The recent spike in Google searches for the term "coworking" shows that there is no end in sight to the sweeping changes of younger generations' work behavior.

"Coworking" search term - 2004-2017 - Google Trends— Photo by EHL"Coworking" search term - 2004-2017 - Google Trends— Photo by EHL
"Coworking" search term - 2004-2017 - Google Trends— Photo by EHL

How hotels can benefit from the coworking trend

This development is of course hard to ignore. A shift from traditional ways of working, while considered detrimental by some, can be an immense opportunity for other businesses. Hotels are one such type of business that can benefit largely from offering coworking areas.

Communal spaces in hotels do not only attract a younger audience, but also serve as a way to connect with local communities in ways that an old-fashioned business center never could. A successfully-run coworking space can be a great way of getting more people to interact with your property, spend more time on-site and eventually generate more revenue.

Independent hotels such as Zoku in Amsterdam, or Hotel Schani in Vienna are living proof that the convergence of hospitality and coworking can be a recipe for success.

Source: EHLSource: EHL
Source: EHL

The number of hotels adopting this concept is steadily growing. With this change, the hospitality industry is moving away from a dominant paradigm that rang true for centuries. In these collaborative spaces, the guest room is no longer the hotel's primary product. Rather, their ability to connect traveling professionals, entrepreneurs and local communities in a way that caters to their need for inspiration and networking will be the crucial service business hotels of the future have to get right.

Successful ventures by smaller players into coworking are starting to pop up on the radar of large chains from all over the world.

Accor, the French hotel behemoth that is making moves towards becoming a travel platform touching customers' everyday life, views co-working as a crucial part of its strategy.

According to Accor CEO Sébastien Bazin:

Hospitality must evolve towards more flexibility and be able to open the gates to non-travelers for a drink, a yoga course, a fitness room, etc. In other ways, we are targeting non-travelers by bringing hospitality outside the hotel. Through strategic partnerships, we are now offering our hospitality expertise in new playing fields, for example, such as co-working places."

In 2017, Accor announced a partnership with Bouygues Immobilier declaring a plan of opening 80 collaborative Nextdoor workspaces by 2022, rolling out 10 to 15 locations every year.

Another example is quickly expanding Chinese group Jin Jiang. In 2016, the company made a similar move investing 260 million USD in the world's premier coworking space provider WeWork. The partnership will help WeWork achieve their ambitious growth strategy in Asian markets.

The integration of coworking concepts seems to become an unstoppable force in the international hospitality industry. Yet, the aggressive expansion plans are not immune to setbacks. WeWork's first ever release of financial performance data, showed the alarming rate at which the company is burning through its investors' cash. The business activity spread across 100 cities resulted in a loss of 2 billion USD in 2018. Generally, only 42 percent of coworking spaces are actually turning a profit according to the most recent Coworking Survey by Deskmag.

So, while the increase in popularity is undeniable and the demand for flexible workspaces will certainly stay an important factor in the design of future hotel concepts, companies looking to get in on the trend should heed the signs of unprofitable projects and adjust their planning accordingly. Operational margins and market readiness should be well examined before grabbing a board and surfing the coworking wave with all the other start-ups out there.

Ecole hôtelière de Lausanne
Communications Department
+41 21 785 1354

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