With 2,8 million freelancers in France, mobile workers represent a dynamic and attractive market. Often catering to business travelers, hotels can easily attract mobile workers and local coworkers, especially since they have spaces available to accommodate them. However, in the face of competition, establishments must also offer packages tailored to different profiles.
After entering the vacation rental, events, and even cruise sectors for some players, the hotel industry is now venturing into coworking. A market trend for the past five years, coworking is not without competition or risks. However, hotels could greatly benefit by leveraging the dynamism and strengths of their market to establish themselves.
Coworking is seen as an opportunity in the service sector, as it allows for a diversification strategy aligned with their core business. This is particularly evident in the hotel industry. Indeed, shared workspaces are flourishing in establishments belonging to major hotel groups and chains, including Accor, Elegencia, Hilton, and Marriott. Entrepreneurs, executives, and SMEs can now set up shop in these dedicated spaces, often located within the hotels themselves, to work.
Making use of already available spaces
Are these strategic choices a sound calculation? Given the size of the market, it's difficult for the hotel industry not to be tempted by the potential offered by coworking. Indeed, with 2,8 million freelancers in France and the geographical flexibility of work made possible by new technologies and increasingly widespread in large companies, mobile workers represent a dynamic and attractive market.
Furthermore, hotels have the advantage of an available, untapped asset. With an estimated occupancy rate of 63%, these establishments can turn a weakness into a strength. The space is already available and requires little investment to get started, as all that's needed is a dedicated area and a Wi-Fi connection to enter the market. Of course, simply offering this option isn't enough to compete with other businesses that are constantly coming up with new ideas to attract coworkers. That's why many hotels offer packages tailored to all types of users: occasional or regular workers, solo entrepreneurs, or SMEs. The types of spaces also vary depending on the needs: meeting rooms, individual offices, and even brainstorming rooms are available. Finally, a range of additional services is offered: concierge services, gyms, and more.
A diversification strategy
The hotel industry has another major advantage over purely coworking-focused players. Its distinct yet complementary core business creates a virtuous circle for both the hotel and coworking markets. With a clientele often comprised of business travelers, hotels can easily attract mobile workers. To attract local coworkers, who don't book overnight stays, large hotel groups can leverage their strategic locations near business districts. Furthermore, the hotel industry offers attractive loyalty programs based on a points system that cover all their services, from coworking to overnight stays.
With an average global growth of 75% per year in coworking spaces since 2010, according to commercial real estate specialist Knight Frank, it's difficult to conclude that this market isn't attractive, even for hotel operators. However, the sector's fragile business model demonstrates that specialization within it can be challenging. This is evidenced by the setbacks of the coworking specialist The We Company, which had to abandon its IPO due to market skepticism. It is therefore probably safer to consider this market as a diversification strategy aligned with one's core business. This market complementarity allows companies to leverage existing strengths and, above all, to weather an economic downturn. Negative results in coworking would be offset by ancillary activities, unlike specialized competitors who would lack the safety net to withstand the long term. Thus, coworking could become a market monopolized by the hotel industry.
With kind permission of the Journal de l'Hôtellerie