Generating an additional source of revenue is at stake in the hotel sector due to the prolonged effects of COVID-19 on international travel. Hotel owners and operators have many lessons to learn from the likes of hospitality brands that drive the optimum use of property portfolio and high performance. Referred to as hybrid hotels, 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 percent during the pandemic. Also, the respective drop in European hotels ranged from 89.4 to 64.8 during the pandemic.


Source: Presentation by Kelsey Fenerty (Research Analyst, STR) at Global ReformBnB Forum #4 (November 4, 2020)

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 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 the coronavirus. 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.”


Source: PWC, 2019

For more than five years, the hotel sector itself has seen several initiatives where the provision of overnight stays and office space enable co-working and interacting. These vary from the likes of major hospitality groups such as Accor (e.g. WoJo and Accor Local) to a wide range of independent ventures such as Zoku, Ace Hotels, Hoxton/Ennismore, CitizenM, and Kerten Hospitality. The success of these initiatives lies in their capacity to provide tailor-made services to a community of customers made up of guests and locals alike.It is suggested that hotels can benefit from an increase in their turnover by up to 20% if they endeavour to shift to a “hybrid” hospitality model.

The concept of hybrid hotels is essentially relevant to a series of wider trends in urban planning, architecture, and design. Here we relate to the “Soft City” concept, which involves the construction of dense and more diverse buildings that contribute to vibrant, equitable, healthy, and sustainable urban environments. 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.

In each separate case, creating a fresh culture of hospitality rather than competing for niche target segments is the reason to leverage the hotel’s core capabilities to serve a wider community. 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 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)