The recovery in hotel bookings across the United States and Europe this summer can be partially explained by a growing number of hybrid travelers.
Castleforge Partners has noticed that hybrid travelers — white-collar workers who mix business with leisure — are taking extended weekend stays away from home that allow them to work while vacationing with their families. Michael Kovacs, a founding partner at Castleforge Partners, says the real estate investment management firm has seen between a 10 percent and 20 percent increase in the length of stays at its hotel properties when compared with pre-pandemic levels.
“Thursdays and Sundays have picked up in some markets,” says Kovacs. “And that’s the case because some travelers are working on Thursday and Friday and then spending the weekend at the same hotel, either by themselves or with their family, and then they depart on Monday. Historically, you wouldn’t have seen the same Thursday-to-Sunday activity being incorporated as part of someone’s weekend travel [plans].”
Kovacs says the work-from-home phenomenon has allowed for the wider acceptance of the work-from-anywhere trend, which is fueling demand for hotel space from hybrid travelers.
“COVID has not created a new class of traveler. The term ‘bleisure travel,’ for example, predates COVID. However, it has accelerated what was already happening beforehand,” he says.
This acceleration can be seen in employer attitudes as well, with Kovacs recently hearing of a New York–based firm that gave all its employees the freedom to work from anywhere they wanted throughout August without having to report into the office.
“A lot of the firm’s people went to pretty far-flung places and worked remotely, doing so very effectively. And that is the classic definition of hybrid travel. And these are firms that I would never have expected, even now post-COVID, to allow their employees to work for four weeks from anywhere in the world. So it just goes to show how [attitudes have changed].”
However, hotels in Europe will take a while to be able to adapt to the need for larger extended-stay rooms. Kovacs believes that the cost-benefit ratio for many hotel providers may not make sense from a refurbishment perspective.
“What is the return on investment that you would get for adapting existing hotels? It may not be that the incremental value that you get from being able to appeal to a hybrid traveler is worth the cost of consolidating rooms to increase size,” he says. “I’m not so sure that hotels will be easily able to adapt … But I think that what we’ll probably see is that, at least in the early stages, demand for this product will probably outstrip the available supply.”
Marek Handzel is editor of Institutional Real Estate Europe.