A blend of the traditional hotel experience, with elements of the coworking and coliving spaces as well as restaurants, wellness, retail and more.
These multi-purpose buildings cement their position as local leaders through the provision of a variety of services for both visitors and residents. Hybrid hotels apply in any location and here we focus on the trends and themes underlying the transition of non-hybrid hotels to a new role as community hubs within their cities and neighbourhoods.
In this period when the implications of COVID-19 reinforce uncertainty, the way we used to do things may need to change a little. This is a real challenge for hotels all over the world when we take a look at their recent performance. According to data provided by STR, US hotels RevPAR went down from 83.6 to 51.8% during the pandemic. Also, the respective drop in European hotels ranged from 89.4 to 64.8% during the pandemic.
Such a real challenge requires a spirit of creativity and innovation, which often lie in making available resources be used more efficiently and with new purposes. So let’s see how hotels can make the most of their assets and engage more closely and effectively with their local communities.
The Market Shift By Airbnb
The first step takes us back to the outset of COVID-19 and to the initiatives of the unicorn platform that hotels love to hate. As soon as Airbnb pinpointed why the pandemic had shifted the attention of consumers from short-term to mid-term rentals and from cities to rural areas, it didn’t take long to put a new strategy in place. This involved providing offerings and information for new audiences such as students and remote workers, with the concept of nomadic travel at the core of campaign messages. As part of the continuous approach to diversifying the range of consumer experiences, Airbnb has made clear that sometimes demand creates its supply.
The Forces Driving Behind Hybrid Hotels
Besides Airbnb, Marriott and aparthotels in London have recently been among the top performers in engaging local consumers with the option of selecting an extended stay inventory, whether they want to live, work, or play. However, the mix of work and overnight stays under the umbrella of supplementary services is anything but a new concept.
The real estate sector was the first to experiment with multi-purpose buildings long before COVD-19. Late in 2019, PWC identified mixed-use as the second most popular property type in a survey among investors considering what to do with defunct assets. In the words of one respondent: “the biggest opportunity lies in the conversion of office buildings into serviced apartments or other types of residential properties with characteristics and offerings assimilated to hotels.”
For hotels, it is all about increasing revenue without putting more heads in beds. To draw new customers to their hotels, owners and operators are required to reimagine the use of key assets (meeting rooms, lounge rooms, restaurants/bars, parking spaces, laundry facilities, membership services such as gym, pools etc.) and adjust it to the needs of people who live and work in surrounding areas.
Such an approach involves three areas of activity:
Identify new ways to monetise under-utilised spaces including selling on an ad-hoc basis different room attributes and hotel amenities and creating a more personalized experience for both staying and non-staying guests.
Continue to offer a helping hand to local communities based on experience and expertise built during the pandemic and previous disasters (food and equipment donations to vulnerable groups, relief measures for hospitality employees, special offers to essential workers etc).
Develop partnerships with local businesses and redefine the hotel’s position in day-to-day community life (e.g. through events bringing together guests and local community members who are inspired by the same interests and needs).
Ηybrid hotels are a prototype of new lifestyle forms
Like many other businesses, hotels are required to make significant adjustments to their business model to build the Low Touch Economy, triggered by the COVID-19 crisis and precautions against physical contact and large group gatherings. This involves developing new products and services to respond to emerging consumer preferences and behaviours, with 85% of US travelers pointing out they would like to see hotel brands utilising technology to reduce direct contact. Take for instance ITC Hotels in India and the Lavanderia initiative they launched in June, offering contact light laundry services with strict monitoring of safety and hygiene norms at each step (hand over of laundry items at a designated point at the hotel, picking up of items within 24 hours and e-message including a payment link to enable contactless payment).
Ηybrid hotels are a reliable partner of your community
In many cases, hotels have recently managed to maintain innovative practices and develop new services, showing a true spirit of hospitality and their solidarity with local communities despite the growing challenges caused by COVID-19. Among a wide range of initiatives, it’s valuable to highlight those driven by a dedicated agenda of social and environmental issues (e.g.):
• Supporting communities across the US by connecting more than 17,000 hotel properties with the health community (Hospitality for Hope Initiative by the American Hotel & Lodging Association)
• Networking with community-based organisations supporting Black Lives Matter initiatives (Jupiter Hotel in Portland)
• Acquiring the B Corporation Certification that measures a company’s entire social and environmental performance (QBIC Hotels)
• Developing a corporate social responsibility program preparing local unemployed and disadvantaged community members to enter the hospitality job market (Selina)
• Running a Working Club for innovators, activists, progressive thinkers, and creatives to encourage grassroots projects and artistic expression (Eaton House in Hong Kong)
• Running a 14-night quarantine concierge service for returning residents (Ovolo Hotel in Hong Kong)
• Partnering with charity organisations to help out and connect with the older adult community (Ennismore in New York City)
Ηybrid hotels are an anchor of the neighbourhood
While the range of examples mentioned so far outlines the brave new world of hybrid hotels, one hotel’s position in the neighbourhood will continue to be the most valuable asset to promote and exploit. This is the case of The Grand Quartier in Paris which is defined as a place of life and a place of exchange. The main video theme of the website explicates how the idea of offering a new vision of “urban well-being” derives from the blend of hotel services and activities which allow staying and non-stay guests to interact and immerse themselves in different experiences.
It seems to be right for hotels to step up their game and enter new territories to maximise opportunities for community engagement. If you wish to diversify your hotel portfolio or expand your tools for increasing the availability of affordable properties in your city, the team at TOPOSOPHY can help you through this transition with an array of selected services, such as Consumer surveys and product testing, Guest journey mapping and experience design, Marketing and branding strategies, Strategy sprints and workshops.
