The evolution of business hotels

Plus: Is the future of work the future of travel?

Each morning I walk by a bunch of business hotels on my way to work. Most of them are operating at very low occupancy. It’s clear they will need to evolve if the world doesn’t change significantly in the months ahead.

EHL has been working on this problem as part of the Innotour “The Future of City Hotels in Switzerland” project. The first step was a survey of hoteliers in Swiss cities in order to get a first glimpse of how the industry was affected by Covid-19.

The research looked into the ways in which the hotel spaces could be reassigned or transformed, and how hoteliers could reinvent their business model to meet their clients’ needs and potentially target new kinds of customers. The second phase of the project focused on generating ideas for the future of the city hotels.

Four major recurring trends regarding the future of the business hotel industry were identified:

  1. The hotel becoming a “Coeur de quartier”, a place open to the neighborhood.

  2. The hotel as a hybrid, flexible and quickly adaptable place.

  3. The hotel offering co-working spaces and relative services.

  4. The hotel as a destination where activities and events take place.

The trends above all focus on the hotel becoming a place of interest and attraction where people want to gather - whether its locals who want to have a meeting point close-by, professionals seeking to work in a pleasant environment, businesses expecting specific services, or tourists and locals wishing to experience something new, fun and authentic.

The target is no longer the business client, and the hotel does no longer represents a simple place to sleep. It wants to become essential and be open to everyone: families, locals, leisure tourists, business tourists, students, workers, etc. By doing so, the hotel uses flexible strategies to personalize the experience of each customer.

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Is the future of work the future of travel?

Love him or hate him, Brian Chesky has a unique perspective on what’s happening in travel now as CEO of Airbnb. In a recent interview on Decoder, he talked about the future of work - and how it could affect the future of travel.

I think that we’re living in a revolution for travel. For centuries, people were tethered to where they worked: whether it was the farm, then the factory, then the office. If you work on a farm or in a factory, you’re still tethered — but for tens of millions of people in the United States and hundreds of millions of people around the world who work in an office, what the pandemic taught us is that you can get a lot of work done from home. Because of technology like Zoom, we’re going to live in a world with permanent flexibility.

The CEOs of Ford, PWC, Amazon, Procter and Gamble — these are not small companies — have all announced permanent flexible policies for a significant portion of their workforce. I don’t think the majority of the world is going back to the office five days a week because CEOs will learn they can save money. They can hire a more diverse talent pool. After compensation, flexibility will be the most important benefit for employees.

Remote work is here to stay. If Zoom allows you to work from home, then Airbnb allows you to work from any home. People now can travel anytime. They can travel anywhere. I don’t mean everyone — when all the people who are untethered do travel, they can stay longer. What I think this is going to lead is to newfound flexibility where people cannot just travel on Airbnb — they can now live on Airbnb.

Twenty percent of our business, our fastest-growing segment, are for stays longer than a month. We’re not just in the business of traveling: we’re now in the business of living. Traveling and living is part of Airbnb. That’s why being part of the community is so important. This is all before borders really reopen. Once borders reopen and people have flexibility, they won’t just live anywhere around the country. You’re going to see more and more people live around the world. This is going to create a whole revolution in travel, probably the biggest change of travel since the invention of the internet, possibly the biggest change of travel since the invention of the airplane. It just totally changes the identity of what travel is.

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How does that affect how you plan to provide hospitality?