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As hotel groups realize the revenue-generating potential of the remote workforce, co-working is creeping into hospitality, but getting it right means not only physical changes but a complete mind-set shift for operators and guests.
GLOBAL REPORT—After a decade of watching from the sidelines, the hotel industry has started showing concrete interest in co-working, for which demand grew by 19% last year in global cities. While different groups are approaching co-working in different ways—an acquisition by Accor; in-house lobby re-designs at Marriott International—the demand drivers and potential revenue generation are the same, according to sources. Travelers want to use hotel spaces differently than they did five or 10 years ago, and locals, especially those working remotely, want productive yet “buzzy” places to set up their laptops, sources said. According to one report, remote working grew 44% over the last five years, and by 2028, 73% of firms are predicted to have remote workers. Frédéric Fontaine, SVP of the Marketing Innovation Lab at Accor, said to get co-working right requires a mind-set shift for both guests and hoteliers. “It’s about removing the psychological barrier for the guest and building the understanding that you can go into a hotel if you haven’t got a bedroom,” he said. “It sounds extremely silly and simple, but the reality is that it’s easier to go into a coffee shop than a hotel to work,” Fontaine added. Last year, Marriott International announced a complete overhaul of the Sheraton brand, with a major part of that being the introduction of co-working. “The customer today is blending and integrating multiple activities. There’s no longer really a lunch hour. It’s as much a social hour and a work hour,” said Indy Adenaw, VP and global brand leader at Sheraton Hotels & Resorts. “We wanted to create one centralized space that could offer our customers the ability to gather, socialize and work. Rather than define the spaces by our operational needs, we decided to define the spaces by how customers use them,” he added. That thinking has resulted in communal tables with built-in charging capabilities, personal lighting controls and lockable drawers for valuables and elevated studios and booths that guests can pop into for a video call and double up as meeting, lounge and dining spaces. Attracting corporates Accor has bet bigger than any other hotel group on co-working’s potential. In 2017, the company acquired a 50% stake in French co-working operator Nextdoor, which has since been renamed WOJO. Last year, they opened more than 250 workspaces in Accor hotels across France and across the hotel firm’s segments. “They’re easy to implement, there’s no particular investment for owners, and they generate additional traffic and incremental revenue on an existing activity, mainly F&B,” said Lénaic Bezin, head of third places development at WOJO. Accor also has also opened four WOJO Corners, dedicated co-working spaces with Skype booths, printing facilities, meeting rooms and free-flow coffee and tea, all of which members can access by paying a daily or monthly membership fee. For Bezin, this aligns with the group’s “augmented hospitality” strategy. “We’re moving away from a pure focus on the bedroom to a focus on the hotel in general and the way it connects to the city and outside guests,” he said. Corporate firms also are making sure they already have sufficient space for their remote workers, Fontaine said. “Some of those corporates are ready to pay more than we could expect to ensure access to our spots for their employees,” he said. “They trust us, and we can offer scale that a smaller co-working operator can’t.” In 2020, Accor and WOJO plan to open their first co-working spaces in Spain, starting in Barcelona. Asia is another market the firms are looking into. Pushing F&B, design Adenaw said this changing guest behavior is global. “We have all these hotels that are going to be similar from here to China,” he said, although “some markets are mature enough that people want to pay for the use of a studio, but in others it would be a pretty significant barrier to entry.” “What we’ve tried to do from a business perspective is to open the doors on F&B and really push and activate it,” he added. F&B can be ordered at any time using digital tablets, and in new lobbies there will be a coffee shop/bar in the studios and on the communal tables. Two other Marriott brands, Moxy and AC Hotels, mostly will be new builds and this can be designed with these new guest expectations in mind. “We know travellers want to be where locals are and locals want to be in a very engaging space in their neighborhoods,” said Toni Stoeckl, global brand leader for lifestyle brands at Marriott International. Both brands’ public spaces are made up of what Stoeckl calls “different zones of intensity.” For example, in one Moxy lobby co-working might be centred around a foosball table, while another feels more like a library. At AC properties, lobbies have semi-private areas used for co-working. Design also takes into account that many remote workers likely will stay at the hotel in the evening to socialize. “The furniture is flexibly designed so it transitions super-easily from being used as a meeting room during the day to a lounge space in the evening,” Stoeckl said. “Public space has to be really buzzy and vibrant, and that in and of itself will drive revenue,” he said. For locals, he said such design provides a different option to a standalone co-working space, especially if they do not work remotely every day. “Hotels naturally lend themselves to this idea of ‘popping in.’ You don’t have to have a membership. You might be working from home one day because you don’t have to go to the office, and your local Moxy provides another change of scenery for you,” he said. Hoteliers are capitalizing on people seeking out co-working spaces, not just for the physical components but also for a sense of community. “It has to be a little bit programmed. That’s why we look for crew members for Moxy who are innately playful and energetic. We also work with an improv comedy group, Upright Citizens Brigade in New York, to create service training,” Fontaine said.