Featured in today's briefing:

  • Hotels fight to become a “third place” for remote workers.
  • The outlook for the Great Resignation continuing.
  • Watch out for the manager with an MBA.

The Virus

The latest virus forecast: The US has had a 7% decrease from two weeks earlier, with about 28,000 new cases on Friday. Infections are up in states including Arkansas, Connecticut, and New York, amid a BA.2 subvariant wave—and experts believe new variants will continue to cause waves of cases each year for the foreseeable future.

The business impact: US hiring remains strong, with 431,000 jobs added last month. Manufacturers, restaurants, and retailers added workers as consumers ventured out more amid the decline in Covid cases. More than 300,000 women joined the labor force in March, though there are still fewer women in the workforce than pre-pandemic. Hourly earnings in the private sector were 5.6% higher than a year earlier, though the pace of increases has slowed.

Focus on the Future of Work and Travel

As the weeks roll by, it's becoming increasingly apparent that many workers do not want to return to the factory-inspired ideal of sitting in an office five days a week. But it is also apparent that many don’t necessarily want to be sitting in their homes five days a week, either. So it's unsurprising that money is being invested in “third places”: spaces that offer an attractive environment, a bite to eat, and perhaps a bit of socialization.

It’s a shift that hasn’t gone unnoticed by the hospitality industry. Walloped for periods of the pandemic, many hotels are now betting that the routines established in the crisis have permanently changed the ways in which we travel, whether for work or for pleasure (or increasingly for both).

Just a few of the changes coming: larger rooms with well-equipped desks to further entice guests to book longer stays that combine work and leisure; co-working spaces or even dedicated co-working floors; memberships to entice locally based workers to book work-away-from-home stays; airy outdoor spaces. If hotels have their way, the acronym WFH could develop an entirely new meaning.

Business conferences will probably be returning (and already are). Quickie road-warrior trips for singular meetings probably won’t.

These are insights from Adam Patrizia, who we spoke with recently. Patrizia is a veteran hospitality consultant previously worked as head of customer relationship management at André Balazs’ US properties and as chief marketing officer at Hotel Insider. Here are excerpts from our conversation, edited for space and clarity:

How are hotels adapting to changes in how we work, how we travel?

The pandemic sped up what was a natural progression in the hotel industry. There was this movement towards either very large convention and resort-style hotels and very small, experiential lifestyle hotels. The industry was bifurcating to those poles, and in the middle, we started to lose those road warrior, boutique-style hotels that didn't really serve a purpose anymore.

A lot of the shift has been towards creating more thoughtful and private spaces. For instance, instead of having gyms relegated to the basement or as an afterthought, they're moving them into spaces with windows. They're moving fitness within guest rooms. Hotels that are under development are actually increasing the size of the rooms to fit in fitness in-room. They're making a hotel less about eating and sleeping and more about moving around and feeling comfortable for longer.

That's been a real adaptation that the industry has adopted, especially with new builds and retrofits: larger, more spacious accommodations that allow you to work within the room, comfortable desks rather than an afterthought, space to stretch and to actually work out. Extrapolating on that, hotels are also taking rooms out of their inventory and creating workspaces so that if someone wants to work from the hotel, they don't necessarily have to work at the desk in the room or from the restaurant. Business centers are a thing of the past.

Why are business centers a thing of the past? I think of the business centers as where you work outside of your room.

A better way to say it is that there's been an evolution of the business center to be a co-working space. If you need something printed, it's not just a room that you go to grab something from the printer. You're not sitting next to a printer with an antiquated monitor. You're in a beautifully designed co-working space. Younger brands like The Hoxton and Pendry are doing this really well by incorporating those spaces into the lobby and food and beverage areas.

The pandemic also sped up the need for outdoor areas. Everyone thought that the way forward was to enclose guest circulation so that you were kind of a hamster going through all the different venues, with limited outdoor areas—kind of like a Las Vegas model. It's sometimes hard to find outdoor areas in urban spaces specifically, but there's now a real desire and need from the consumer to have even a terrace to work on, windows that open if legal, or a spa with open air—that's the hottest trend right now.  

There's a real movement to incorporate true wellness programs into hotel offerings. The pandemic just sped up a natural progression of what a hotel was evolving into. A hotel has evolved back into being a center of the community instead of these developer bank accounts that go into communities and just try to make money, hand over fist, for whoever owns it. Hotels were originally founded as inns, and they were supposed to introduce travelers to the local community and the local community to the world. That's now an unspoken narrative within the hotel industry: that we want to get back to making people feel protected, welcome, engaged, and at the end, give them a good night's sleep.

You made a reference to people staying longer. Is it because of people adding workdays to their vacations?

We all thought, ‘How great is it to work from home?’ Then all of a sudden, we realized, ‘Wait, it's wonderful to work from home—some of the time.’

Going somewhere is really nice. Hotels are keen to that, and they want people to utilize them to work out of. They want to make it attainable to stay longer and work from hotels. That includes not only special work rates or special work-from-hotel (WFH literally) packages, but also utilizing rooms and areas that weren't normally utilized as workspaces. They're saying that it can really be a wonderful ‘workcation’—you can use the spa and use this trainer while you're here—to try and entice people that way.

How much of this is geared toward local traffic? The ‘I'm just really sick of my house’ guests versus fly-in traffic?

That's a great question, but it's an unknown. Urban hotels in particular are moving towards trying to target locals who don't have offices to get out of their homes and use their hotels as workcations. Then there are fly-ins, whom resorts are very, very heavily targeting. For instance, the Caribbean has a huge program for people to come for months at a time and stay at hotels. Palm Heights, a hotel in Grand Cayman, is an all-suite hotel, and it targets people to stay for a month. It all depends on the type of hotel and who they target, but if I could stay at a hotel for three days once a month and it made sense financially, I would do it. It would be amazing.

How are hotels thinking about conferences? Are they thinking they're going to come back?

Conventions are never going to go anywhere—they just make too much money. Our way of buying, selling, and introducing products is too heavily built foundationally on conventions. The huge hotel, the huge ballrooms, and the huge conference centers will come back. They've already come back. It's all just about doing the necessary scientific requirements and then a little bit of theater to make people feel good.

What won't (return) are those 16-hour business trips, where someone wants you to fly in for a meeting just to meet face-to-face with the rest of the team. Those are gone. No one's doing those anymore. It's a huge cost savings from a business perspective. Hotels that cater to that kind of business are going to suffer and are already suffering. They're trying very hard to shift their business model. To be frank, aren't we all glad those fly-in-for-a-meeting trips are going to be a thing of the past?

As hotels are trying to become co-working spaces, are they considering memberships?

A lot of hotels have created their own membership clubs or levels. This is different from a loyalty level. Some hotels are creating a whole floor for co-working, and they will sell a membership to that. That might afford you the use of the fitness center, a discount on the spa, or discounts on room rates. Some hotels are creating full-fledged membership clubs themselves, like the Rosewood created Carlyle & Co., which launched in Hong Kong and is a unique membership club. Marriott is creating its own membership club. There's a Loews membership club.

Every brand right now is creating a membership club, whether that incorporates sociability, workability, or both remains to be seen, but the point of membership clubs is to make people feel comfortable in the reassurance that they're around like-minded people. It points to the divisiveness of living in our world right now. You don't want to be around divisive people, so people feel comfortable in that way. Membership clubs are a real psychological, philosophical, and social need right now. They're popping up at every economic level.

What Else You Need to Know

The Great Resignation is….probably not over. More than one in three employees who didn’t resign or apply for a new job in the past six months are considering pursuing one in the next year, according to a new Adobe survey.

  • That proportion rises to 1 in 2 for Gen Z.
  • For those who switched, 93% of workers cited increased pay, 90% cited opportunities to learn new skills, and 88% noted access to better benefits.
  • Compensation has in the past ranked lower as a reason for job changes, but rising salaries seemingly make that a bigger factor these days. Those who left their jobs cite such factors as a toxic work environment or a difficult manager as reasons for the change, in a separate Morning Consult study.
  • February was the ninth month in a row that over 4 million US workers quit their jobs.

Were the fears that corporate culture would be damaged by remote work overblown? That’s a conclusion you could draw from a new MIT and Webex by Cisco study.

  • More than 90% of respondents said that working remotely during the pandemic has had a positive impact on corporate culture.
  • Some 56% of Gen Z, 52% of Millennials, 45% of Gen X, and 35% of Baby Boomers said remote and hybrid work models improved feelings of diversity and inclusion.
  • Respondents noted the freedom to express personal opinions improved.

Remote workers make for more paperwork. Even those who work from home just a few days a week trigger compliance obligations in the states in which they work—regardless of the state or states in which their employer is based.

  • A Manhattan-based firm that has staff working from home in Connecticut, New Jersey, and Pennsylvania is now subject to the employment laws of four states.
  • State laws can differ on such issues as training to prevent sexual harassment or entitlements to family and medical leave.
  • Employers could ensure their policy complies with the most stringent requirement of each applicable state. Another option is to make policies that vary by location—which can be a logistical challenge.

Organized labor has been languishing, but there are now signs of real traction. Workers at one of Amazon’s New York warehouses voted to join an upstart labor union—the first at the company, which is the second-largest US employer after Walmart.

  • Amazon had fended off earlier attempts by workers to unionize—and the success of the New York workers is seen as a milestone.
  • Separately, hundreds of employees of publishing company Condé Nast announced the formation of a companywide union.
  • Workers at over 140 Starbucks locations have announced plans to unionize.
  • Organized labor is still at a low point nationally. The portion of workers in US unions dropped last year to 10.3%, the lowest rate in decades.

Washington state joined the pay-transparency movement. Governor Jay Inslee signed into law this week a requirement, effective January, that job ads include a salary or pay range.

Return to workplace speed round:

  • Some junior bankers at Goldman Sachs are reportedly unhappy with the bank's hard-line approach to having workers in the office five days a week. Some Goldman employees are allegedly considering quitting and gripe that their bosses check attendance by tracking when workers swipe into and out of the Goldman offices.
  • The share of employed adults who would like to return to the office as soon as it’s safe to do so declined to 51% in January from 57% a year ago.
  • Google workers complained in a meeting that some employees aren’t allowed to work remotely, according to Business Insider. The New York Post reported that some Apple employees are threatening to quit over the company’s three-day-a-week in-office policy, which is stricter than that of some other tech giants.
  • Vacancy rates in office buildings continue to climb across the country. And the share of office mortgages showing signs of trouble exceeds 21%, the highest since the financial crisis.
  • HP agreed to buy Poly—a maker of phone headsets and other audio and video gear—for $3.3 billion as it aims to profit from shifts to remote and hybrid working.
  • Ford, which is preparing to launch its hybrid work model, created “collaboration centers” at several locations. They contain meditation spaces, video conferencing, sitting areas, an online workspace reservation system, and upgraded dining facilities—all designed to mimic the amenities one might enjoy from a home office.

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Support colleagues’ out-of-work passions. It can boost recruiting and retention when an organization gives employees flexibility, time, and funding for activities outside of work. FullContact, for example, offers staff a $7,500 stipend on top of paid vacation time if they disconnect and do something non-work-related. It also helps to provide opportunities for co-workers to discuss their pursuits.
  • Don’t wear earbuds all day. Doing so can increase the risk of ear infection or even cause ear acne. It also helps to keep your devices clean and not share them with others.
  • Praise a colleague. It makes a difference, especially when the compliment is genuine and comes from a peer. Some organizations provide workers with points—exchangeable for gift cards or other perks—they can use to recognize co-workers.
  • Apply for a job at your company with a fake profile. Being an “undercover applicant” can provide you with valuable information on where your hiring process falls short.

Coda

Traditional etiquette bible Debrett’s has stepped into the breach and issued rules for working at a cafe. Amongst the advice offered by the 253-year-old UK institution: Don’t be a “table-hogger.”

  • “Cafes need turnover to make a profit, so you must not turn into a table-hogger, who nurses a single cup of coffee while other customers come and go,” the guide advises.
  • Another no-no: Never do video calls from cafes. Otherwise you risk looking unprofessional.

Over-achieving finance types are lamenting the shift back to in-person job interviews. Now we learn that some young candidates for finance positions had been taking advantage of virtual recruiting to surreptitiously consult elaborate cheat sheets hidden on and around their computer screens. With the return to in-person recruiting, that gig, alas, is up.

Beware the manager with an MBA. Researchers found that those with graduate or undergraduate business degrees are more likely to cut workers’ wages.

  • Adding insult to injury, their companies “do not enjoy higher output, investment, or employment growth thereafter,” the study concludes.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together.

This briefing was written by Suein Hwang and Kevin Delaney. You can email us at hi@charterworks.com with any feedback or suggestions.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.