Hotels rent rooms as workspaces to recoup COVID losses

Hotels are increasingly renting rooms as workspaces for remote workers to recover lost revenue and reservations during the COVID-19 pandemic.

Yannis Mwati, CEO of hotel reservation service By Day, said on Wednesday that an increase in workplace orders boosted his sales by 50% from pre-pandemic levels, even as the larger hospitality industry continues to adjust to record losses.

“Before the pandemic, we were largely recreational,” said Mr. Moati, whose agency helps people rent day rooms from every major hotel chain. “Now we have a lot of work-related services just because people have moved from urban to suburban areas during the pandemic and they need an office.”

STR, the hotel industry’s leading market researcher, reported Friday that 62.9% of the country’s 9.3 million rooms in 70,000 hotels were occupied last month – slightly up from the 61.8% occupancy rate in September, but still 8.8% lower than pre-pandemic occupancy. Adjusted in October 2019.

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

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

Jan L. Jones, who teaches hospitality and tourism management at the Bomba School of Business at the University of New Haven in Connecticut, said the increased use of guest rooms as workspaces reflects the hotel industry’s efforts to “come up with new strategies” in response to competition from cheap vacation rentals and the fact that working online Yet it may continue after the epidemic has subsided.

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

She added that the trend had already started before the pandemic, as Airbnb’s offer of cheaper stand-alone accommodations forced hotels to rethink the way they do business.

“Airbnb became very popular early in the pandemic because it was cheaper, and it allowed families to travel without being around strangers at the hotel,” Ms Jones said.

Mr. Moati of Bay Day Hotels said the share of “day hotel spaces” it had rented for commercial purposes rose from 9% before the pandemic to a peak of 35% in April. About 30% of booking service sales now steadily come from workplace rentals.

Founded in 2015, By Day Hotels allows customers to book guest rooms in seven-hour day blocks at 50% off the nightly rate from 2,000 hotels owned by Marriott, Wyndham, Hilton and other chains. Hotels usually allow people to rent rooms for four to nine hours between ten in the morning and eight in the evening.

However, hotel sales by day fell 82% during the first few weeks of April 2020 as COVID-19 lockdowns spread across the United States.

“It was refreshing because we had workers rent rooms for the day to escape the confines of the house, instead of using the traditional pool and spa,” said Mr. Moati.

The American Hotel and Lodging Association (AHLA) forecast in August that the industry will end 2021 with a decline of more than $59 billion in business travel revenue from 2019, after losing nearly $49 billion in business travel revenue in 2020.

The industry trade group reported that US hotels generated $89.5 billion in revenue in 2019 and will top $30.3 billion this year, down 66.2% from pre-pandemic levels.

That could mean worse financial fallout this year compared to 2020, which is the worst year ever for the industry in terms of occupancy and one that the AHLA said is nine times worse than 9/11 for travel.

The corporate offices 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 offers hotel bookings by day, said most of its 4,037 locations have continued to thrive as mid- and high-end brands reaching consumers looking for a room somewhere between budget and luxury rates. .

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

“Overall, it is our broad group that has helped us with this phased recovery,” Ms Cole said in an email.

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

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