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Hospitality startup Ethos thinks it has a solution for the growing number of empty offices. Put employees back inside them.
The company had hoped to officially launch in the spring, with a pre-Covid plan to convert empty commercial and retail spaces into hotels and co-working membership clubs. “I dreamed about activating vacant building spaces by turning them into ‘sanctuaries’ for self-employed creators and entrepreneurs,” CEO Janko Milunovic wrote in a blog post in January.
Ethos claims these sorts of co-working spaces can be built out five times faster than traditional hotels, by using prefabricated walls it designs off-site. But it hadn’t expected coronavirus to wipe out travel and create lockdowns in the way it did, so the pandemic has put this particular dream on pause.
Here’s the change in tack, as it has now launched Ethos Remote Habitat. Ethos is teaming up with lodges and boutique hotels in remote locations to offer displaced workers “campus” style breaks to reconnect with colleagues. After trialing the concept in Harmony, Maine in the U.S., it ran a program in Tulum, Mexico, last month for 30 people who stayed between two weeks and one month.
Beach Meets Wi-Fi
It’s not the only hospitality company thinking along these lines, with Mexico’s Velas Resorts now promoting escapes to companies looking to “energize staff, boost creativity and productivity, and change routines while providing the ultimate social distancing.” Its new Group Takeover Program gives companies exclusive use of the hotel — it’s even come up with a new name: corpcation.
These latest developments aren’t the first work/life concepts to emerge. United Airlines is bundling flights with Meeting Space for remote workers in a subscription model, while co-working provider Industrious has partnered with Proper Hospitality.
Where Ethos differs is that it’s also giving individuals the chance to take part, hoping to appeal to remote workers dealing with feelings of isolation and disconnection. There’s certainly something in it for the hotels too, who’d welcome any type of occupancy.
However, there’s a hint of elitism. Not everyone’s invited and according to its website, Ethos vets people who are “aligned by three main pillars: mission in life, personal values and mind-set … we invite friends and personal connections and have limited nominations from attendees, Ethos community and founding members.”
This club mentality may put people off in a market that will only become more competitive. Some destinations are already actively pursuing digital nomads at a time when leisure travel is decimated.
Pricing may also deter corporates. While Ethos Remote Habitat’s hotels come with a supervisor, meals and activities, and can last from one to three months, companies will be paying from $1,450 per week, per employee, for the privilege. And that’s not including travel.
Milunovic is undeterred, arguing as the CitizenM and Facebook partnership has showed, there are not enough hotels in places like Silicon Valley, for example. “As many know, San Francisco is one of the most expensive hotel markets in the world. We actually started Ethos to create hotel and membership spaces in major cities within empty commercial buildings to cater to this exact problem,” he told Skift.
“We saw businesses such as WeWork flying in hundreds of people every week for two to three day stays. If you can imagine, around 200 people a week for $300/night creates almost a $50,000 to $60,000 dollar weekly spend, solely on flying in employees for meetings. The idea of partnering with a hotel, providing them with guaranteed revenues, and getting a lower rate for employees is an ideal solution for these larger companies.”
The Right Mix?
But are Ethos and others offering luxury retreats? Offsite meetings? Campus-style breaks? The pandemic is blurring the lines, but perhaps a little too much for companies to carve out a niche right now. Perhaps it’s only when companies regroup and adjust to their new modes of working that startups like Ethos will best know how to make a mark and fulfill a genuine need.
That time will certainly come. As Darren Murph, head of remote at GitLab, said during Skift Global Forum: “Business travel should get a lot more dynamic. You’re going to have teams of 10, 15 or 20 people who suddenly need an offsite every quarter or so, to build strategy, to bond, or build relationships.”
Ethos is now focusing on the U.S. east coast, west coast and midwest regions for more locations, with plans to expand internationally in the next few years.
“Offices won’t stop existing,” Milunovic added. “There is a need for teams to continue to meet in person. Of course, you can build a large corporation using remote teams but not every employee is a natural remote worker, and therefore not every business can have a fully remote workforce. There is and will always be a need to bring people together to connect, revitalize, leave cities, do creative work, collaborate and brainstorm. That is where we fit in.”