How to Repurpose Hotel Assets into a Shared Living Experience | SPX Lab
Travel and tourism in the post-coronavirus world will certainly look different and many businesses in hospitality have to adapt dramatically to stay alive. Travellers are more scared, not convinced that their rooms will be virus-free and many will limit their holidays for the year to their country. Nicolas Vigier, co-founder of BNB Real Estate, manages 60 Airbnb apartments in France with his agency and mentioned that “before the crisis, our clients were 90–95% foreigners. We had very few French people booking our apartments”. The statistics have now changed and according to Airbnb, domestic bookings in the Netherlands and Denmark have increased respectively by 80% and 90%, compared to April 2019.
Many hotels had to shut down partially or completely for a long period, with generous cancellation policies and full refunds to non-refundable reservations. STR, a hotel data benchmarking firm, predicts that the worldwide occupancy in hotels that are still open is less than 30%. In Europe, the occupancy amounts to only 10% compared to the same period last year. Great revenue losses, combined with uncertainty about what the future will hold are the main reasons why the hotel industry needs to adapt. Given all the necessary hygiene measures that hotels will need to implement, starting to think about innovative solutions to reposition themselves will be necessary to attract guests in such unprecedented times. In this article, we will focus on the steps that you should take into consideration if you are looking to repurpose your hotel assets into a more sustainable model for the future.
Adapting to fulfil the market needs
In order to adjust to the market needs, it is necessary to identify the specific target groups that COVID-19 will not significantly affect. Two great examples are students and young professionals. The reasons rely on the fact that many universities already started to run properly and a great percentage of students will be required to attend classes from the start of the upcoming academic year.
Taking the example of the Netherlands, where big cities are characterised by a housing shortage, it is quite a common phenomenon to meet people that struggled or are struggling a lot to find accommodation. The cost of housing increases due to high demand and younger generations do not have the affordability to rent their own studio or apartment in the current market, but they often need to split the cost (and their privacy) with other roommates. Therefore, it could be an extremely wise move for hotel managers to start thinking of repurposing their hotel assets into a living model that can guarantee a more stable revenue in the upcoming years, as the population of students and the mobility of young professionals is projected to continue to grow.
Moreover, people are coming back to their offices and the crisis will give a new boost to international mobility for young professionals looking for a better economic scenario. What is certain is that both of them are not going to prefer the option to stay for a short period in a hotel or short-term accommodation while finding something suitable, but they will try to directly search for a mid or long-term housing contract to minimise interpersonal contacts.
Considering the Best Options
The target group is clearly influenced by the location of the property, which was already crucial, but is now more important than ever as people will look to go more local and prefer shorter distances when they have the chance to choose. Taking into consideration the local environment and thinking about its future development is crucial to reach successful results. If you have a hotel near a business park, for example, it may be interesting to offer mid to long term stay for professionals that come to work from another city every day. This would reduce commuting time and make it possible for these people to even separate the work in shifts at the company office. Another scenario presents if your hotel is situated in a secondary city, which is a location that will grow in attractiveness as students and young professionals will still be looking to get out of home, but cannot afford to move to a primary city yet.
As the target group changes, it is important to have in mind that the planning process is completely different from the one of a normal hotel. Young generations are looking for something that will fulfil their needs, in a good location and at an affordable price. Depending on the location, budgeting, analysis of the target, available space, proximity to universities or business hubs you could be choosing to convert your hotel assets into a PBSL (Purpose Built Shared Living Space), or a PBSA (Purpose Built Student Accommodation), or a serviced living model (a hybrid between hospitality and mid/long term accommodation). Another idea could be to create different packages for different needs and targets including both a longer accommodation and other services such as gym membership, a half-board meal service (lunch or dinner) or access to a specific professional network. Without a doubt, a serviced living building needs to provide a seamless living experience. As pioneers in the field of emerging Real Estate, we would like to share with you some steps that might be wise to take into consideration before repurposing your hotel assets.
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Originally published at www.spatial-experience.com on June 4, 2020.
