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Hotels Seizing Hybrid Opportunities Dropped by Offices

The past 18 months have blurred the line between home and office as kitchen tables become boardrooms and closets become offices. Remote employees have carved out pieces of their homes to create workspaces wherever they could. Hybrid workplaces must adapt in kind, bringing a touch of home into office design. The unique opportunity for office landlords to make hybrid workspace feel warmer and welcoming is already being seized by the hotel industry, bringing a formidable new competitor into the office sector. 

Like it or not, workers want a hybrid workplace. How much depends on who you ask, but survey after survey has found workers want hybrid offices. Gensler’s Global Workplace Survey, polling 10,000 office workers in the U.S., U.K., France, and Australia, found the majority of workers in each country favor a hybrid work model. GoodHire’s survey found 68 percent of Americans would choose remote work over being in the office full-time. Workers don’t just want hybrid work, they’re demanding it: 74 percent of Americans said they need a remote working arrangement to stay at their current job. The ball is now in employers’ court to provide the type of hybrid office employees are demanding. If they don’t, hotels will. 

Hybrid workspaces need to be more than flexible, they need to feel like home. Flexible workspaces provide different rooms and spaces to work in, but they’re not exactly hybrid. Hybrid work is tied to remote work, so by definition, a hybrid workspace at the office needs to at least somewhat reflect an employee’s remote workspace at home. No place can partially replicate someone’s home, but they can work to provide the same level of comfort. Sound familiar? Hotels have been trying to make guests feel more at home for centuries. Offices have been acting more like hotels for years, but the rapid shift to remote work has designers and managers taking even more pages out of hoteliers’ guest books as the hospitality sector rushes to do the same to office providers.  

On-demand services help employees feel more connected to their daily life outside the office, something that’s hard to do when you’re stuck in traditional working models. Office ‘hoteling’ is a misnomer for the type of changes landlords are pursuing. Hoteling as it’s currently understood is a business model, booking a desk or a room in advance by the day. That understanding of hoteling is critical to hybrid work, allowing employees to book desks at their office when they know they want to come in. But hybrid office hoteling must also evolve to offer the types of services and comfort offered to make guests feel more at home. Technology and scheduling apps are critical to the logistics of hybrid work and desk hoteling but it’s only one part of a full-service hospitality business model. Too often ‘hoteling’ desks are even blander than the traditional workspaces they replaced, offering less space and fewer services. 

Office landlords refusing to make their buildings more like hotels may miss the opportunity as hotels work to make their buildings more like offices. To offset lost income from depressed travel during the pandemic, major hotel chains have launched co-working and workspace programs. Marriott, Hyatt, Hilton both began redesigning some rooms as office spaces, renting them by the day. The difference between a hoteling desk in an office and an office room in a hotel is night and day. Hotels are putting all the thoughtful design they’re known for into their burgeoning office spaces, giving guests spacious desks, ergonomic chairs, a place to nap, fast wifi, and a clean, distraction-free environment. Plus room service is available for workers around the clock. Even better, most hotels have tied their workspaces into their rewards program so workers can earn points towards vacations and leisure stays while working. 

Hybrid workspaces in hotels are a growing threat to traditional offices that landlords must learn from. Some are even striking deals with coworking providers. Flexible workspace provider Industrious expanded its co-working platform to include using converted rooms at the Wythe Hotel in New York City. In a time of dire office leasing, losing office tenants to hotels is the unthinkable reality landlords are now dealing with. Hotels-as-offices are exploding, with many hotels already considering making the new hybrid workspaces a permanent offering. 

“We’ve created spaces that are comfortable, safe and functional for workers while our hotel partners help bring that extra element of warmth and service,” Anna Squires Levine, chief commercial officer at Industrious, told Skift. “This ‘special sauce’ combination resulted in a really unique offering that has guests wanting to return to the spaces on a regular basis and is ultimately the best testament to the success of these partnerships.”

High-end offices have been packing in amenities to gain a competitive edge for years, but now hybrid work is forcing office landlords to think about amenities and comfort as a necessity rather than a luxury. Thinking about the well-being of people in the building rather than the well-being of the square footage of the building itself is a paradigm shift for many office landlords, one that’s being accelerated by the push for hybrid work. Now being at the office isn’t about the space provided to workers so much as it is what can be done while you’re in it. Employees like working remotely because of all the things they can do at home, whether that be child care, self-care, or simply a load of laundry. Being able to offer that same type of flexibility and service is key to maintaining the value of offices. 

Tishman Speyer launched Zo before the pandemic, offering tenants a comprehensive suite of amenities including child care, health services, travel planning, dry cleaning, personal grooming, catering, and rideshares. It’s becoming harder for competitive office landlords and management companies to simply provide space and cash checks, now they have to act as the building’s concierge too. 

“Zo represents a shift in the mindset of how we run our business and our portfolio,” Rob Speyer, Chief Executive Officer of Tishman Speyer, said in a press release. “Our most important job is to serve the 250,000 people who work in our buildings each and every day. Instead of defining ourselves by the square feet we own, we will define ourselves by the quarter-million people who use the square feet and how well we tend to them.”

Office landlords struggling to provide hybrid workspaces may soon find hotels moving in on their customers. The pandemic is forcing office providers to rethink the value proposition of their products. People used to require an office, many don’t anymore. Freed from necessity, offices must offer more to workers looking for hybrid space. Office landlords and management teams can offer all the same things hotels can, but at what cost. Hybrid workspaces charging hundreds per month have a price advantage over hotel workspaces charging by the day, but it’s about what you get for the money as much as it is about the total cost. Hotels are betting they can offer welcoming hybrid workspaces that workers actually want to be in—cheaper than offices can. If office landlords refuse to adapt to changing workplace demands, that bet will continue to pay off.

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