One of the transformative effects of the COVID-19 pandemic has been the transition for many business sectors to long-term remote or work from home (WFH) situations. The longer that the pandemic continues, there is talk of WFH fatigue and the desire for employees to get back to the office. However, many studies suggest that WFH in some form, be it part-time or full-time, will be a reality in the post-COVID world. Hotels need to adapt to benefit from this trend as there can be many financial payoffs.
One thing we’ve been reading about is hotels renting out guestrooms as day offices. Be it parents needing a quiet respite from kids stuck at home for school or workers who simply enjoy getting out of the house but whose office is closed because of the pandemic, hotels can fill their guestrooms at day rates that can help offset the costs of low occupancy. Some hotels have worked out weekly or monthly rates and negotiate with clients on cleaning to minimize the labor and other associated costs. If you have a food & beverage outlet that can operate through the pandemic, these workers are also likely to take advantage of your lunch and other snack offerings. It’s unclear if this trend is here to stay but pursuing this opportunity can be a high margin area of business.
Longer-term, there is discussion of companies scaling back or even eliminating office space as this can be a significant area of savings to their bottom line. However, if most workers are only in the office a few days per week or not in the office at all, companies still have the challenge of building company culture and bringing employees together periodically. Working through COVID has taught us that while there are many benefits to remote work, we miss the camaraderie and in-person meetings that cannot be accomplished through WFH. This is where hotels can play a new role and seek new sources of revenue.
Hotel meeting space can fill the gap and create a win-win situation for companies and your hotel. Instead of spending money on office space and all of the ancillary expenses, companies can have weekly, biweekly, or monthly meetings at hotels. Be it sales meetings, staff meetings, client meetings, or even company happy hours, the cost of renting meeting space is a lot lower than the cost of an office. And building rapport with these clients will lead to increased food & beverage sales and room blocks.
There are many ways that operating in the post-COVID world will impact our lives moving forward. And if we lay the foundations now, we can create new demand and high profit margin sources of revenue that will increase EBITDA, and by extension asset value, over the long run.