Workations – why hotels could make the best offices

The solution for some workers has been a return, not to the office, but an office. Internationally, hotel rooms have been repurposed to give workers the space and tranquillity that they need to work effectively – and to bring some much-needed revenue to those who own or lease the premises.

David Harper FRICS, of Leisure Property Services, estimates that a typical hotel would need about 60% of its rooms to be used as workspaces in order to cover its basic outgoings. He first noticed the Radisson Blue Sky in Tallinn, Estonia, renting bedrooms as private office spaces early in the pandemic – now, it has become a trend replicated across the world.  Some Singaporean hotels catering to office workers offer not only rooms as office space, but also use of their pools, gyms, saunas, and restaurants.

^{London-based hotel chain, The Hoxton}

London-based hotel chain, The Hoxton, which has hotels spread across Europe, and the US, launched Working From… in February 2020. “Like working from home, without the distractions,” its website claims. Sarah Parker, general manager of Working From…  says that lockdown measures and closures have meant that “we have been the lifeline for many people who can't work from home. Companies are looking for more flexible options as a result of the pandemic, we've definitely seen an uptick in memberships over the past few months.”

But while hotel bedrooms can easily morph into private offices, converting retail is trickier and will be dependent on whether a current retail space is suitable, practical, technologically equipped, and health and safety compliant.

In the US, a tsunami of vacant retail space has been flooding the market in recent months. “Owners will be aggressively looking for options to repurpose the space. Co-working is certainly one of the more important tools in their tool chest,” says Richard Latella FRICS, executive managing director of Cushman & Wakefield, US. “The highest concentrations of these… spaces are in mall environments, followed closely by urban street fronts.”

In the US, companies such as Industrious have been at the forefront of converting redundant retail space into co-working environments, a process that it has accelerated since the pandemic. It has secured large corporate clients such as Twitter and Pfizer as well as individuals wanting more temporary spaces, establishing workstations and flexible office space in suburban malls across the country.

^{US company Industrious has been at the forefront of converting redundant retail space. All images: Industrious Fashion Square}

But using retail space in this way is still in its infancy outside the US, says Stephen Springham, head of retail research at Knight Frank, London. The question is, he says, whether landlords or owners are, “looking for a quick fix because it’s better to have some sort of rent-paying tenant, even if it’s a lot lower than you had previously. But to do it properly and for it to be a long-term trend, will take a lot of thought, and investment. Creating permanent, even flexible office spaces will require a degree of fit-out beyond just chucking in a desk and phone.

“It’s got to be better asset managed and integrated with any surrounding food and beverage side. Landlords need to think how it’s presented rather than [doing the minimum and] hoping for the best.”

Harper says that some consultants are predicting it will take another three years until trading in the hotel sector recovers to pre-COVID-19 levels. In the meantime, for workers unable to access company offices, the provision of these non-standard workspaces offers a solution to their evolving needs.