Hotel Industry Opinion: Hotels are for sleeping, eating and working

Last week I tried to book a 10-person, two-hour private meeting off-site for my team. My criteria: It had to be near our office in suburban Cleveland. It had to have a fun, creatively charged vibe to it. And it had to not be a restaurant.

I had zero luck. The closest I got were Cleveland’s two hip co-working spaces, but they ended up being either booked or geographically undesirable. Hotels? Forget it. No information online, and I didn’t have the time to leave messages for salespeople and wait for a callback just to book a small, short meeting.

I’ve been thinking a lot lately about co-working trends, and this failed meeting planning attempt just added fuel to that line of thinking in my mind. I’ve written about it before, too, but not much has changed.

In my last blog, I wrote about hotels diversifying into non-traditional spaces. I got a lot of feedback, and a lot of you are interested in talking about this, whether it’s real ways you’re doing it, or fun speculations on how the hotel industry will change in the future.

So let’s do more.

Today, let’s explore some non-traditional ways guests get work done in hotels. Because really, people sleep, eat and work in hotels.

Obviously hotels profit from people sleeping in their buildings. And they profit from people eating in their buildings. And they profit from big groups of people meeting in their buildings.

But in general, hotels do pretty bad job in my opinion of profiting from people working in their buildings.

What the industry has done is equate “work” with either “sleep” or “have a giant conference.” Meaning, they’ve made working a free amenity in the guestroom and lobby (which, yes, you have to do that!), or they’ve assumed that they take care of people working by providing and managing traditional conference space.

Hoteliers and hotel brands do a good job of those two things, and that’s, of course, where the money is made.

But, oh, if only hotels would embrace the growing movement of flexible work and meetings culture. If only, if only, if only.

We know the workforce is changing globally. The gig economy is more commonplace and not just in big cities. It’s why co-working businesses are popping up all over. Right now it’s a larger trend in Europe than it is in the U.S., according to Coworking Resources data, but it’s growing at a fast clip everywhere.

And look: Even little ol’ me in little ol’ Cleveland is looking for something different when it comes to a small, off-site meeting.

When I talk to investors (including institutional investors and family office investors) outside of the
U.S., they all mention co-working companies when I ask about what types of deals they’re getting excited about. In the U.S., some investors and hotel brand executives talk about the innovation and influence of companies like WeWork and Selina, but not too many.

It’s just not on the collective radar yet, and I think it should be.

Accor, of course, is already there. The French company acquired Nextdoor in 2017 and rebranded it as Wojo earlier this year, as it stated its plan to roll out more than 1,000 Wojo coworking spaces in Accor hotels over the next few years.

Accor CEO Sébastien Bazin will tell you that co-working investments are a good fit for hotels because hotels already are equipped—they’re buildings that already are open and staffed around the clock, they know the meetings business, they know the food-and-beverage business.

So why not make it profitable?

Hotels already are making public spaces and traditional event spaces really tricked-out and cool, with high design, great technology, accessibility and even F&B. That’s what co-working enthusiasts look for, too.

These two business models—hotel stays and co-working—can overlap. But there are obstacles. The biggest is scheduling: Co-working spaces typically offer any combination of hot desks, semi-permanent desks and suites and reserve-able venues like conference rooms and even rooftops.

That doesn’t quite jibe with the traditional hotel room-sales or group-sales model. If you’re a hotel managing co-working reservations, what do you do when a group tries to book all your desks as part of their conference space? And it’s not exactly good revenue management to have a dedicated co-working area that hotel meetings groups can’t book, or vice versa.

And what about your hotel business guest who just wants to work that day in your cool lobby. Are you going to make him pay for a hot desk for the day in your co-working space? That won’t go over well. And how will you differentiate hotel guests and co-working clients?

The other big obstacle is booking. Co-working spaces are reserved online and on demand, in many cases. Nobody’s leaving messages with sales managers or filling out RFPs for these spaces. Hotels are good at online and on demand when it comes to guestrooms, but not exactly when it comes to meeting spaces.

And really, if your sales team is incentivized to sell big groups, who’s going to want to spend time selling a single meeting room to me for a measly $300?

There’s a way, though. And there’s got to be a way hotels can figure it out for themselves, before the growing wave of emerging third-party providers takes over and OTA the heck out of this.

I think hotels that can find a solution absolutely can find a new revenue stream. Otherwise, other companies will find the solution for you, and you’ll pay a commission.