Hotels are realising that their lobbies don't have to be empty for most of the day – the army of freelancers that have traditionally taken up tables can be moved to a dedicated, paid-for workspace, where they can have all the benefits of an office as well as the food, beverage and service of a hotel. Rosalind Mullen reports on the new breed of flexible workspaces
Freelancers have been flipping open their laptops and getting down to work in cafés, hotel lobbies and countless other spaces for at least a decade. A study by MyVoucherCodes found that 13% of UK staff work from a coffee shop every day; and workspace companies such as office space giant Regus have been rolling out flexible businesses. According to statistics on Allwork.space, the global market value for these workspaces is estimated at $26b (£21b).
Many hospitality operators have also tapped into the market. Soho House launched Soho Works at the end of 2015 in standalone premises in the East London Tea Building in Shoreditch. The workspace concept is open to Soho House members and non-members who pay from £400 a month, offering a dedicated workspace with the chic design and service of the brand. A second London site opened at White City House last week, with 180 the Strand due to launch next year, alongside premises in New York, Los Angeles and Hong Kong.
The big brands are also joining in. InterContinental Hotels Group has just unveiled its Plaza Workspace concept at the Crowne Plaza Paris – République. Designed by design studio Conran + Partners, Plaza Workspace is focused on meeting the needs of guests who blur the lines between business and leisure. It provides space for meetings alongside an abundance of access to power points, high-speed WiFi and wireless phone chargers integrated into tables.
Food and beverage served within Plaza Workspace is focused on plant-based ingredients, with dishes designed to be restorative and inspirational. Matcha, chia and kombucha will be offered at the start of the day, and sleep-inducing drinks like Jersey milk with the herb valerian feature towards the end. The first Plaza Workspace in the UK will launch at Crowne Plaza London – Heathrow next year.
Also muscling in with a new model is Ennismore, which has trounced many UK hospitality operators by offering guests dedicated floors of flexible office space, which it has branded WorkingFrom_ at its newly opened hotel the Hoxton, in Southwark, south London.
While the Hoxton's chilled lobbies have been unofficial workspaces since the brand launched in Shoreditch in 2006, WorkingFrom_ aims to offer a more curated service and monetise it to boot through an occasional or permanent membership system.
"The past couple of years we have watched how flexible working has become a huge phenomenon," says Ennismore founder and chief executive Sharan Pasricha. "We have been in the co-working business for 10 years – we just haven't charged anyone for it. We thought, ‘why be a lazy landlord when we could take the [magic] of our lobbies to create an elevated workspace for everyone who loves the brand?'."
The opportunity to add workspace floors became clear when the company started work on its Chicago hotel, which opened in April, and its Southwark branch, which opened in September. "I was nervous to go above a certain roomcount because we were early in both neighbourhoods," says Pasricha. "So we spent a lot of time talking to people to find out what they like about our lobbies and what they like about other co-working spaces, and we framed some ideas about what ours would look like."
At the 192-bedroom Southwark hotel, WorkingFrom_ will offer extensive facilities for freelancers when it opens in January. There will be 764 dedicated desks, communal spaces, five meeting rooms, a wellness studio and a winter garden across floors seven to 12. Additional facilities will include showers, lockers, bike storage, a help-yourself pantry and a members' café. In Chicago there are 286 desks across two floors and similar facilities. Access is via lifts in the lobby or dedicated entrances.
"What we are excited about is that we will capture the excitement of Hoxton. It's not a separate block; it's on dedicated floors in the same building," says Pasricha.
WorkingFrom_Southwark will be open 24/7. Membership options include a £30 day pass; a £200-a-month desk-hop membership; £500+VAT per desk a month for a permanent desk in an Open Studio of six to eight people; and £700+VAT per desk a month for a Private Studio. A Side Hustler membership, for use after 5.30pm or at weekends, is available for £75 a month.
One of its USPs will be transparent pricing with no extras, says Pasricha: "We don't charge for printing and meeting rooms. What you see is what you get. We learned that [among competitors] what co-workers pay can rack up exponentially, with added costs for photocopying and so on. We cut that out."
He's sure it can't fail to appeal to locals and guests alike: "There's no question that the enhanced number of people we will have will bring more activity to our bars and restaurants and rooms and increase our revenues," he says.
"It is not a private members' club, it's a workspace that has membership. We want to make sure our guests get great value. You can get ‘Duvet Days' as part of membership, so if you are working late and there is capacity, you can get a bed for £25. Food is delivered to your desk in 20 minutes. It is more about leaning on the infrastructure of the Hoxton and drawing on the clientele we already have."
London is a competitive market with plenty of trendy, dedicated co-working brands, including the Office Group and WeWork, but Pasricha says the Hoxton is unique: "Very few brands have co-working in hotels. We thought about how we could use the incredible infrastructure with our bars and restaurants and fundamentally differentiate it."
Certainly, if you're conjuring up a traditional hotel business centre, think again. The workspaces are designed by Ennismore Design Studio and will channel the laid-back cool of the lobbies but with the addition of library desks, ergonomic chairs and wireless charging.
As well as lots of natural light, there will be cosy corners, bright communal spaces with armchairs and custom-designed daybeds, studio spaces, offices, wellness classes and nutritionist-designed ‘brain food'.
"Picture a Hoxton lobby with permanent desks, coffee stations, amazing furniture – a beautiful workspace environment attracting a mix of people," says Pasricha. "It is [like] an extension of our lobby in look and feel – it is all the things you like about Hoxton, including tea and coffee and music."
And guests and locals can still sit in the lobby with their laptops without paying for membership. "We have always embraced people who want to spend time in our lobby, use our WiFi and drink coffee. But Working From_ offers a different type of work experience – a more curated lobby experience."
The 30-strong Village Hotel Club has also spotted the workspace opportunity, as showcased in two new 153-bedroom properties that opened near Portsmouth last year and near Bristol in May. Its business model merges its pub and restaurant into one Pub & Grill, and sees the introduction of a shared working space called VWorks. The high-tech concept retains Village's state-of-the-art leisure club facilities and Starbucks outlets in line with its role as a community hub, drawing locals and travellers alike.
"The traditional pub and restaurant [in Village hotels] were underused, so we have created the Pub & Grill, focusing on sporting events to bring in locals as well as residents. We have used the space where the pub was to create VWorks, a members' business club," says chief executive Paul Roberts. "We recognised a couple of years ago that people are looking for working space – we have Starbucks in all our hotels, so we are used to the working-in-a-café culture."
VWorks is a flexible business space, offering either a hot desk or a permanent desk, which Roberts says represents around 30%- 35% of set-up. The concept is championed by business ambassador Baroness Karren Brady, and workers can rent desks from £20 a day up to £1,200 a year. They gain access to a lounge area, meeting rooms, free photocopying and printing, high-speed WiFi, food ordering tablets for timed delivery and free refreshments.
And potential is growing, as Roberts explains: "We tried this over 18 months ago [at Portsmouth], with what we thought would be just a co-working opportunity, but quickly found that people were essentially running their business from our hotels."
The next phase will be the addition of serviced offices, which will allow businesses to develop from within VWorks. There are small meeting pods for up to six people and larger rooms for up to 20. Some sites also have meetings and events rooms for 300 delegates.
"We see it as an opportunity to monetise traditional meetings and events space that would be empty for much of the time," says Roberts. The workspaces play well alongside the leisure facilities, which attract about 4,000 members at each hotel. "Compared with other business centres, we have the advantage of having a leisure club, great food and beverage, a Starbucks, parking and hotel rooms on-site," he says.
Village, which is owned by Denver-based private equity firm KSL Capital Partners and has a £480m expansion plan to open 15 further hotels by 2026, has ramped up the programme and repositioned 19 existing hotels to offer VWorks in commuter locations, such as Birmingham Walsall, London Watford, Cardiff and Newcastle. A couple of VWorks have already notched up in excess of 150 members within 12 months and delivered a 25% increase in profitability in that space. The combining of the pub and grill has seen an average uplift of 20%-25% in revenue.
"So, instead of VWorks eating into other areas of business, it is attracting more people into our buildings for more hours of the day," says Roberts. "Village's national network of hotels means that corporations are buying day passes for their teams; hotel guests can now upgrade to a VWorks pass; and leisure club members can bolt-on access to it. We think it is an exciting space and we are keen to do as much as we can to support all of our members," says Roberts.
The development has also made Village think differently about its bottom line. "We never thought about profit per square metre before, but this does create that idea. All of a sudden we are in a process of thinking of parts of the business in terms of a return on investment per square metre rather than topline sales," says Roberts.
"In this market, labour and margins are under pressure – all direct costs are incremental. So, with the VWorks membership model we have a continuous revenue stream each month and bolt-on effects of an increase in business in the leisure clubs and in food and beverage, as well as meeting room hire for interviews, so we can monetise each side of business. Areas that used to be empty for several hours a day now work. We have an all-day dining menu. We have this continuous flow of income streams and guests at each stage of the journey."
How Searcys filled the daytime lull with workers Restaurants also have an eye on the UK's more agile workforce. In early 2018, on the back of a scheduled refurbishment, Searcys made changes to its iconic Martin Brudnizki-designed St Pancras Brasserie and Champagne Bar to specifically target creatives looking for stimulation and workers travelling from A to B.
"We had [business lulls] between 10am and 12.30pm and 3pm to 5.30pm, so by providing good power points and furniture we can provide a service during downtime," says Matt Thomas, managing director of Searcys.
Capitalising on the trend for workspaces and hot-desking was an obvious move as St Pancras already served commuters, but the facilities and layout needed to be rethought. A third of the dining area was turned into workspace tables, the number of power points was quadrupled and the WiFi upgraded.
There is also a private dining meeting area with presentation screens for up to 12 and a day meeting package for £65 a head. The furniture and facilities are important because they send a clear signal. "The chairs had to feel like restaurant chairs," says Thomas. "We upgraded the power sockets; we bought tables that could be used as drinks stations but that also had power stations in the legs that more than tripled our power capability. I don't think the workplace [area] is different to the restaurant – people like to be together with open desks where they can have informal meetings."
The introduction of workspaces at St Pancras has led to a 7% increase in consumers using the space for meetings or solo working. This has contributed to an overall 32% increase in revenue year-on-year, from meetings taking place over breakfast and lunch to conferences in the private dining room and events in the Champagne Bar.
"If we take this venue exclusively we are selling more drinks and lunches and an incredible increase in the number of breakfasts than before," says Thomas. "We have an innovative space that people enjoy spending time in and so if we have downtime during the day we need to be able to display good hospitality – this is about making people feel welcome in the space you have with as much as you can."
Historically, many hospitality operators have discouraged guests working in their outlets, but Thomas says demand is changing that. "Good hospitality should be intuitive. Don't think about how we want our customers to behave; let's think about how they want to behave. The restaurateur approach to an enquiry if a guest can work should be ‘yes, come in'," he says. "I don't think we are doing anything revolutionary other than recognising that the market wants to use restaurant space differently than it did 10 years ago."
The future of flexible working
The flexible office space sector across Europe has more than doubled in size since 2014 and is set to grow by up to 30% a year over the next five years. (Source: JLL)
Flexible office space in the UK will account for more than 8.5% of total UK office stock by 2023; currently it's at 5%. (Source JLL)
Chinese group Jin Jiang invested $260m (£210m) in co-working space provider WeWork in 2016.
Among hotels, boutique independents have been the first to muscle in, such as:
Hobo hotel in Stockholm, Sweden, which opened in 2017 and markets itself as "a meeting point, a workplace, an office or just a nice place to visit and hang out", with rooms you can book.
Hotel Schani Wien, near Vienna's Central Railway Station, opened in Austria in 2015 and has integrated a co-working space into the hotel lobby that includes 12 desks. Hotel guests can use the space for free and locals can buy a day pass for €10, a 10-day pass for €90, a 30-day pass for €150 or a permanent desk for €190 a month.
Big hotels are getting involved, too:
- Accor has partnered with developer Bouygues Immobilier to launch Wojo (formerly Nextdoor) "spots, spaces and sites". It has been trialling a hotel co-working space in Paris with a view to opening 1,200 co-working spaces by 2022.
Work in progress
C-Space This co-working space is set to open in Newquay in Cornwall in October. It will have 118 desk spaces, F&B residencies and 25 ‘affordable lifestyle' hotel bedrooms (opening in 2020). The project is being overseen by Cornwall Food Foundation chief executive and Fifteen Cornwall managing director Matthew Thomson, Crowdfunder chief executive Rob Love and social enterprise the Real Ideas Organisation. [See The Caterer, 16 August 2019]
Spacemize This co-working members' platform was founded in January by Saleem Arif and Zain Dhareeja and backed by Saeed Al Ghurair. It aims to help monetise F&B areas, public spaces and lounges in four-and five-star hotels by turning part of them into co-working spaces during the daytime. Hotels provide free tea and coffee for members, WiFi and a 20% discount on food and beverage and other areas of the hotel. Hotels signed up include W London – Leicester Square, Marriott Marble Arch and Abode Manchester.
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