The future of the hotel industry

The future of the hotel industry
The future of the hotel industry

The way people travel has changed, so the way that hotels operate needs to change, along with it. Fundamentally, the change in travel patterns is marked by two shifts – duration and flexibility.

Having taken up the challenges of travelling both domestically and internationally – the increased stress, the need for COVID-19 tests and the like – people are travelling less, but staying longer at their destinations. Also, as lockdown restrictions remain fluid and entry requirements to most countries remain a moving target, the modern traveller needs flexibility to make changes to their schedule at a moment’s notice, without being penalised.

Before the ‘Digital Nomad’ came the remote worker – a class of work that has grown by 140% since 2005. The arrival of the pandemic and swift digital adoption has swelled the global Digital Nomad workforce to 17 million and counting – a market worth $5 billion. Companies like Twitter, Facebook, Google, Amazon, Spotify, Shopify, Salesforce, PayPal and Uber have announced that their employees will be able to work from home for the foreseeable future – and PwC has gone a step further by telling its 40 000 US-based client services employees that they will be able to work virtually and live anywhere they want to, in perpetuity.

With the trend of remote working looking likely to continue into the future, business travel will have an interesting flip within the industry. In person meetings will be required less often but more people will be required to travel than before, as families have now had the opportunity to semigrate to smaller cities, meaning that business travel will now become a requirement for many people that used to live near their headquarters. We are likely to find that business travellers are going to look for locations that offer them a base to work from while staying, as well as extending trips to add a few days here and there to reconnect with friends and family.

New multi-use developments like BlackBrick are emerging as a reinvention of vacant office buildings into accessible accommodation and co-working spaces, becoming ‘vertical villages’ of serviced, furnished hotel apartments with everything from meditation gardens to boardrooms, boxing gyms to cinemas, theatres to Zoom pods and bars, for integration of ‘live-work-learn’ spaces, into one building. The concept means that buyers can have access to the facilities at the buildings in Sandton and Cape Town – with more local and global opportunities in the pipeline, including Los Angeles, Mexico City and Dubai – by buying into one of the ‘clubs’.

In a market decimated by COVID-19 lockdowns, BlackBrick has managed to achieve 75-85% occupancy, while occupancy averages of listed hotel companies have reported 10-15% and 19% occupancy, respectively. The approach BlackBrick has taken has resulted in higher yields for investor buyers, and has ensured steady growth for BlackBrick resulting in the brand now increasing their Sandton offering to over 500 units over the next year. “The future of the hotel model relies on offering a converged solution to flexible living,” says Prenisha Rajdev, BlackBrick Sandton General Manager. “By being able to flip seamlessly between short and long stays and offer a complete live-work-learn solution for the modern digital nomad, a new model for the future of hotel operation has emerged – and it’s one that people can own a piece of”.

While travellers were initially hunkering down for long stays to minimise travel – even when travel was once again allowed under revised lockdown levels – the trend has swung back to shorter stays. “The arrival of Level 1 lockdown and the removal of South Africa from many countries’ red lists – principally the USA, UK and Germany – has seen a deluge of international and local short-stay bookings for summer,” says Rajdev. “The change has subverted the way people travel and they now expect to be able to switch between a short visit and settling in for a longer stay once they’ve explored local work and play opportunities”. The BlackBrick team has welcomed over 10 000 guests to their properties in their ten months of operation.

With long term projections of remote working becoming an option for most young people and free-minded people (who want to expose themselves to different cultures and experiences across the world), they will see work and travel as inseparable and something that could be done at the same time. Historically, people would work in their home city, and when they’d travel they’d go for holiday. Now, the digital age makes working from anywhere possible, which is the future. Blurring the line between leisure and work (bleisure or workcation).

Prenisha says that new ways of looking at the world require new ways of living, working and travelling – and there’s no room for inflexible, monotone, culturally-exclusive, static hotel experiences in that world.