Scandic Hotels has become the latest company to offer coworking at its properties, at around 270 locations in Sweden, Finland, Norway, Denmark, Germany and Poland.
The news came as the group reported that occupancy had decreased slightly in August after rising in June and July.
The group was offering co-working at €19 per day, €79 per week or €199 per month, free from The any subscription or notice period.
Jens Mathiesen, president & CEO at Scandic Hotels, said: “The coworking trend is booming in the Nordics as the need for permanent offices is decreasing in line with digital development. Not only that, both larger and smaller businesses are looking for increased flexibility for their teams and operations, whether it’s remote or on site.
“People are looking for more modern working solutions and we’re seeing a growing demand for workspaces closer to home or on the go from guests and corporate clients. With our 270 hotels in six markets, we can offer flexible, inspiring and cost-saving workspaces, regardless of where you’re based.”
The hotels offer a variety of solutions depending on user needs, from lounge seating to quiet areas. Private workspaces in hotel rooms were also available upon request. The offer was available for drop-in guests as well as small to large companies seeking an alternative area for working, collaborating and networking.
Mathiesen said: "Guests have been working from our hotel lobbies for many years and have appreciated the dynamic and creative environment that Scandic has to offer. Now we’re taking the next step by enabling access to a workspace in our hotels including more quiet areas and meeting rooms by the hour, as well as coffee and refreshments.”
Miguel Casas, head of hotel investment properties, Continental Europe at CBRE, told us: “The boundaries are being blurred between offices and hotels and there are going to be nice synergies.”
News of the coworking strategy came as Scandic’s occupancy fell slightly in August, to 34% from 42% in July. It estimated that the occupancy rate would be 30% to 35% in September leading to expected occupancy of around 35% for the third quarter.
The group said that there had been a gradual increase in booking activity since the end of August, but due to the continued high element of rebookings and cancellations, the increased booking activity had not yet led to increased occupancy.
Scandic expected occupancy to increase gradually during the autumn as activity levels in the larger cities were expected to recover from a very low level. In the beginning of September, approximately 95% of Scandic’s total room capacity was open.
Mathiesen said: “As anticipated, the level of activity increased during the summer mainly due to domestic tourism. It’s important, however, to emphasise that the way things develop during the rest of the year will largely depend on our corporate customers. Covid-19 will likely impact our industry for a long time to come, so we need to ensure profitability at lower occupancy levels than before.”
The company said that it expected to see Ebitda aided by at least Skr300m (€29m) in government support, excluding aid for furloughed team members, attributable to the company’s Swedish, Danish and Norwegian operations. Scandic estimated that an average occupancy level of around 40% was normally needed to achieve break-even based on adjusted Ebitda, excluding government support.
During the first half-year, Scandic carried out cost-reduction measures and further actions were planned, including talking to landlords regarding temporary rent reductions for 2020.
Insight: Scandic is not the only company to think that getting into coworking is the way to bring in some extra cash at this point - in Scandic’s case, €19 per day and that’s not to be sniffed at when you can’t hit breakeven without the help of the government.
For Scandic, most of the governments where it operates have appreciated that the hit hospitality must take is long term, not over by October. It must also hope that its landlords take a long-term view and, with not many alternatives out there, it is likely to be fruitful in its discussions.
While the search for a vaccine continues, hotels are going to have to look to flexible solutions to keep the coffers ticking over. Whether that is coworking, workations or schools in ballrooms.