How Hotels Use Regus to Convert Empty Conference Space Into Flexible Workspace

As technology has given rise to remote work and virtual collaboration, International Workplace Group (IWG) — the multi-brand flexible workspace provider with over 3,500 locations in 1,100 cities globally — has emerged as the leader in the flexible workspace industry. Poised to capitalize on the hybrid and remote work trends that have been accelerated by the pandemic, IWG allows landlords and investors to build or convert commercial spaces into fully-furnished, I.T.-enabled flexible workspaces, presenting a unique opportunity for one subset in particular.

Hotel owners.

“Flex space is an excellent opportunity for hotel operators,” IWG of The Americas CEO Wayne Berger said. “There's a lot of empty space in hotels now, and flex space presents an opportunity to generate revenue from that dead space, activating what is traditionally old, underutilized spaces into functional flexible workplace environments.”

Business travel is the lifeblood of the hotel industry, and in the wake of the pandemic and with the rise of hybrid and remote work, business travel will likely never be the same. According to the American Hotel & Lodging Association, in 2019, before the pandemic, business travelers made up 52.5% of all hotel industry room revenue.

Now, a recent report says that hotels are projected to end 2022 down $20 billion in business travel revenue — 23% below pre-pandemic levels — after losing an estimated $108 billion in business travel revenue during 2020 and 2021 combined.

Add to these trends the fact that technology continues to allow us to connect virtually more effectively and that, according to a Deloitte Corporate Travel Survey, 50% of companies are optimizing their business travel policies to decrease their environmental impact, and hotels could be waiting on a business travel rebound that may never come.

Regus, the first brand under IWG, provides a solution for hotels hurt by these shifts in business travel and the industry at large.

A clear leader in the flexible workplace industry, Regus offers thousands of full-service, private offices in the most convenient locations, with workspaces that can be customized and personalized with full amenities and flexible layouts. The brand provides customers with professional reception staff, flexible membership terms and access to a global network of professionals in a range of industries, giving hotel concepts access to a new customer base.

According to Berger, there are already a number of similarities between how hotels and flex spaces operate that make the conversion to flexible workspaces seamless. They both have reasonably transitional client bases — the same way a hotel guest stays for a short time rather than long-term, IWG tenants are shorter-term compared to the typically lengthy commercial leases. And, like a hotel, clients use IWG spaces as amenities to provide hospitality in a commercial setting.

“The similarities make flex space quite attractive to a group that invests in and operates hotels,” said Berger. “Nobody sleeps in their offices, the hours are quite finite, and we have centralized operations — technology, amenities, accessibility to offices and meeting rooms. All you really need to operate is a small, select staffing group that's there to meet and greet clients. It’s a familiar model that hotel operators can really take advantage of.”

The biggest key, however, is the space. Hotels typically have large, often outdated conference centers and meeting rooms reserved for business travelers, conventions and other events that simply aren’t as frequent as they once were. Converting this into a flexible workspace has a number of advantages, including appealing to a customer base outside travelers alone.

“There's a lot of empty space in hotels now,” said Berger. “By creating and deploying flex space, hotels now have an opportunity to shift their lobbies and those conference or meeting rooms to actually bring in the local business community versus the traveling businessperson. Where there's a hotel, there are normally restaurants, cafes and everything else nearby, often within the hotel itself. This is not just an opportunity to activate what is traditionally just old, dead space into functional, revenue-generating flexible workspace, but also to attract a new client and supplement other revenue streams.”

Less than 4% of all commercial office space is currently utilized as flexible workspace. According to Jones Lang LaSalle (JLL), that will rise to 30% by 2030, while the global flexible workspace industry is projected to nearly double in size, from $7.97 billion to $13.03 billion, by 2025.

As the demand for flexible workspace continues to increase, IWG is currently seeking building owners, and both institutional and individual investors in key markets across North America. With already more than 1,200 locations in North America — 1,050 in the U.S. —  IWG’s ultimate goal is to surpass 10,000 locations, and it plans to accomplish this by adding 1,000 locations each year.

“What we're seeing is this complete Renaissance amongst workers and companies,” said Berger. “Driving 1,000 locations each year is purely to be able to meet the demand.”

Learn more at https://www.iwgplc.com/en-gb/develop-a-location.