Few could have predicted how the pandemic-induced shut down of the economy three years ago would have a lasting impact on work patterns and office space utilization. The swift collapse of lodging demand, although stunning, was not surprising, as was the reduced foot traffic within retail centers. While these asset classes have largely rebounded, for the most part demand for office space remains depressed and directionally uncertain.
Office utilization is generally perceived to hover around 50 percent of pre-pandemic levels with some believing that an economic downturn will end remote working when a recession grants companies the leverage needed to force employees back into the office. While that is a possibility, companies may still operate on a hybrid working model to control costs and retain key staff during an economic slowdown.
I believe that the hybrid/remote/work from home model is here to stay. There is little doubt that widespread acceptance of a hybrid workplace is providing an improved work-life balance for many, and a benefit that few are willing to give up.
Hybrid/remote/work from home offers flexibility for citizens of the world to be highly mobile. The recent worldwide pandemic fueled embracement of technological advances allowing for combining work and leisure time and resulting in new customer groups for the lodging industry. Employees with hybrid/remote/work from home options typically choose Monday and Friday as their remote days, leaving Tuesday, Wednesday and Thursday as prime business days.
Providing co-working spaces at hotels has emerged as increasing numbers of professionals seek a quiet, comfortable and dedicated office space. Hotels have all the required facilities and infrastructure needed by professionals to conduct their businesses. While some one-on-one and small corporate meetings have been replaced with virtual calls, decentralized workforces need to periodically come together in person creating the need for corporate events and conferences.
At the very least, the future of work is a hybrid work model. Many will also embrace the digital nomad phenomenon allowing people to utilize technology and the internet while free to travel throughout the globe. Coupled with the inherent human desire to travel, which is now stronger than ever before, the new paradigm of a work-life-travel blend will be firmly established.
As this new phenomenon evolves, the hospitality industry will need to continue to adapt to changes that come its way. This change is not a fad and the smart hotels will embrace it as a new revenue stream.
Daniel Lesser is co-founder, president & CEO of LW Hospitality Advisors.