Insights from APT's Hospitality & Travel Practice

Should Hotels Rent “Pop-Up” Workspaces?

November 27th, 2013 | Posted by Dan Schreff in Uncategorized

Several major hotel brands, including Marriott and Starwood, are moving beyond the traditional meeting space rental business to offer “pop-up offices” in unused space around their properties. Marriott, through its Workspace on Demand program, offers two options for reserving workspaces in its hotels. Guests can reserve some areas with no charge, such as tables or seating areas in their lobbies.  For private enclosed workspaces, Marriott charges a fee, but offers the convenience and flexibility of rentals by the hour or by the day.  Starwood has introduced a similar concept, called Tangent, in several of its Westin hotels, converting the traditional hotel business centers into more modern work areas with couches, Wi-Fi, and video conferencing equipment.  They indicate that they are planning to launch this program in 40 more locations by 2014.

As more employees increasingly work remotely, hotels are hoping to take advantage of the growing need for convenient, reserved workspaces and meeting spaces.  Additionally, individuals who work remotely from their offices may prefer the convenience of a hotel meeting space, rather than working out of a coffee-shop.

These pop-up office spaces have the potential for success for several reasons.  In a recent USA Today article, APT SVP Maryam Wehe commented that “pop-up offices have the potential to generate revenue. Many spaces are near the hotel bar or restaurant, which could mean more food and beverage sales. The convenience of this offering may also have an impact on repeat bookings, as this service can be a differentiator for the hotel brand.”

While these pop-up office spaces have the potential to drive incremental profit, hotels also need to consider the costs associated with implementing these programs.  Significant program costs may include the renovations and new technology required to convert traditional business centers into more modern workspaces, as well as labor and energy costs associated with maintaining these spaces.

By implementing pop-up office space programs in a small subset of hotels prior to broader rollout, and comparing the impact to hotels that have not received the program, hotels have the opportunity to understand the impact of adding pop-up workspaces on profits and guest satisfaction.  In-market testing will enable hotels to understand where pop-up office spaces work best, and how to tailor rollout only to the locations where it will be most successful.

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