CitizenM targets remote workers with new corporate subscription plan

The lobby at the CitizenM London Shoreditch.
The lobby at the CitizenM London Shoreditch.

Since its launch in 2008 in Amsterdam, CitizenM has done things a bit differently than most of its competitors.

Its rooms are small, about 150 square feet, and much of that space is taken up by a wall-to-wall king-size bed. The rooms also have a large shower and a widescreen TV -- as the company says on its website, "supersized essentials, nothing you don't need."

The idea is that guests will use the room to sleep and refresh, but if they want to work or socialize, they'll head down to the "living room" -- the large ground floor space designed with a mix of cozy corners and open spaces (and free Wi-Fi) for working, relaxing and eating at the 24/7 cafe, CanteenM.

The brand is designed for "mobile citizens" -- hence the name CitizenM -- and since day one it has welcomed anyone to use its lobby for work, initially for free and then starting in early 2019, as popularity grew, for a fee of about $20 per day.

Now, as the Covid-19 pandemic has upended traditional office space and created thousands more "mobile citizens," CitizenM is aiming to become the brand they choose for both work and stays with the offer of a corporate subscription. 

The idea is to give companies a place to convene dispersed workers and to give employees a place to work and a place to stay if they live outside the city but occasionally travel into town, for example to spend a day in their company's office or to have a meeting. 

"We started talking to corporate real estate planners ... to see what companies are planning long-term. And in April it dawned on us that this remote-first strategy is going to stay. Big companies will have a large portion of their workforce work from home, so what consequences does it have for our investment plans, what consequences does it have for our business model?" says Lennert de Jong, chief commercial officer for CitizenM.

"This corporate subscription: It was really a recognition of a need -- a screaming need basically from a lot of people."

For a flat fee of $600 per month, users get three nights in any of the brand's hotels worldwide with no blackout dates, plus breakfast and a welcome drink for each stay, three hours of meeting room use and unlimited use of the "living room" workspace -- 24 hours a day, seven days a week. There's also rooftop space at some properties.

De Jong says the idea of a subscription plan had been in development for some time, but the company knew it would only make sense when it could offer a large enough supply of hotels in cities around the world. That number now stands at more than 20, with many more in development. Combining that with the challenges of the pandemic -- both the new needs of companies and of CitizenM for predictable revenue--made this the appropriate time to launch the offer.

"The opportunity really sits at the moment during Covid times. Pre-Covid this would have been an unattractive deal for us, because we were selling rooms at $300 night in New York so why bundle it and sell it for $600. So this opened up the opportunity to do this," de Jong says.

"Instead of ... a stupid loyalty program when you get a card and start collecting points, why not try to go for something more explicit with this group of people?"

CitizenM is not the first hospitality brand to entice workers to use the hotel as their office, but its model differs from what is being offered by Accor and many independent properties in that it is not focused on the use of the hotel room.

"If you look at a normal hotel, they have more square foot in their bedrooms, but they don't have public space. Public space has always been an enemy of the hotelier, because it's not revenue generating unless it's a restaurant and you usually outsource that. The lobby is really just for you to wait until you are checked in," de Jong says.

"But in most places our lobbies are the largest of any hotel in the city. So we don't need to go to the bedroom."

For now, CitizenM is in the early stages of talking to mostly smaller companies and individual entrepreneurs about the subscription option, and de Jong says feedback has been very positive. Larger companies will be next on the prospect list, which grows as the brand continues to open new hotels around the world.

Next week, CitizenM opens in Washington, D.C., and in the next few years de Jong says the brand will open 18 new hotels across Europe and the United States, including a hotel contracted by Facebook and sitting on its campus in Silicon Valley.

"This [corporate subscription] is a logical consequence of something we started from day one--that we are the company for a very specific target audience," de Jong says.

"There's a lot of space for us to grow in at the moment."

Source: PhocusWire


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