those in Washington D.C., have had 100% occupancy rates in recent weeks, according to Korman.
Hotels are also renting out workspaces by the month, instead of just by the day
Greg Velasquez, director of sales and marketing at The London, West Hollywood in Beverly Hills, California, said that his luxury property (popular with executives in the entertainment industry) started offering an “Offices at The London” package on June 1st. It comes with a room that is at least 725 square feet for $US5,000 per month for business workers’ use from 6 to 10 a.m. daily. “We tried to make it competitive with what corporate offices would charge, and coffee and Wi-Fi are included,” he noted.
While leisure travel accounts for 95% of the hotel’s business, the demand for these rooms has just started (out of the property’s 226 rooms, 20 have been converted into office spaces). “Corporate is not back yet – we’ve just started to see people inquire about it – but this is a way for businesses to ease back into operations,” he added.
Will Lucas, the chief executive officer of Mint House, a technology-enabled hotel company that operates out of luxury apartments in 10 cities across the US, says that while demand has zig-zagged from mass cancellations and no new bookings in March, the company had over 80% occupancy rates in most properties in May and June. “Almost 50% of our post-stay surveys in June indicate that our guests are travelling for work – we specifically ask that question,” he said.
Some hotels offer complimentary refreshments as part of the workday package
Mark Driscoll, managing director of the 318-room The Hamilton Hotel in Washington D.C. says that the hotel debuted a “Home-Away-From-Home Office” package for $US109 a day that includes a day-use room until 4 p.m., a breakfast bag with goodies (typically a croissant or a parfait), and a room with a workspace, and Keurig coffee maker. Driscoll said they have set aside about 30 of these rooms for business workers.
If you just want a workspace for the day instead of a room,The Asbury, a 110-room hotel in Asbury Park, New Jersey, recently debuted a “WFH: Work from Hotel” program for just $US35 a day for non-guests that gives access to indoor and outdoor workstations.
Other hotels have repurposed large ballrooms and meeting rooms to create even more workspaces
Hotel Figueroa in downtown Los Angeles started a “Work Perks at the Fig” program and transformed its ballroom into a workspace for corporations to use once a week. Connie Wang, managing director of the hotel, said that she started seeing a spike in reservations for the beginning in May, from business people eager to regain a healthy separation of work and home life. “Some guests are coming just from a few blocks away,” she noted.
The hotel offers two work perks packages: one for individuals at $US129 for day use, and a $US5,000 monthly subscription for the use of its boardroom once a week, which also includes two guest suites for the day.
The 244-room Ballantyne hotel in Charlotte, North Carolina, converted its board rooms to workspaces with a rental fee and a menu with food items so workers can have lunch when they want. The cost to rent these spaces is $US500 for the week, with extra charges for bottled water, soda, or coffee.
This trend also appears to be a global one
The Grand Hotel Tremezzo, which has beautiful views of Lake Como in Italy, recently created a “Work from the Grand” package offering a room for three nights, a private office on the same floor (complete with with pens and Moleskin notebooks), and a lake view breakfast is included. Skye Suites, the hotel brand of Crown Group Australia in Sydney, said more guests are checking in just to use rooms during the day because they need a clean and comfortable space to work.
“The main reason they say is that they can’t work from home is because their children are too noisy,” said Iwan Sunito, the chief executive officer of Crown Group.
Hanson said that this trend will continue until employers begin to reopen offices. “The brands benefit from royalty and management fees, but the owners will benefit even more,” he added.
Charu Suri is a journalist who contributes to several publications including The New York Times, Architectural Digest, and The Washington Post. She is also a jazz pianist and composer. Follow her on Twitter at @charusurimusic.
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