Is Your Next Office a Luxury Hotel Suite?
The hotel industry is in free-fall. Time to get creative!
As I look outside the room of my window at The Standard East Village on this Saturday night in late summer, it offers an expansive view of Manhattan with the Empire State Building due north and Third Avenue below me. On a typical weekend night, the city outside would be teeming with life: students on a bar crawl, streets jammed with cabs and Ubers, out-of-towners traipsing, or stumbling, around on the lookout for late night shenanigans. On this particular Saturday night however, the city that never sleeps is decidedly, well, taking a catnap. There’s nary a pedestrian in sight. The occasional cab has ample room to rumble down the street. Even the Empire State Building, glowing in stark bright white, looks lonely.
Thus is the heart of an otherwise bustling tourist destination that, much like the rest of modern life, has been turned both upside down and inside out in an era of COVID-19. Matching the silence outside, inside my hotel (and my room outfitted with sanitizer and Akalo vitamin patches), it’s not much different.
“We’re operating in a very different landscape for travel,” says Amar Lalvani, the Standard’s CEO, with an assessment so ubiquitous it’s become the mother of all cliches. “Occupancies are low, which we’ve never faced before. New York hotels typically run at 90 percent occupancy, and now rates in the city are 10 to 20 percent. We’ve never faced numbers like this, but as much as there are challenges it also creates opportunity.”
In addition to the health and safety aspect which many hotels have adopted across the board with some variation, many hotels are rethinking everything they’ve ever known about the business in a time when occupancies have plummeted and properties are shuttering.
The grim stats are a stark reality of the industry that Lalvani knows full well, as he oversees multiple locations dealing with a variety of local restrictions whether in Miami Beach and London (both open) or Los Angeles and the Maldives (both currently closed). “You could say we’re forced to be creative, but I say we’re allowed to be creative,” explains Lalvani of how his company, known to woo a hip, younger demographic, is tackling his industry’s many contractions. “When our hotels are running at 90 percent you can only tweak it at the margins and you don’t have the allowance for flexibility to do anything more than that.” So, while it’s an industry in free fall, that also means it’s zeroing in on some novel ideas to lure weary travelers.
When the East Village outpost of The Standard reopened in late July, Lalvani followed the lead of hotels across the country with two basic ways to mold the hotel industry to its current era: both reimagining spaces themselves and rejiggering ways in which people can book. When it comes to the physical aspect, the team revamped the property’s crown jewel, an expensive Penthouse which overlooks the city and typically holds events, into a sort of multipurpose room guests can use at their leisure complete with Peloton bikes, a ping pong table and spaces reserved for yoga. On the booking side, The Standard is offering a unique program dubbed Stowaway: special rates designed for longer-staying guests.
“The people who are traveling now are staying put whenever they’re going,” notes Lalvani. “With all the energy involved these days in getting around, people want to stay longer.” It’s a lure that’s also geared toward New York nine-to-fivers who loathe to take public transportation from locations outside the Big Apple, enabling guests to rent a room at special rates by the week, two weeks and by the month. “We’ve never priced our hotels to make that possible before.”
Another popular brand aiming to capitalize on the upheavals of both office culture and the hospitality industry, Marriott International’s expansive portfolio of over 5,000 properties is attempting to take full advantage of the turbulent era as well. With all employers suddenly finding themselves remote and companies giving no timetable on a return to an office, if ever, #WorkFromHome went from a niche lifestyle fit for freelancers to a universal experience. Swooping in on the trend, Marriott has launched a #WorkFromHotel initiative at locations as varied as Colorado’s Element Basalt-Aspen, La Posada de Santa Fe in New Mexico, as well as the New York Marriott at Brooklyn Bridge. “A lot of people just want to get out of the house after being stuck inside so long,” said Sam Ibrahim, the general manager at the latter Marriott franchise. “It’s a change of scenery.”
For Ibrahim, the #WorkFromHotel concept is a result of “looking at everything with a different lens and getting much more creative than ever” and hinges on part-day rentals. “If you want to have a meeting for four hours, we’ll give you a room and you can have it for four hours. If you just wanted to work, do that too. We’ve offered it in the past, but now (it’s grown) and we are doing it more than ever.” Even Ibrahim notes he’s been getting fatigued in his own office. “Truth be told, I’ve been working from our lobby more and more.”
In addition, Marriott is also pulling out as many stops it can think of when it comes to making guests comfortable, whether making sanitizer stations prevalent around their properties to wrapping in-room high-touch objects, like television remotes, in plastic. “Before my job was more monotonous: you come to work, you do your job, you go home. Today, I come to work and say, ‘What can I do with this hotel tomorrow and into the future? What opportunities are there?’ We’re doing things we really never thought possible.” That also includes an application that boasts a mobile key to limit another high-touch situation. “You can do everything from open your door to order food from the front desk.”
Meanwhile, some hotels are throwing out their entire business models and simply starting from scratch. A Residence Inn in Pittsburgh, Pennsylvania is reportedly turning their expansive suites into temporary student housing for the University of Pittsburgh’s fall semester, much to the delight of incoming students who suddenly have an indoor pool at their disposal. In Los Angeles, the haute Chateau Marmont, long known to be a celebrity haven, recently announced plans to turn to a members-only booking system in the face of the pandemic. Some properties are even trying to make up for lost revenue by turning to an app dubbed HotelsByDay which allows users to book rooms by the hour for a fraction of an overnight rate, along with granting access to amenities like gyms and pools.
Over at The Hoxton, the London-based chain which has locations in Portland, Chicago, and Brooklyn, they’re still trying to lure traditional guests while going one step further to lure homebound employees to their hotels. As hospitality veteran and the brand’s Nick Hafer explains, “We’re thinking of turning some of our guest rooms into offices. All Hoxtons have a space called the apartment which has four or five rooms and a commissary kitchen in the middle of it, so the idea would be to turn it into a shared office space.” In other words, a mini-WeWork. “Right now we’re just testing the waters with that. It’ll be a great option for people who live down the street and just don’t want to sit in their apartment every day.”
These out-of-the-box ideas would never be even in play if occupancy was anywhere near normal levels, but Hafer likes to take a half-glass-full approach to his job. “Even as dark as things were getting (in the past), I’m not much of a pessimist,” he says. “I’m often very optimistic to my own hurt sometimes. But I always felt that things would bounce back.” And much like his counterparts at Marriott and Standard, Hafer’s incongruous ideas all must be executed with a fraction of their typical staff, forcing teams to be nimble. “If we try something, we want to make sure our tiny team is spending their time on a novel idea that would lead to a rebound.” It’s a chess game that sometimes leads to hits and misses. A Hoxton promotion that offered mini-weddings, where permissible, was launched and Hafer was skeptical at first. “I was like, ‘I wonder if anyone is gonna actually book this?’ But boom, we got one right away. It was like, ‘Alright…’ Even for the future, it’s guaranteed revenue.” On the other hand, an initiative dubbed The Floor is Yours where guests can rent out entire floors garnered scant interest.
It’s a wild reality hotels across the nation never imagined they would find themselves in, with many obviously counting down the days until the pandemic is behind them. Until then, there are some bright sides. “What’s amazing is that guests used to be in your face yelling and screaming,” says Ibrahim back at the Marriott. “But today, I find them so more kind and understanding than ever before. They actually make it a point to stop and say good morning.”