In the age of remote work, hotels serve a new purpose

Since the onset of the forced work-from-home era, many of us at CitizenM kept asking ourselves the same question: How is Zoom going to impact our business?

We rely heavily on corporate travel and bringing people together in person. Are we structurally impaired? Or are we back to normal once a vaccine is available?

For us to understand the future of corporate travel, we decided to first understand what the future of work looks like. This dragged us down a long, multi-month rabbit hole of remote work.

Now thrust into the mainstream, the pre-pandemic remote work world was a glorified sub-Reddit community of heretics. Think Bitcoin circa 2010. We went all-in trying to learn about this work philosophy. We started following the old-schoolers of remote work on social media, listening to podcasts, reading books and speaking to many of the influential players.

Following countless conversations with business leaders about the topic, we have conviction that most knowledge-based companies will adopt varying degrees of remote in the next few years. Top reasons stated are as follows:

• Talent war – Offering a remote job is one of the most strategic recruitment advantages now. Telling a candidate they get back two to four hours of daily commute time is a real edge, as is increasing the search from a 30-mile radius to anywhere in the world. If tech is already leading the talent war and quickly adopting remote policies, what does that mean for Wall Street and other Fortune 500 companies to hire the smartest?
• Cost savings – Real estate is often the second highest expense, after payroll, at most companies - big and small. The opportunity to eliminate or downsize this cost category, without impacting productivity, is a major shareholder win. Alternatively, companies will use remote working to reevaluate their burn rate, shifting expensive offices into funding to hire more talent, who will in turn develop more product, bring in more revenue or land bigger clients.
• Environmental, social and governance priorities – Sustainability and diversity have become very high priorities at many companies, as well as for the investors that back them. The ability to reduce the CO2 footprint by reducing daily car trips is one that many management teams and shareholders care deeply about. Furthermore, smart companies are using remote to fix diversity pipeline issues by looking at BIPOC candidate pools outside of their own backyards.
• Employee health – Remote work enables scheduling flexibility, which in turn allows better balance with family and physical health. Walk your daughter to school. Go out for a jog between meetings. Make your own lunch. This also alleviates micro-stress moments that lead to a poor mental state at the office - packed subway car, office politics, fabricating busy work. Happier employees stay longer and are better.
• Increased productivity – Study after study has shown remote employees are working longer hours and speaking more often. Meetings are starting and ending on time. Documentation and use of project management tools are on the rise, with fewer communication gaps as teams adopt more asynchronous working. For larger organizations, remote work also reigns in managers of certain age groups who can be highly disorganized or guilty of drive-by management.

A new role for hotels

To appreciate the impact on corporate travel, one would have to assume a rise in remote work will result in a rise in distributed teams. When you can work from home, you will want to work from anywhere. To appreciate the role hotels will play, you also have to understand the areas remote work falls short. These are new use cases for travel since co-located companies historically did not consume hotels in this manner.

• Relationships and bond-building – We are social beings, and most of us crave socialization. Working well together often requires some level of trust, empathy and humanizing elements – difficult to create in videoconference alone. Ask any 100%-remote company and even they will tell you that when a team is not working well together, or there is friction, they encourage meeting in person. Teams perform best not only when there is a shared sense of belonging and alignment, but also mutual respect and trust.
• Innovation and strategy – A favorite argument among office-first advocates is that you can never replace those serendipitous moments that lead to some next big idea. Steve Jobs always said the magic happened during spontaneous, random meetings at the office. The truth of the matter is that technology, some of which he helped create, has bridged the more routine water cooler talk. That said, more intense innovation will likely be sparked remotely and individually but taken to the next level on a whiteboard in person and together.
• Passive knowledge transfers – Among managers, the biggest concern in developing newer or younger employees has been the information that’s picked up through office osmosis. Overhearing a conversation. Observing how someone works – who they go to, what they say. Meetups of remote workers in the same area, with no agenda other than working alongside one another, is a way a remote team can replace this.
• High-stakes meetings – Meeting up with an investor for drinks. Having dinner with a banker. Closing a big sales account. All of these are conversations that are better in person. There is too much trust and too many nonverbal cues at risk to do over teleconference. As founders and management teams live farther away from traditional hubs, the need to travel in will pick up.
• Conferences and retreats revamped – As teams spend less time together face-to-face, the moments when you do get together become more valuable. Corporate social events like excursions and retreats are no longer a chore on top of the countless hours you spend with colleagues. Nor are conferences where most of your time is spent with external parties. These all now serve as more important moments of building culture.

While certain people romanticized the pre-COVID days of very transient, sometimes arbitrary, frequent business travel, a return to that life seems uncertain. Going forward, it appears those types of trips will now be met with strong deliberation.

What will replace that is the impact of remote work - connecting teams that were once in the same city, now hours apart. With these new behavioral patterns, we believe hotels serve a central role in the future of work - more analogous to office than purely accommodations. Hotel operators need to now not only understand what is important in-stay, but also study workplace strategy and fill the analog voids of a highly digitized world.