COVID-19 accelerated a permanent merger of work and vacation into a “workcation.” But where are all those travelers going to stay?
That’s what John Tarantino wondered after he left his 9-to-5 job in Manhattan. Tarantino, who founded a boutique boutique watchmaking business in New York, had spent time in Buenos Aires, Mexico City, New York and Miami. But by the end of last year, he’d grown weary of making new reservations at a different vacation rental every month and figured there had to be a better way.
There is. The fast-growing market for long-term accommodations picked up speed during the pandemic, as offices closed and more Americans like Tarantino began working remotely. The options range from innovative new companies that offer housing as a subscription to traditional rental platforms and hotels adjusting their products for the workcation crowd.
More travelers want long-term lodging options
No one knows how pervasive this trend is yet, according to Sunkee Lee, an assistant professor of organizational theory and strategy at Carnegie Mellon University’s Tepper School of Business. “But I definitely see more and more people taking on these options of working from a vacation spot for two or more weeks due to the pandemic,” he adds.
The average length of a hotel stay rose 35% to 4.4 days between 2018 and 2019, according to travel-data company RateGain. And the trend accelerated in 2020, with the average stay now at 5.2 days.
“This seems to be driven by increased road travel within a few hundred miles of residence as well as the flexibility of working from anywhere for certain segments of the population,” says Chinmai Sharma, president of RateGain.
Tarantino’s solution was Oasis Collections, which offers a portfolio of rentals in 18 cities. The list currently includes five U.S. cities (Austin, Dallas, Denver, Houston and the company’s home base of Miami) as well as international destinations like Buenos Aires, Rome and Paris. It just introduced a product called Passport that allowed him to subscribe to its apartments in either three- or six-month increments. For $1,550 per month, the starting price for the one-bedroom category on the six-month plan, he can choose from 500 of Oasis’ 2,000 apartments around the world.
“With many companies moving to partially remote work structures or eliminating office space, the necessity to live close to a designated office will disappear,” predicts Parker Stanberry, Oasis Collections’ founder.
But there’s a dizzying array of choices for people who want to stay somewhere longer than two weeks, which is the industry definition of a long-term stay.
Subscription services
Another company, citizenM, also offers a subscription service for digital nomads, freelancers and adventurers who “love big-city life, but not big-city rent prices.” Its new Global Passport lets you pay a flat rate of $1,500 for 29 consecutive nights, though additional charges such as tourist taxes may apply and will be added where applicable).
The minimum stay at any one location is 7 nights, and the maximum is 29. CitizenM has 21 hotels in 14 cities, including Boston, Seattle, Washington D.C., Zurich and Geneva. The company has capped its Global Passport membership at 1,000, and demand has been strong.
“The pandemic has accelerated changes in lifestyle and real estate,” says Lennert de Jong, citizenM’s chief commercial officer. “Adapting means new hotels serving the new realities of remote and hybrid work.”
Club memberships
Inspirato, a luxury travel service, uses a travel club variation on the subscription model. The Inspirato Pass, launched late last summer offers access to the company’s vacation homes and hotels for stays of 2 to 60 days.
It also offers a range of trips, such as safaris and cruises. Demand for its $2,500-per-month club memberships has been brisk, according to Brent Handler, Inspirato’s founder and CEO. “Booking activity is 30% higher than the same time last year – especially going into summer 2021,” he says.
Co-working accommodations
Selina, one of the most established players, has a network of 80 properties in Europe, Latin America, and the United States. Its “target customers are young digital nomads. In late 2020, Selina introduced a program that allows subscribers to use any of its spaces for $400 per month. More than half of its rooms are now subscription-based.
A subscription includes accommodations, coworking spaces, daily wellness activities, weekly laundry and meal discounts. Sales of Selina’s 30-day subscription products have risen 300% in the last four months, according to Rafael Museri, the company’s CEO.
Vacation rentals
Airbnb and Vrbo remain reliable options, too, with many owners offering deep discounts – sometimes as much as 40% off the weekly rate – for customers who book by the month. Airbnb has a section on its site where you can find rentals offering monthly rates. And in February, Vrbo added a filter for properties that offer weekly and monthly discounts. Demand for these long-term rentals is up.
“Guests have had more flexibility in their schedules to travel in the middle of the week, stay longer or travel during off-season when prices can be lower,” says Vrbo spokeswoman Alison Kwong.
Monthly stays on the rise: As work and school can be done from anywhere, Airbnb sees more monthly stays
Travel advisors
Travel consultants have also seen an uptick in demand for long-term stays, and some have launched programs to meet that need. Last year, Embark Brokerage, a division of the New York travel agency EMBARK Beyond, began offering accommodations for clients who want to stay in a destination for more than a month at a time.
Most of its customers are booking rental homes in Miami right now, “although we have been getting requests for Texas and the Carolinas as well,” says Julie Danziger, Embark’s managing partner. Prices range from $50,000 a month for a three-bedroom hotel suite to $150,000 for a private home in Palm Beach, Florida.
Timeshares
Wyndham Destinations, which operates 230 timeshare resorts, reported an almost 10% increase in the length of stay across club properties in 2020 compared to the previous year. The company is embracing workcations in a significant way.
“People continue to seek an escape, but they’re packing their bags for more than a quick weekend,” says Wyndham Destination’s chief brand officer, Noah Brodsky.
Wyndham will change its name to Travel + Leisure Co. this spring and plans to start offering more subscription-based travel benefits. The idea of subscribing to a travel service instead of owning a timeshare could gain traction in a market where travelers are wary of a long-term commitment.
Hotels
Not to be left out, hotels are also trying to attract workcationers. This winter, for example, the Hilton Sandestin Beach Golf Resort & Spa in Florida’s Panhandle offered a program called Home at Hilton for stays through the end of February. It’s a work-from-hotel program catering to guests who want to stay at the beach during the cold months. Prices were significantly lower than regular hotel rates. A 14-day “Change of Scenery” offered 30% off the published nightly rate ($130), and a one-month package averaged about $90 a night.
“Every year, we typically offer a snowbird program to retirees who want to escape the cold weather and camp out in Florida for the winter months,” says the resort’s general manager, Gary Brielmayer. “This year, we saw an opportunity to expand that program and offer extended stays to any individual who’s working from home or engaging in remote learning.” Within a month, Hilton Sandestin had over 300 room nights booked as part of the Home at Hilton promotion.
Even hotels without formal extended-stay programs are seeing some guests stay longer. For example, the Milestone Hotel and Residences in London just had a guest stay for a month during the holidays – and then return for another visit. The Milestone is different from other city hotels because it offers residences with full kitchens and a little extra living space. “Our guests have really appreciated the additional home comforts that the residences offer over traditional hotel rooms,” says Andrew Pike, the hotel’s general manager.
Taken together, these new options promise to redefine more than the hotel and vacation rental industry. They’re also challenging our basic assumptions about what constitutes a home. In the future, more of us may live where we vacation – and vacation where we live.
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