Hotels Are Deciding Whether Selling Co-Working Space Instead of Beds Is Worth It

It used to be about getting heads in beds, but more hotels are asking: what about heads on desks, and is providing co-working space a profitable business?

Fewer tourists are checking in due to global lockdowns, prompting hotels to look locally. In many cases, that’s a market of growing numbers of remote or hybrid workers hunting for somewhere to escape their homes.

The bigger chains reacted quickly last year. Marriott and Hilton rolled out their own schemes, Work Anywhere with Marriott Bonvoy and Workspaces by Hilton, while in France Accor already had Wojo in place, and Best Western launched My WO. Now independent hotels and alliances are weighing up the idea.

Join Us at Skift Global Forum in NYC September 21-23

Europe’s Logis Hotels network, for example, is piloting a co-working program for 60 of its 2,300 sites. Rather than go it alone, it’s collaborating with GoWork&Co’s Hop’n Space (Hotel Office for Professional Nomad) brand. It aims to roll it out to most of its properties by 2023.

This kind of collaboration could be the key to making it work. Not only do hotels compete with each other, they’re also competing with international household names like WeWork and IWG, currently on a mission to expand via franchising, as well as local co-working space providers.

A Best Western My Wo space in Paris. Picture: Best Western

One startup is providing new types of benchmarking data for hotels, as well as real estate companies and other building occupiers, to calculate the benefits. Coworkintel is creating a new set of metrics, such as revenue per available and occupied workstation (RevPAW and RevPOW).

It’s not too dissimilar to the industry standards like RevPAR — or revenue per available room — but other key indicators are coming into play, including social media. Considering one hotel measures success based on the number of friendships formed at its locations, it’s not so unrealistic.

“It’s the very beginning for all these hotel brands, it’s trial and error, but it’s going to be something to watch this year.” said co-founder Ben Tannenbaum.

Pick a Partner

Part of those trials will involve deciding whether the hotel should select an established co-working space partner, as Logis is doing. Then a lot will depend on the style, and geographic spread, of that partner too.

Coworkintel has been digging into the data, including desks per average number of likes for each social media post, to create a flex social engagement score. “Industrious for example, has a large social media follower base. But when you look at the number of followers they have, compared to the number of desks they have, you can see that smaller brands are performing better. They’re smaller, but they have a much more active community,” Tannenbaum said, citing Betahaus and Factory Berlin as relative leaders. Regus has a much higher score, so falls behind its competitors.

According to this index, three Betahaus desks are enough to convert into one active social media like. “Industrious is at the industry average, they’re doing well, but some brands have worked out this social media strategy a lot more,” he added.

Coworkintel analyzes “desks per like” of co-working space providers. Picture: Coworkintel

It’s another decision hotel managers will need to make: whether international brand affiliation is the goal, or high engagement with a local community.

“Partnering with a brand is a good way. If you’re a hotel, you already have the hospitality skills you need to welcome people, the ability to provide food and beverage,” said Tannenbaum. “Where you need the most help from a co-working brand is around marketing, putting the offer in front of customers.”

When it comes to pricing, hotels can offer low rates for startups, but higher tariffs for large companies because they tend to not mind paying a premium if it gives them access to the startups.

Accor has so far scaled its co-working business from 12 standalone Wojo locations to more than 300, including at its brands Ibis, Novotel, Mercure, Pullman and Sofitel, according to Coworkintel. Accor’s ambition is to become the largest co-working network in Europe with more than 1,000 locations by 2023.

Marriott, meanwhile, has 137 hotels in 16 cities as part of its Work Anywhere initiative, according to Coworkintel. There’s plenty to consider as economies recover, but the competition will only increase.

Sidenotes

Many parts of the travel industry have been drawn into the ongoing Afghanistan crisis. Airbnb is set to provide temporary housing for 20,000 refugees, while commercial airlines earlier flew evacuation flights. Now, a $1 billion global recruitment platform has launched Remote for Refugees.

Remote, which raised $150 million in July this year, is offering free global employment for all refugees who reside in countries where it has an entity. It is also partnering with other organizations, including Na’amal, to help refugees legally “work from anywhere.”

As Skift noted in June, before the crisis at Kabul’s airport struck, many companies will face the challenge of inclusivity in an era where employees can work from anywhere. The action by Remote goes some way to addressing this. All eyes now on other global mobility platform startups like Oyster and Deel. Other cogs of the travel industry, including corporate travel agencies, are also well placed to lend their own expertise, in one way or another, too.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Alaska Airlines, Hilton, JetBlue, Nature-themed retreats, Norwegian Air, Rosewood Hotel Group, South African Airways, trade missions, Travelport.

In Brief

Trainline Poaches Its Second Leader From Amadeus

Trainline Partner Solutions has hired Liz Emmott as director of global distribution and business solutions. Emmott was previously general manager and commercial director for business travel accounts (UK, Ireland and Italy) at Amadeus. Trainline’s business-to-business division wants to tap into the shift of travel by air and car to rail. She joins Champa Magesh, who before joining as president at Trainline Partner Solutions was executive vice president, retail, travel channels and managing director EMEA at Amadeus. More recruitment is expected in the UK and Europe.

Modular Maker Room Sees ‘Third Space’ Demand

Modular architecture brand Room has seen sales for its soundproof meeting rooms and phone booths double in the second quarter of this year compared to the first. The company said more people and organizations were looking at the concept of the “third workplace,” meaning a space that is neither home nor office. “Anything can be a workspace with the right tools, including airports, hotels, and even department stores,” it said.

Register Now for Skift Global Forum September 21-23