“Co-Living & Co-Working – the trend for flexible living and working conditions by Jankarl Farrugia
The last decade has seen the rise of the so called “sharing economy” across a wide spectrum of industries from mobility (car sharing/pooling), entertainment and multimedia (Spotify and Netflix) to the financial sector with the crowdfunding phenomenon – disrupting traditional business in many sectors.
Of course, in the hospitality industry, this had already been seen in the split between demand for hotel accommodation versus the AirBnB/Couchsurfing option. However, the pandemic has brought a dramatic shift within the flexi-space industry and accommodation sectors, where co-living and co-working are now in even stronger demand.
Downsizing office space
Companies have had to rethink their approach to work – downsizing the office space yet retaining staff has led to more remote/homeworking options. This has resulted in office landlords looking to capitalise on their empty spaces by offering flexible options.
Real estate experts advise that expectations are for flexible office space to expand rapidly over the next decade. JLL predicts 30 percent of office space to be flexible in some form by 2030.
In some cases, landlords are stepping in to run the spaces under their own brands, doing this with no experience whatsoever. More commonly, landlords are turning to management agreements with flexible space operators, lease arrangements, or other forms of joint ventures, to take over these spaces.
The flexi-office income model
This flexi-office income model is more comparable to hotels, rather than traditional office lease structures, with the income stream being variable and dynamic.
We believe that hotels will be competing for this business as many hoteliers are revisiting what was known as the “business-centre“ space within their properties, creating more dynamic spaces for travellers to work from. During the pandemic, with low occupancies, many hotels turned rooms into offices, and this was the obvious decision to accommodate local businesses and individuals who needed that interim solution between office and home.
Some hotels are even going a step further by specifically designing their guestrooms for long-term stays, with kitchens and smart living rooms that can be transformed into an office or a meeting space, while still attracting those seeking short stays.
An increasing trend for flexi space
Add to this the increasing trend for flexi space already sought by the more established “Digital Nomads”, who have optimized their work/travel balance and are opting to co-live and co-work with other like-minded individuals rather than being on their own. There are dedicated hotel brands that focus solely on this market of travellers, such as Selina, Outsite and Assemblage who all leads in this niche. Complemented with plants, living systems and natural light to support mental health and well-being, offerings can include meditation rooms, a yoga studio, a film screening room and a library, along with full restaurant and private dining facilities. Offered on a monthly membership-basis, from access to a flexi desk space right through to private office space, these brands are at the forefront of the movement.
Hotel Solutions Partnership believe in adapting to change and our team of global consultants, along with our strategic partners, closely follow trends in the markets. We can offer dedicated support for hotel owners or investors that wish to look closely into this hybrid business model.
Jankarl Farrugia has worked for Corinthia Hotels International and Six Senses Resorts, in addition to IWG plc, the world’s leading flexi space operator.
Gadi Hassin, based in Sydney, is part of the Selina management team.