When Brian Chesky, CEO and founder of Airbnb said that “people are no longer just travelling in Airbnbs – they are living in them”, he was speaking from experience. Airbnb’s ‘work from anywhere’ policy for its own staff has seen increasing numbers embrace ‘nomadic’ opportunities to spend time staying in foreign cities and dialling in to head office via video call.
While the firm asks employees to spend at least three months in their location of choice ‘to build community’; use VPNs for security reasons; and get clearance from HR for their destination requests, employees to date have received approval for stays in some 170 countries around the world for up to 90 days a year. The result is a highly dispersed workforce exploiting the firm’s network of holiday homes, underlining the point that working from home – or from wherever you like – has made digital nomads an increasingly important subset of hospitality clients.
Digital nomads
In the wake of the pandemic, countries like Croatia saw an opportunity to create a digital nomad visa to generate further tourism inflows. Launched in 2021, the Croatian permit allows non-EU passport holders to stay for up to a year while working remotely for a business outside of the country. The benefits for overseas visitors include not having to pay taxes locally and exploiting the country’s relatively low cost base and growing network of co-working spaces. For Croatian landlords and the remote workers, programmes like this feel like a win-win, filling rooms, boosting the local economy and generating travel and cultural opportunities for the nomads, who no longer have to take a sabbatical or quit their jobs to travel for an extended period.
Yet despite this post-pandemic trend and its growing intersection with bleisure travel, hotels that primarily catered for business clients pre-Covid are on the whole recovering at a more sluggish pace than their leisure-focused counterparts, says Ana Ivanovic, JLL’s executive vice president, head of Spain hotels transactions. “We can see that revpar in cities like Paris and Rome is already surpassing 2019 levels by around 20%, while in business destinations such as Berlin and Brussels it’s still at 90% of 2019,” she notes. “Leisure-focused hotels have definitely been one of the main winners of the crisis. Their success was initially attributed to revenge travel, although we are now around 18 months out of the pandemic and volumes are still robust.” She suggests the prognosis is less certain for business-focused hospitality. “A certain proportion of business travel will most likely not come back to pre-pandemic levels, with many short trips and one-off appointments replaced by video conferencing.”
Co-working opportunities
For business properties, however, she does see opportunities for hotel owners to plug into trends connected to the new ways of working. “A good example is a hotel that was located in the business area of Barcelona. The demand for business travel was still lagging in 2021 and Q1 of 2022. The management decided to combine the ground floor meeting rooms with F&B and offer it as a free co-working space,” she notes. “Users were obliged to consume something, have lunch or dinner there, but it proved a successful way to generate footfall. Now, F&B is not as profitable as meeting room hire or overnight stays, but it shows that you can generate revenues if you remain agile.”
Other groups such as The Social Hub – previously The Student Hotel – have built co-working into their business plans from day one, making local communities their target as much as out-of-town travellers.
While MICE (meetings, incentives, conferences and exhibitions) focused-hotels took a significant hit during the pandemic, Ivanovic identifies interesting new trends in this space, too. “In 2020, everyone was saying that conference hotels would struggle in the future as we would never again feel comfortable being around large numbers of people. But that’s not what the data shows,” she says. “Now, MICE events may not be back to 2019 levels but there are very positive signs. In Madrid, for example, the number of events in 2022 reached around 89% of 2019 levels, even though Q1 was heavily impacted by the last omicron wave. The first events to come back were small to medium sized gatherings, but larger conferences are now returning at pace.”
A Malaga hotel confirms that requests for small meeting rooms is spiking, due to firms slating in-house events to nurture company culture and create employee get-togethers, she adds. The City of Valencia meanwhile reports that congress activity at its conference centre will attract a healthy 90,000 overnight stays in 2023, and that the centre has increased its business by a total of 35% since 2016. “The other key trend is hybrid events. MICE properties now need to be able to host conferences which have some in-person guests and some virtual ones, so the tech is increasingly important,” she says. The International Congress and Convention Association (ICCA) now has a hybrid category in recognition of this, she notes. “My overall view is that the future of MICE centres is brighter than the future of traditional business hotels.”
Like the digital nomad trend, the return of MICE events is also benefitting warmer climes such as Southern European towns, or picturesque destinations with a strong leisure appeal. “If you’re in a city that is equally attractive for leisure travellers, it is much easier to win over digital nomads and conference guests. We are also seeing innovative service providers create packages that offer international co-working or co-living facilities for corporate teams in a range of locations. New opportunities are out there, but business hotels need to adapt to them.”
Corporate packages
Accor Group saw an opportunity to surf evolving trends in 2019, teaming up with Bouygues Immobilier to launch Wojo, a co-working brand initially located in hotels, and coming soon to train stations, duty free airport outlets, shopping centres and more. To date more than 5,000 Accor properties have joined the Wojo network with more in the works. Meanwnhile, the group’s Accor Live Limitless (ALL) loyalty programme and branding exercise for its “live, work and play” customers who blend the boundaries between leisure and business travel has evolved into a partner for key international events, such as the upcoming Rugby World Cup in France in 2023 and the Olympics in 2024. Accor is the official accommodation partner for both events through its room bank ResaEvents, mopping up both leisure and corporate packages as well as taking care of media and athlete accommodation.
Accor CEO Sébastien Bazin, meanwhile, is phlegmatic about the future of work after some initial doubts. “Before the pandemic, I was fully against any form of remote working as I probably felt like team members were playing tennis rather than working,” he quips. “Since the pandemic happened, corporate headquarters is empty on Mondays and Fridays… but it actually works super fine. [Employees] are accessible, they are on time, they work efficiently, but they do get to spend the weekend, their leisure time with the people they love. And that’s happening all over the world.”
He also sees ongoing opportunities for the group’s hotels to increase turnover, adding: “Make your hotel a trendy place for a guy to work from, and he will spend all day there. Room revenue might even be as little as 40% of income if you can drive the hotel to become a destination.”