Image Source: WSJ
Facing a steep decline in global travel after authorities closed borders to stop the spread of coronavirus, hotels have shifted from catering to tourists and business travelers to offering 14-day quarantine packages for people asked to self-isolate, discounted long-term rates for travelers unable to go home and special pricing for health-care workers.
Now, a small number of hoteliers, from the U.S. to Germany to Australia, are pitching their rooms to a new demographic: people who find working from home too distracting. Perks typically include a proper desk, high-speed internet, a minifridge and a special rate to use the room just for the day.
“We’ve got to just get through this,” said Bill Foussard, owner of the White Bear Country Inn, a Best Western Plus outside Minneapolis that recently began advertising its hotel rooms as office space. “If we’re snoozing, we’re losing. You’ve got to be doing something all the time.”
Bill Foussard, owner of the White Bear Country Inn, is marketing his hotel rooms as office space and offering special rates for day use.
For $49, housebound office workers can rent one of Mr. Foussard’s rooms from 8 a.m. to 6 p.m. Any extra business would help, given that recent occupancy at Mr. Foussard’s property was at 15% during a time of year when he’s usually full.
Mr. Foussard said he had rented a few rooms for the day, so far. Rick Hudella, a 61-year-old IT management consultant, said he recently decided to work from the hotel. Mr. Hudella tried working from the small apartment he shares with a friend, but interruptions and so-so internet cut into his days. At the hotel, he sometimes works by the pool.
“I’ve kind of become a staple over there during the day,” said Mr. Hudella, who lives about a 20-minute drive from the White Bear Country Inn. “I saw a guy poking his head out of a curtain today that looked like he was on a conference call as well. I’m guessing it’s starting to catch on.” Despite the presence of a bed in his temporary office, Mr. Hudella said his days are too busy for naps.
Hotels have generally been allowed to remain open during shelter-in-place orders, though some governments have barred them from selling rooms to tourists. Revenue per available room at U.S. hotels, a commonly used metric of hotel performance, declined nearly 84% in the week ended April 11, the biggest decline on record, according to data company STR.
Roughly eight out of every 10 hotel rooms sat empty, a drop of nearly 70% from last year, STR data show. Already, about 70% of hotel employees have been laid off or furloughed, according to the American Hotel & Lodging Association. And though travel restrictions could be lifted in the coming months, an April report from analysis firm IBISWorld estimated that overall revenue in the U.S. hotel industry will decline about 10% this year.
Ron de Wit, managing director at AHS Advisory, a hotel consultancy in Sydney, said he didn’t think the office promotions would make up for much of the lost business. People who can afford to pay a hotel for workspace probably already have a satisfactory office in their homes.
“My heartfelt congratulations to the innovativeness, but I suspect it’s a long shot,” he said. “The reality is 2020 will be a lot of red ink.”
If a room of one’s own isn’t enough to entice customers, some hotels are sweetening the deal. The Quality Suites Pioneer Sands, about an hour’s drive south of Sydney and part of the Choice Hotels International Inc. network, is offering a one-bedroom apartment for the equivalent of $55, which includes 10 hours in the room during the day, some free printing at reception, and lunch.
Hotel owners say they have stepped up sanitizing of doorknobs, handrails and public areas. One typical hotel perk office workers won’t get, at least if they rent for an extended period of time, is regular housekeeping. With many staff let go or working reduced shifts, hotel managers are asking long-term guests to tidy and clean rooms themselves.
Managers at Veriu Group, which runs nearly 20 hotels in Australia, advertised its rooms for office space after learning some customers were already using rooms to work during the day, said Kyle Kaya, the company’s operations director.
At Achat Hotels in Germany, which operates more than 30 hotels, about 100 people have booked to use rooms as offices, mostly in big cities like Munich, Stuttgart and Frankfurt, said Philipp von Bodman, the chain’s chief executive. Starting at roughly $43 a day, office workers can use the hotel between 8 a.m. and 7 p.m.
Mr. von Bodman said he is in discussions with a company about renting a number of rooms for its office workers, though the deal hasn’t been finalized.
“We would love to go back to be a regular hotel business,” said Mr. von Bodman, noting that Germany banned tourist stays in hotels. “But in these times, creativity I think is one of the key words.”