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Hotels rent rooms as workspaces to recoup COVID-related losses

Hotels have increasingly rented rooms as workspaces to telecommuters to recoup income and reservations lost during the COVID-19 pandemic.

Yannis Moati, CEO of the Hotels by Day reservation department, said on Wednesday that an increase in workspace requests had increased sales by 50% from pre-pandemic levels, even as the hospitality industry as a whole continues to face record losses.

“Before the pandemic, we were really a recreation department,” said Moati, whose agency helps people rent day rooms at all of the major hotel chains. “Now we have a lot more work-related services just because people moved from urban to suburban during the pandemic and need an office.”

STR, the hospitality industry’s leading market researcher, reported on Friday that 62.9% of the country’s 9.3 million rooms in 70,000 hotels were occupied last month – a slight increase from the occupancy rate 61.8% in September, but still 8.8% less than before the pandemic. rate in October 2019.

The STR report says the average daily hotel rate in October was $ 134.78 – a 1.2% increase from the pre-pandemic rate – and revenue per available room fell 7.6% to $ 84.75 over the same period.

“Hoteliers will continue to face many challenges in the recovery – trends in COVID cases, labor shortages, supply chain delays and the slow return of group and business travel,” said Alison Hoyt, Senior Director of the STR Board.

Jan L. Jones, who teaches hospitality and tourism management at Pompea College of Business at the University of New Haven in Connecticut, said the increased use of rooms as workspaces reflects the efforts of the ‘hotel industry “to come up with new strategies” in response. competition from cheaper vacation rentals and the reality that remote work may continue after the pandemic is over.

“I think we’re going to see a lot of different changes coming forward in the work week and where people work,” Ms. Jones said.

The trend had already started before the pandemic, she added, with Airbnb’s offering of cheaper self-catering accommodation forcing hotels to rethink the way they do business.

“Airbnb became very popular at the start of the pandemic because it’s cheaper and allowed families to travel without being surrounded by strangers in a hotel,” Ms. Jones said.

Mr Moati of Hotels by Day said the share of “intraday hotel spaces” that it rented for commercial purposes rose from 9% before the pandemic to a peak of 35% in April. Around 30% of the sales of the reservation service now systematically come from the rental of workplaces.

Founded in 2015, Hotels by Day allows guests to book rooms in seven-hour blocks during the day at 50% of the nightly rate at 2,000 hotels owned by Marriott, Wyndham, Hilton and other chains. Hotels generally allow people to rent rooms from four to nine hours between 10 a.m. and 8 p.m.

Nonetheless, Sales by Hotels by Day fell 82% in the first weeks of April 2020 as COVID-19 lockdowns spread across the United States.

“It bounced back because we had workers renting rooms by the day to escape the confines of the house, rather than for traditional pool and spa use,” Moati said.

The American Hotel and Lodging Association (AHLA) predicted in August that the industry would end 2021 down more than $ 59 billion in business travel revenue from 2019, after losing nearly $ 49 billion in business travel income in 2020.

The industry trade group said U.S. hotels made $ 89.5 billion in revenue in 2019 and will only make $ 30.3 billion this year, down 66.2 percent from levels before the pandemic.

That would mean worse financial fallout this year than 2020, the industry’s worst year ever for the occupation and the AHLA said it was nine times worse than 9/11 for travel.

The headquarters of Wyndham and Marriott, the country’s two largest hotel chains, declined to comment.

InterContinental Hotels Group, the country’s fourth largest hotel chain that also allows reservations through Hotels by Day, said most of its 4,037 properties have continued to thrive as mid-range and upper-mid-range brands that reach consumers looking for a room somewhere between budget and luxury prices.

Karen Cole, director of corporate communications for IHG’s Americas region, said the third quarter saw occupancy rates of 70% in the chain’s Holiday Inn Express properties and 80% in its Extended brands. Stay, both of which have passed 2019.

“Overall, it is our large portfolio that has helped us in this gradual recovery,” Ms. Cole said in an email.

For more information, visit the Washington Times COVID-19 resource page.

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