Renting a luxury room brings respite for home workers (and hotels)

LAS Vegas might not sound like the best place to hunker down and get some work done. But hotel groups are hoping to change that.

MGM Resorts International is offering a new "Viva Las Office" package, whereby frazzled home workers can swap a view of their backyard for one of the Bellagio fountains. Opt for the top-end "Executive" deal, which starts at US$278 a night, and guests can stay at the Vdara Hotel & Spa or the Aria Resort & Casino, work from a lavish suite or an outdoor cabana, and wind down afterwards with a poolside massage.

Since the pandemic halted lucrative business travel and overseas vacations, hotels have been confronting their biggest ever crisis. They've had little choice but to get creative in filling all those rooms. That's why operators from Whitbread Plc's budget Premier Inn to the luxurious Mandarin Oriental International Ltd are trying to attract a new clientele: home workers. If they succeed in repurposing their properties, the hotel trade may be an unlikely long-term winner from our shift to flexible working.

Most of the focus right now is on the rise of work-from-hotel programmes, through which operators not only offer workspace in hotel rooms, but also provide Wi-Fi, business support, refreshments and use of other facilities.

Accor SA, the French hospitality company, launched Hotel Office in August - and the programme is now in around 220 hotels in the United Kingdom and 70 in the Benelux region. It's also available in Russia and South America and is being expanded to other markets, including North America, Hong Kong and France.

In the UK, you can work from the group's five-star Hotel Sofitel St James. For £350 (S$614) a day, you get one of the most deluxe suites, along with breakfast, unlimited tea and coffee, lunch and a cocktail in the bar. Or you can go the budget route and work in an Ibis - their offerings start at about £30 per day, which is roughly comparable to subscribing to a hot desk in a co-working space. Accor says it's seeing strong demand from individuals booking a single day to get respite from distracting building work, noisy children and crowded house shares. But companies are also looking for longer-term availability. In Russia, for example, one business booked multiple rooms in an Ibis hotel for two months.

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Other hotels are partnering with co-working companies to offer workspace in their rooms and suites. Proper Hospitality, which operates luxury hotels in Los Angeles, San Francisco, Austin and Palm Springs, recently teamed up with premium flexible office provider Industrious.

Still, selling rooms for the day is a less profitable proposition for hotels, typically commanding 50-80 per cent of the price of an overnight stay. Then there's the cost of intensive cleaning. But with hotel occupancy at less than 50 per cent globally in August, according to data provider STR, having some extra customers is better than earning no income at all. Meanwhile, managing room occupancy to maximise profits is a core skill of hotel operators. Richard Clarke, a leisure analyst at Bernstein, says the dream would be to sell a room twice over - once for a daytime worker and once for an overnight stay.

Although the struggling industry is far from this happy situation, flexible working may leave a lasting legacy. Up until now, business travel has mainly involved people visiting customers and staying in nearby hotels overnight. Now we're likely to see a greater proportion of the trade made up of workers coming to spend some time at corporate headquarters.

CitizenM, a hip Dutch hotel chain, recently signed a deal to build a 240-room hotel next to Facebook Inc's Menlo Park, California, campus. The company is unusual in the industry because it owns the vast majority of its hotels. It is backed by Singapore's sovereign wealth fund, the Dutch pension fund APG and entrepreneur Rattan Chadha, founder of the Mexx fashion brand, so it can afford to take a long-term view. But it's still a bold bet on more nomadic workforces. It's even possible that as corporate offices shrink, some vacant floors could be turned into on-site accommodation, which could also be managed by hotel chains. Alternatively, companies cutting back on traditional office space might use hotel facilities when their teams come together.

With infections rising across Europe and the United States, the hospitality industry's focus is firmly back on navigating the crisis and new restrictions. But there are reasons to think that our great work-from-home experiment could help hotels cope in a post-pandemic world. BLOOMBERG