Work From Hotel: what does it cost? #WFH
In this fourth article in the series where I example Work From Hotel offer, rental of vacant hotel rooms for day use.
I covered benefits of the various Work From Hotel offers in the previous article and established who won the WFH name game.
Now let’s look at what it costs to work from a hotel room for a day.
As previously, the following hotel brands are included in the comparison: Marriott, Hilton, Accor, Mandarin Oriental, 25 Hours, and Radisson.
What’s the discount?
Most of the brands chose to apply a discount of the day-use rental against the typical one night stay. The discount is not a set %, but has shown to vary from 17% to 50% (in the hotels and dates selected for comparison).
On average, the discount mostly ranges from 24–32% of the overnight stay for the same day compared at the selected hotel.
One price strategy
25 Hours chose to go with a set price rather than a discount. This makes sense from the standpoint of their brand portfolio and the control they have over a relatively standardised room offering.
In comparison to all the other brands, with a much larger global scale, a multi-brand portfolio, different owners and ownership structures and many more complexities. Also allowing hotel revenue management teams to adjust as the overnight room rate changes.
There is no one right way to price WFHotel
A set price is easy to understand and get behind, without having to compare prices of different locations. But is the best financial decision?
When comparing prices of the set 50EUR per night against what is available to book overnight as a normal booking, the savings at 25 Hours in Berlin and Vienna were a dramatic 67 and 68%. Is that simply lost revenue due to oversight or a strategic offer?
What is your price?
Normally, you pick a hotel matching your level of finance and service preference. As much as I would love to stay at the Mandarin Oriental, I am very far from being able to afford it.
Same, obviously, applies to Work From Hotel. Ranging from 50 to 512 EUR for a room in Paris, at 25 Hours and Mandarin Oriental respectively. You will choose the one that fits your needs and your wallet.
In the price game, there are no winners or losers. There is just a strategy, so there is no right or wrong way to do this.
WFHotel or a coffeeshop?
Let’s take an average offer of about 70 GBP in the upscale brands compared, and compare it to say, working from a coffee shop for a day.
The WFHotel offer includes:
- Private quiet space
- Ergonomic workspace
- Premium wifi
- Coffee and tea in the room
- Some hotel facilities access
The coffee shop offer includes:
- A socially distanced space
- Hopefully near the plug
- Decent wifi
- Premium coffee and tea
- Most likely design furniture that is not so ergonomic
- The social aspect of being near people, even if not engaging with them
It is clear that when choosing to Work From Hotel, you are primarily paying for the privacy of your own quiet space. Secondly, you are paying for premium wifi (I hope!).
Many nomads, freelancers and entrepreneurs have been choosing to work from coffee shops and co-working spaces for a long time now, will Work From Hotel replace that for them? I don’t think so.
While work from coffee shops has changed with the presence of covid and Work From Hotel emerged from the shadows because of covid, they will not replace one another. They simply serve different customers with different needs.
In the next few articles I am going to explore ways an independent hotel can jump on the wagon and capitalise on this revenue opportunity, what does it take?
