Page 42 - February 2021

RLI LEISURE INSIGHT

Adapt To Succeed

For post-pandemic success, hoteliers
must adapt to new realities of remote
work and longer stays argue Ernest Lee,
Managing Director of Americas and
Lennert de Jong, Chief Commercial
Officer of citizenM hotels in our first
leisure insight of the New Year.

In less than a year, the global pandemic has fundamentally altered the an emeRging hotel tRend – space as a seRvice
hospitality landscape and placed long-held beliefs and models at risk. Looking These new dynamics offer a powerful opportunity for hotel organisations
at the data, it’s easy to see why many industry leaders feel a sense of concern: that are agile enough to shift their commercial strategies away from a
Second-quarter hotel occupancy in the US, for instance, fell to lowest levels transaction-oriented daily or short-stay business model and towards one
since the Great Depression. Or, read the interviews with senior executives that is customer-centric – focusing on lifetime value through longer-term
discussing remote work and they’ve been able to close deals over Zoom. It’s and subscription-based offerings.
clear that hotel owners and operators now face a complex set of decisions For companies with remote workers who travel regularly; distributed
around the economics of operating, expanding, and protecting the bottom teams who need to gather consistently; and locals who need a better
line. In this context, what does a successful recovery entail? alternative to working from home, the benefits of a hotel-run, one-stop
Innovative, fast-moving and forward-thinking hospitality leaders will find subscription service are clear. This model eliminates the need to pay for
success in this period because they recognise that the pandemic has accelerated expensive co-working memberships or office spaces, cuts time spent
changes in lifestyle and real estate – and because they also understand how to searching for hotel/meeting room/workspace deals, and ensures that
adapt. As the world faces a sea change in how work gets done, key strategies employees can access professional spaces in big cities for client meetings,
include implementing new commercial models that address these emerging workshops or entertaining. For end users, subscription models offer clear
realities of remote and hybrid working dynamics, and ensuring that existing benefits over the transaction-oriented approach, including cost predictability,
portfolios and development pipelines align with this demand. consistency, value centricity, and convenience. From the perspective of
the hospitality brand, this kind of program can dramatically improve the
Remote and hybRid woRk is the staRt of a new economics of reopening, too – especially for organisations with properties
beginning, not the end of tRavel in major cities worldwide.
The current pandemic sped up a global shift in work culture – away from Finding success with these new models will also require hotel brands
the prioritisation of daily office time and towards a broader adoption of to focus more directly on serving their target customer group, rather
remote work. This is a trend well covered in the media, but it has not yet than trying to offer a product for all markets. For example, subscription-
been thoroughly addressed by a weakened hospitality industry. In fact, there’s based strategies can help hospitality leaders target and retain the “digital
an opportunity for hotels to hold a vital position in the future of work, with nomad” customers they served before the pandemic – and even convert
structural changes in corporate travel balanced out by new use cases in travel. what were formerly short, transactional stays into ongoing long-term
One use case that will be increasingly important is a shift towards more relationships, as companies like Netflix have done for streaming services.
internal travel. New research shows that employees will likely travel to corporate
offices for monthly or quarterly gatherings, as employers look for ways to development pipelines must seRve this
preserve the benefits of in-person interactions -- ranging from relationship hybRid maRket
building and the development of corporate culture, to passive knowledge From a development and investment perspective, it will be important
transfers and active strategic planning, and especially high-stakes meetings or for hospitality leaders to maintain – or even grow – their presence not just
the resolution of conflicts. (After all, ask any 100 per cent remote companies in the kinds of global destinations that digital nomads may now seek, but
and even they will tell you when a team is not working well together, or there also in the cities and regions that continue to serve as hubs for technology,
is tension, they encourage meeting in person). It’s also likely that smaller and finance, and other knowledge industries.
more frequent conferences and events, already the fastest-growing segment in Savvy hoteliers are taking this approach to development pipelines
meetings, will become more popular. Similarly, bleisure and workcations will be because they recognise an acceleration of pre-pandemic demand
on the rise, and length of stays will increase as work/life balance evolves. generators. Many knowledge industry companies already moved to
decentralise their operations. As a result, a large number of employees
pursued a lower cost of living, and the migration of knowledge workers
from major cities to more affordable places like Florida and Texas is well
understood – as is the resulting need for far-flung teams to periodically
gather at company headquarters.
Even more than pre-pandemic, employees in a distributed workforce
will need socialisation, collaboration and face time, and they will need to
visit their company headquarters periodically -- staying in hotels during
their trip. Hospitality leaders who remain committed to the real estate
markets where those headquarters are located will ultimately benefit from
the acceleration of distributed and hybrid workforce models.
It is tempting to wish for the pre-Covid days of transient, frequent, and
even arbitrary travel. Certainly, travel will be different. But different can also
be better, and for hospitality leaders who recognise that hotels can play a
central role in the future of work, the potential for continued success is
citizenm hotel impossible to ignore.
washington dc, us

42 RETAIL & LEISURE INTERNATIONAL FEBRUARY 2021