Developers and designers of offices, co-working and build-to-rent projects are responding to the changes in how we live our working lives, are conscious of a new need to be flexible and to foster community and are appreciative of the fact that one standard approach does not suit everybody.
Many workspaces are no longer fit for purpose. Workers want flexibility, not only in terms of working remotely but in the buildings where they meet and work.
There is less demand for large, open-plan offices, and there is an increased expectation for a mixture of spaces that allow people to interact with their colleagues, while having the privacy to work. There is demand for desks and booths but coupled with a softer, more relaxed environment perhaps with couches and armchairs.
Hoteliers can take advantage of these trends.
Hotels increasingly are hosting meetings and social events, not only because they are pleasant environments and beautifully designed spaces, but because they are relaxed and help to foster more open conversations.
Increasingly, experience in creating these spaces within the hospitality sector is perfectly aligned to the demand from our other real estate clients.
The hotel and travel sectors are also adapting to societal changes.
Employers are realizing that people remain productive when they are working remotely, even when taking long weekends, and hoteliers are starting to understand that their business will be more resilient if they offer other services, including somewhere for people to work away from home.
The more common this becomes, the more economic productivity will start shifting towards travel and leisure and the greater the focus will be on our sector.
This reordering of the way we live will change the way consumers, investors and developers look at assets.
Hotels used to be for leisure and offices for work, but now, with employees working remotely from home and away from home, the requirements have changed.
People are looking more closely at how they spend their time and what type of asset is the most effective for each use.
That will change how we all look at buildings. For starters, rather than being fixed-use cases, buildings will need to be more fluid.
Traditionally, property developers would repeat what they already knew, and mostly that would work, but now changes in living and working patterns mean that the conversation is more dynamic.
Now, to encourage people to stay for as long as possible in a neighborhood, developers must meet these evolving needs and talk to customers about how long they want their commute to be and whether they want galleries, fine dining, gyms, nurseries and other facilities.
If you really want to improve asset values, there are two ways of doing it: restrict supply or create that value yourself.
Residents and guests are embracing this sense of neighborhood.
We have always lived in community settings and with a more transient lifestyle, moving to new places and experiencing different cultures can feel alienating. As a consequence, we are seeking out communities at work or through leisure activities.
The next logical step in this evolution is to combine these offerings under one roof.
This idea is not limited to workplaces. Build-to-rent developers are embracing the idea that their residents work from home more frequently and therefore are designing communal areas in their buildings to accommodate this requirement for flexibility.
Creating a more welcoming, active residential environment has a community benefit, but it also offers a commercial gain for managed residential buildings — a rooftop bar to enjoy on an evening drink, a basement pool or even a running track on a roof terrace. All contribute to a more aspirational and financially viable option.
Developers have learned many of these lessons from hotels, but hotels are also learning from other asset classes.
Many developers have moved from building large, underutilized lobbies to building online check-in; having a concierge rather than a reception desk; and opening co-working and café spaces that generate income all day. The mentality has moved away from delivering only bedrooms to making income from every square foot.
Now, when developers and designers look at mixed-use developments, they are likely to combine co-working, co-living, retirement living and hotels, all sharing communal areas. There is reciprocity throughout.
The past few years have taught hoteliers that they have to address total revenue, not just the revenue from guestrooms.
They also know they need to evaluate how to maximize that revenue, both around the clock and across different demand seasons.
Only by taking this rigorous approach to the property can hoteliers hope to move hotels further into the mainstream as an asset class.
While hoteliers are changing their attitudes to space and time, the wider real estate sector is heading toward vertical integration, toward having a portfolio that offers something for every aspect of how we spend our time. And the core of that is hospitality.
Richard Valtr is founder of hospitality management systems firm Mews. Paul Wells is a partner at hotel design firm Studio Moren.
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