The growth of coworking - a Hail Mary for many hotels during the pandemic - must include a move towards greater flexibility, according to two members of the sector.
Matthias Huettebraeuker, strategist and founding partner, Denizen, told us: “Coworking is the wrong answer to the right question for Central Europe. People are working differently and we need more flexibility in what is work space. What we needed was space on demand. Do we need coworking? Not how it is at the moment.
“I think we have a different pace now, we have more remote teams and they need different facilities and different services. We have a vast number of different work states. As we learned through Covid-19, you need home, work, a third space, you need quiet space, space to collaborate and the idea of coworking is that you can offer all these options in one building? “you can’t cater to all the needs and states and wishes within a singular building. Coworking as a product to fix anything doesn’t work.
“While tenants needed more flexibility, landlords needed more efficiency and 10-year leases. No-one delivered that and so into the void came coworking. While it’s nice to have 10-year contracts, that’s only if people can pay.
“Before the pandemic, if you look at the potential for [office space] growth it was limited. You can make better use of the space. The smaller it gets, the more you get per square metre.”
Huettebraeuker’s Denizen model offers what it calls ‘space with a service’ distributing space on a platform. He said: “The platform always wins. You should move away from the pipeline business to the platform business, bringing together providers and consumers of space in a two-sided market. It’s easier for the consumer to consume space for a day and so you can concentrate better on what is needed so you can mix and match. It’s flexible, whereas the WeWork model is usually lease – restructure – resell.
“Landlords will have to think again as to how they sell their space. It’s a wider market for them. There is an increased need to services to real estate and, in Germany for example, if you add services you often have to pay more taxes, so it makes sense to have a platform provide them for you. It enables landlords to have more relevant spaces. It used to be ‘you build you fill’, but that’s no longer true.
“If people are working at home you can capture that, creating a hub and spoke model. You have to think about the environment you’re in and the environment your employees are in. Some of that will be leases and some of that will be a Starbucks and a WeWork.”
As the platform linking space to users was gaining pace, hotels were looking to drive revenues by introducing coworking. Jessica Jahns, head of hotels & hospitality research, EMEA, JLL, said: “Across all real estate sectors, more cross-sector collaboration is needed and is now emerging. That’s particularly true for the hospitality industry as it seeks new ways of operating after a long period of closure and low occupancy. It’s about turning redundant areas into much-needed revenue.”
However, Jahns said that this trend was likely to pass, adding: “There’s a strong probability that day-usage may dwindle as offices gradually welcome back greater numbers of employees. It will very much depend on demand, with much of that coming right now, for example, from flat sharers who find working from their home a challenge, as well as those on a freelance or contract basis.”
For some hotels, coworking has been more than opening up lobbies as workspace.
Accor has opened up its hotel rooms as the ‘hotel office’. A survey undertaken by the group, of 2,000 British office workers currently working from home, revealed that 41% felt their work like balance ‘had worsened since working from home due to coronavirus’. And 22% of Brits stated their productivity was down due to working from home distractions.
Karelle Lamouche, CCO, Accor Europe, said: “Workers are looking for alternatives to home working and many aren’t ready to or can’t return to offices. Hotel Office is a safe and flexible ‘working from anywhere’ solution to meet spontaneous needs as well as planned working. Hotel Office also responds to the needs of employers needing to tackle productivity drops whilst answering their duty of care to their staff to meet their physical and mental work pressures. As such many employers need a cost-effective, contract-free workspace solution for their staff which provides a reduced commute, flexibility and productivity in safe, clean private work spaces.”
Tom Rimmer, director of technology, Ennismore, told us: “We have co-working within our properties, not separately. The cowoking business is coming back for us, it’s all looking positive.
What you’ll see is more flexibility. We have an understanding of who is in the space and how they are using it and people will need flexibility. The difference with what we have is that we have the dedicated space. You have to have safe and secure space - which is not a hotel lobby.”
The comments came as citizenM launched a corporate subscription seeking to take advantage of changes to work patterns and the idea that some employees would have to travel some distance to reach offices.
Lennert de Jong, CCO, citizenM, said: “We got onto this idea of corporate subscriptions through our MD Development & Investments in the US, Ernest Lee. He is in frequent contact with corporate real estate planners and called me one day and said: “Let's get on the phone with some of these large companies' real estate folks and see how they are thinking about the future of work”.
“In these conversations it became very clear to us, that not only smaller companies went fully distributed but also the big tech boys are permanently allowing HQ staff to be located further from the headquarters than ever
“It is, for now, targeting people that work remote but need or want to be in the big cities occasionally. Obviously when people travel freely again in six months to one year, it also becomes interesting as a base deal for corporates or individual with frequent travel needs."
Commenting on citizenM’s subscription model, Rimmer said: “It’s a really interesting push to get corporate travel back. Everyone will be looking at it”.