Renting out hotel rooms by the hour can have a, shall we say, unsavory ring to it. But how about by the workday and for perfectly legitimate uses, like a very temporary office?
That’s the thrust of a recent article in the very respectable Wall Street Journal [subscription required] that delved into how major operators such as Marriott International (NASDAQ: MAR), Hilton Worldwide Holdings (NYSE: HLT), and Hyatt Hotels (NYSE: H) are experimenting with offering day use to office workers bored with working from home and willing to pay for the privilege of working in a nice room while the kids use the pool or beach.
The WSJ said some hotels are promoting day rates, while others are offering longer-term stays and package deals from families. Marriott is offering the stay-for-the-day option through its loyalty program and to corporate partners interested in offering it to their own employees as a perk.
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It’s a way to fill empty hotel rooms, for sure, and the hospitality industry needs the bump as much as any segment in this pandemic-plagued economy.
An industry on the brink as vaccination season approaches
The numbers are bleak. For instance, the 17 real estate investment trusts (REITs) in the lodging segment tracked by Nareit posted a year-to-date total return of -50.33% as of Nov. 23.
And from the lender perspective, Trepp just reported nearly 20% of the more than 3,100 commercial mortgage-backed securities (CMBS) loans backed by hotel properties across the country are delinquent.
Perhaps even more stark: The American Hotel & Lodging Association said a survey of more than 1,200 members conducted in mid-November found that 71% won’t make it another six months without further federal assistance, and more than a third will be facing bankruptcy or forced to sell by the end of 2020. As of this writing, that’s in less than six weeks.