A Good Day's SleepBy Joe Sharkey
Corporate travelers need more options for staying productive on the road. Are day-rate hotels the future?
Most business travelers know a version of this: You arrive at Heathrow around 7:30 in the morning and slog through customs. When you finally get to your hotel, exhausted, you’re told politely that your room won’t be available till 3 p.m. And off you go, disconsolately killing hours trudging around London with all the other weary lost souls who have also just spilled off all those all-night transatlantic red-eyes.
One time, I thought I was clever and found my way to the second-floor ballroom of the London hotel where I would be staying, figuring that I could find a quiet place to doze for an hour or two. After I settled onto a couch in the dim expanse, I heard breathing and snoring through the darkness that indicated I wasn’t the only one desperately catching up on sleep. I had no sooner nodded off when along came a hotel security guard who rudely snapped on the ballroom lights and hollered that we all needed to clear out. As I skulked away with the other miscreants, the term “bum’s rush” came to mind.
In the United States, hotels – especially mid-level hotel brands popular with everyday business travelers – generally have been easygoing on check-in times, and across the board some hotels at the higher levels have been introducing more check-in flexibility, aware that guests increasingly arrive from all over the world on schedules that don’t fit the good old in-at-3 p.m., out-at-11 a.m. pattern. Fierce competition from Airbnb has also put pressure on hotels at all levels, in the U.S. and abroad, to adjust their housekeeping and other once-ironclad routines to become more user-friendly, as it were.
With strong global growth in both leisure and business travel since the recession, the hotel industry has rebounded and is booming globally. Revenues are generally robust, but competition is fierce, a fact that gives corporate travel managers some added clout in negotiating rates. On the other hand, hotel occupancy rates are surprisingly low. Through October of 2018, U.S. hotels on average sold only 67.8 percent of available rooms, according to the industry data-analysis firm STR. The comparable average for all of Europe was 73.4 percent; for the Asia-Pacific region, 70.6 percent, and for the Middle East, 63.7 percent.
Over the years, the third-party booking companies like Orbitz, Expedia, Hotels.com and many others have crafted a business offering some discounts and designing package deals to mop up some of the unsold inventory. And while occupancy rates in big cities can skyrocket during major sports events and conventions and in prime travel seasons (well over 90 percent of the available rooms in Manhattan are occupied in summer and during Christmas season, for example), the fact is that on any given day, a large number of hotel rooms here and abroad are just sitting empty.
So some hotels and booking-technology entrepreneurs have found opportunity in matching excess supply to what they perceive as growing demand for hotel rooms that can be booked not by the night, but in hourly daytime increments. With more international leisure travel and scattered airline arrival schedules from all over the world, and with a big influx of Millennial and Gen Z business travelers who are outgrowing the questionable ambiance in, say, a Starbucks, the idea of renting a hotel room just for a few hours during the day has appeal.
In 2010, a company called Dayuse.com began signing up hotels in Europe willing to partner on selling rooms in daytime increments, and now claims thousands of hotel options in about two dozen countries, including a few major cities in the United States. Another company, HotelsByDay, has been focusing on the U.S. market, having now signed up 700 hotels that agree to sell available rooms for use during the day at rates that are typically 60 percent off the cost of a standard all-night booking.
There are many reasons cited by business travelers for booking a hotel room for a few hours during daytime (keeping in mind that the Old School reason, arranging an afternoon tryst, generally required an Old School payment for the entire night). One is the tangle presented by complicated flight schedules and delays dumping travelers into long layovers that might be filled more productively by avoiding overcrowded airline lounges and leaving the airport for a private space to freshen up, work or use the spa or gym in a hotel. Another is the (to me, unfortunate) growth in business trips that begin at dawn and end after dinner with the expectation that the traveler will not stay the night. That is a very grueling day, especially if you do not have a base.
“Between meetings, it can be tough to figure out a place to go and catch up on emails or freshen up before a client dinner,” said Yannis Moati, a former tour operator and travel agent who co-founded HotelsByDay in 2015 and has been gradually expanding the company’s profile and market each. The revenue avenue, he said, is those empty hotel rooms that remain after hotels have exhausted all of the traditional booking options.
“We are the last mile for hotels to sell rooms,” he said.
Moati added that about a third of the HotelsByDay market is those seeking refuge from red-eye flights and long layovers. Another big chunk is to have a place for business meetings, and to freshen up for meetings and social events. Leisure travel and so called “daycations” are about a quarter of the market. About 10 percent is just for taking a plain old nap.
Napping is a business already established at some airports, of course. In 2009, a company called Minute Suites staked out some terminal retail space when it began offering “nap facility” rooms equipped with daybeds and TVs at the Atlanta airport. Besides Atlanta, Minute Suites operates in the Dallas-Fort airport, Philadelphia and Charlotte, and says it plans to open new locations in Atlanta, Charlotte and several other airports next year.
A few years ago, on a long layover, I tried out Minute Suites at the Philadelphia airport. It was cozy, quiet, private and clean, but I do have to say that I felt a bit like a taxicab passenger anxiously watching the meter as I tried to doze. The rates are $42 an hour, and $10.50 for each additional 15 minutes.
Here and there in foreign airports there are some other private nap-by-the-hour options such as GoSleep pods in some European and a few Asian terminals and the Snooze Cubes at the Dubai airport, where igloo-like nooks cost $21 an hour (plus tax; minimum two-hour stay). In addition, Yotel, the hotel company specializing in compact rooms, has opened private “cabins” with beds and TVs at some international airports. For example, the rate from 9 a.m. to 1 p.m. for a standard little single-bed Yotel “cabin” at London Heathrow for mid-December was $50.80
How do company managers weighing the expense accounts of traveling employees evaluate the costs of a sleeping pod or even a day-rate hotel room? I’d like to hear from you on this question. My own opinion is that if a valued employee on the road feels the need to insert herself like a frozen pizza into a tiny cavern to grab some shut-eye, or rent a hotel room at a greatly reduced rate for daytime business use, that’s might well be a legitimate expense.
Mr. Moati, who has promoted his business on Shark Tank, the reality TV series featuring entrepreneurs pitching proposals to putative investors, is not coy about the fact that hotel rooms have for a very long time been culturally known for being places to arrange daytime trysts, though traditionally that requires booking the room for the entire night. He says such uses are a small fraction of the market, hard to quantify, as adulterers tend to be discreet. “We don’t have an exact figure on that,” he said.
Memo Pad – Holiday travel means extra time at airport security as passengers tote wrapped gifts and food items that can raise a red flag, and cause a delay, at airport security checkpoints. In general, says the Transportation Security Agency, if the food item in your carry-on bag is a solid like a ham, a cake, a pie or cookies, you can pack it. If it’s spreadable, pourable or sprayable, then it must be 3.4 liquid ounces or less or it needs to go into a checked bag. Christmas gift snow globes are a perennial issue. If you’re packing one in a carry-on, it can’t contain more than 3.4 liquid ounces. “If it is smaller than a tennis ball, it is probably 3.4 ounces or less,” the TSA assures us. Tennis balls themselves are okay.
Inbound international travel growth was sluggish in the second half of 2018 and will continue to be so through at least next April, according to the U.S. Travel Association’s latest Travel Trends Index. “Weakening global economic conditions combined with rising trade tensions and a strengthening dollar will continue to spell trouble for the international segment,” says David Huether, the vice president for research. However, he said, domestic travel overall is projected to grow, with business travel leading the way.
Hotels remain stubborn on negotiating with corporate meetings planners over those proliferating “resort fees.” An American Express Meeting & Events survey showed that hotels are most willing to negotiate amenities-upgrades, room rates and food and beverage upgrades, but least willing to negotiate discounts for resort fees, which many hotels that are not actually resorts have renamed “destination fees.” This year, hotels in the U.S. are expected to rack up a record of more than $2.7 billion in such fees.
Gender views: Opinions on which cities are more beautiful differ can depend on gender, says a new survey of about 25 world travel-destination cities by CitiesBeautiful.org . Women more often cited Prague, Budapest, Sydney and Vancouver; men preferred Chicago, Athens, Hong Kong and Fez, Morocco. But everybody agreed on San Francisco.