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How the new breed of co-working companies are filling empty hotels

05 March 2020 by

Hotels regularly have a room that looks a little empty during the day, and the new breed of co-working companies are on the look-out for hoteliers who are looking to rent out space to freelancers – and upsell their services. Elly Earls reports on a mutually beneficial relationship

Half of the UK’s workforce is predicted to be working remotely this year, according to the Office for National Statistics, and an entire industry has grown up to support them.

A decade ago, there were fewer than 200 co-working spaces worldwide. By 2017, that had shot up to 15,000 and, according to research by Instant Offices, which matches businesses with flexible office spaces, there are now 35,000.

The industry has grown at the incredible rate of 200% over the past five years and the UK, with 32% of the global share of flexible office space, is leading the way. London alone saw more co-working space openings than any other city in the world last year.

Yet for many freelancers and small businesses, this way of working is out of reach. With monthly hot desk membership at some WeWork co-working spaces in London coming in at £600, it’s no wonder that many remote workers prefer to set up shop at a Starbucks or a Costa and drag that one cup of coffee out for as many hours as possible – despite the fact that it’s far from an optimum set-up for either freelancers or cafés.

It’s taken a while, but over the past few years hospitality operators have started to realise there are better solutions, which can both help them improve the day-to-day life of the growing remote workforce and bring in some extra cash.

It started in the US with companies like Spacious and Flexday, middlemen who would come into restaurants and bars that were sitting empty during the day, and bring high-speed WiFi, power sockets and free-flowing coffee and – ta-da – affordable co-working spaces for freelancers and a new market for restaurateurs. Over the last couple of years, the UK has caught on to this too.

Out of office

AndCo, which launched in 2018, was one of the pioneers. The more freelancers and remote workers founder Sanj Mahal spoke to, the more complaints he heard about the lack of convenient places to work in between meetings and on the go. He also visited several co-working spaces and couldn’t understand why people were paying through the nose for them when these types of spaces already existed all around the country and many of them were sitting empty during the day.

Mahal decided to take matters into his own hands. AndCo is a flexible hot-desking solution that allows on-the-go professionals to book a desk or meeting room in some of the best hotels, restaurants and bars throughout the UK. Instead of hundreds of pounds, it costs freelancers £20 a month all in. There’s no fee for restaurateurs to join.

“After applying to become an AndCo venue, they join the platform, we take some beautiful photos of the space, install the AndCo WiFi box and they’re good to go,” Mahal explains. “Our members book hot desks and meeting rooms through our platform. The venues have complete control of how their space is used. They set their own opening times and number of tables available through their venue dashboard, provided by us. They can turn desks on and off as required.”

The big benefit, of course, is increased footfall. “These venues have abundant space that isn’t being used throughout the week and they benefit from all of the upselling opportunities that additional footfall can bring,” Mahal explains. “We also run a lot of events and workshops in our venues, provide data on footfall and can offer marketing support through our various channels. We put the venues on the map for a new demographic that they weren’t reaching before.”

Steakhouse Sophie’s Soho general manager Susie Hall decided to sign up to AndCo because the venue had a lull in daytime diners and wanted to do something with all those empty tables. The restaurant has since increased its revenue and had more people staying for lunch, as well as benefiting from a more fun, friendly atmosphere during the day. However, the process hasn’t been without its challenges.

“Members can sometimes forget that they are in an F&B venue and not in an office, so conference calls can sometimes be an issue; however, we have a private dining room, so we can offer them that,” she says.

“I’d recommend it to other restaurant operators for sure. It’s a tricky concept to get your head around at first because of the new clientele and mindset, so some restaurants may be wary, but it is super-easy to control.”

The model also made sense to Point A Hotels. “As a hotel business we have some great working spaces that were underused during the day as people were not aware of them. We wanted a platform that would help us promote the spaces and get people into them to create a good vibe and increase revenue,” says marketing manager James Allen.

It has worked. “We have seen an increased remote workforce using our lounges for small business meetings and workspace and creating a buzz within the property. We have also seen incremental revenue gained from the F&B spend,” he says.

The only challenges the team have experienced have been operational. “We manage the space and reservations to prioritise our hotel guests; however, through the platform we can adjust available hours, so this hasn’t been a big problem,” he says.

Hotels: a one-stop shop

Hotels are even better placed than restaurants to capitalise on the co-working trend, according to Zain Dhareeja, who set up Spacemize – along with business partners Saleem Arif and Saeed Al Ghurair – to help them do exactly that.

“With a restaurant, you’re just getting a seat and WiFi, but with hotels you have different facilities so you can offer a one-stop solution,” he says.

Spacemize connects mobile professionals with a growing network of luxury co-working spaces in underused areas of hotels for £9.99 a day or £79 a month, including complimentary tea and coffee.

The process for venues is simple. An individual account is created for each venue, they decide which areas they want to make available for Spacemize members – whether that’s the restaurant, the lounge, the bar or a private area – and set the number of people allowed into the venue and the specific days and time they have access.

“We’re essentially an extension of a hotel’s marketing and sales team,” Dhareeja explains. “We promote their venue on our platform and our members become their customers. They generate additional incremental revenue through our members purchasing food and drinks, booking meeting rooms or event spaces, booking gym and spa access and even late availability hotel rooms.”

The W London Leicester Square decided to start working with Spacemize because it was seeing a slump in footfall after breakfast. Now co-workers can set up shop anywhere in the hotel bar, but tend to choose the booths with power sockets. On most days, there will be one or two tables reserved in advance.

“It’s really helped us generate a bit of footfall and it’s also put us in contact with people who are working on interesting concepts,” says B&F manager Dario Mazzoli. “W is all about what’s new and what’s next, and many Spacemize customers are entrepreneurs who are building up businesses that we’re aligned with. It’s really interesting for us as a business.”

The extra revenue hasn’t hurt either. “There’s a flat fee but we also offer Spacemize customers discounts on spa treatments, boardroom meetings, bookings and F&B. I’d say in general every second Spacemize member buys food or beverage,” Mazzoli says.

Spacemize is also launching a mobile app, which will make it easier for venues to promote their services and add-ons.

“To be honest, I’ve only seen advantages and no disadvantages at all; it’s definitely a growing trend,” Mazzoli says. “The world is getting smaller and smaller, so I think you’re only going to see more of an uptake in this.”

AndCo head of partnerships Tom Wordie agrees. “Remote working continues to rise and we can’t see this changing for the foreseeable future. A lot of corporates are even scaling back their office space and encouraging their workforce to work remotely. Whole companies now don’t have offices. We’ve changed the way we travel, what we wear to work, the tech we use and now where we work is changing.

Company collaboration

WorkSpott
WorkSpott

Other players in this space include Workspott and the Work Room, which follow very similar models to AndCo and Spacemize.

Workspott’s flagship venue is at Drake & Morgan in Pancras Square. While certain floors continue to operate as an F&B venue during the day, the lower level – the Green Room Bar – has been transformed into a co-working space.

“Our lower level of the venue has a great working space that isn’t used during the day and warrants a great environment to work from,” says Drake & Morgan general manager Laurie Lafon.

“There are lots of added benefits to collaborating with a company, such as WorkSpott, which works with our team to help create awareness and bring new users to our site. And although we need to be more attentive and educate our team on how WorkSpott users differ from normal diners, for the most part it is all very similar.”

Meanwhile, the Work Room was launched in collaboration with D&D London in June 2019 and allows the capital’s professionals to book a table at its participating restaurants and use the space as their office during the day. All locations are equipped with super-fast WiFi and plug sockets, and will serve complimentary tea, coffee and water.

The Work Room offers day passes for £10. Restaurants available on the Work Room app include Soho spot 100 Wardour Street, both Bluebird Chelsea and Bluebird White City, and Francesco Mazzei’s restaurants Fiume and Radici.

Marriott opens its gastropub up to Spacemize

Pickled Hen
Pickled Hen

The Pickled Hen is a British gastropub in the London Marriott Hotel Marble Arch. Its owners decided to sign up to Spacemize so they could increase footfall during quiet periods, as well as getting involved with inspiring businesses.

“We have quite a large space, and the bar and restaurant sections are busy around the major dining periods,” explains Marriott senior marketing executive Amy Wilmot. “However, if we have the space, WiFi and plug sockets, then why not fill them with co-working clients?”

Since inviting Spacemize clients into the building, the team has created new relationships that have brought extra business and revenue, as well as awareness in the local area and partnerships. They now have several regular guests who use the space to host meetings. Being located inside a hotel, they are also able to offer a selection of bedrooms and private meeting rooms to Spacemize users who are looking for something other than just a co-working space.

The Pickled Hen does, however, limit the number of Spacemize members they can take at any given time to ensure they are still able to welcome other guests who are coming for lunch or afternoon tea. They also ask that if there will be other people joining Spacemize members they are notified in advance to ensure they have a suitable room.

Wilmot’s advice to other hospitality operators is to look at your space before opening your doors to an initiative like Spacemize. “It’s so important to keep communication lines open between the sales and marketing team and the F&B team.

“At the end of the day, we want to make sure that when a guest is welcomed into the Pickled Hen – or any Marriott restaurant for that matter –they will leave inspired,” she says. “It also needs to work practically and be logistically viable with the operations team. With that in mind, co-working, for us, is something that has been a great success!”

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