Why the staycation boom is exactly what hotels need

City hotels are looking to locals during the lull in travelling further from home

August 10, 2020

Photo by ROSLAN RAHMAN/AFP via Getty Images

The Singapore government last month reopened hotels for residents booking so-called staycations. It didn’t take long for locals to fully book out weekends.

The hunger for a vacation is palpable the world over after months of lockdown. But amid travel restrictions, and general public wariness around safety, staying in a hotel close to home – and in many cases the same city – is on the rise from the U.S. to Britain.

It has been a boon for hoteliers facing swathes of empty rooms.

“City hotels are all going after the staycation market,” says Sashi Rajan, senior vice president of advisory, JLL Hotels and Hospitality Asia. “Even though the quantum from staycations is by no means near to what hotels used to make pre-COVID, it is better than having empty rooms.”

The rush to book Singapore hotels was boosted by two long weekends in July and August. Hotels in Hong Kong have devised packages, such as champagne and whisky themed stays, to woo domestic guests.

In the UK, when holidaying at home restrictions were lifted in June, one staycation was booked every 11 seconds.

“During lockdowns, there was limited options for hotels to make any revenue from its rooms unless it was serving as a government-supported quarantine quarter,” says Rajan. “But more importantly, accepting staycations is a big morale booster for everyone in the hotel business to see and serve guests again. It gives them a renewed sense of purpose.”

Bigger domestic versus smaller markets

The staycation is especially crucial for gateway destinations like Singapore that serve as an entry point and economic hub for a region or country. The chief executive for hotel group Accor’s Asia Pacific business said in an interview with Bloomberg that “unless we have a return to international business, the hotel industry is going to be decimated as up to 90 per cent of our bookings (in Singapore) come from international travellers.” A Hong Kong lawmaker representing the tourism industry put it more starkly: “tourists are virtually zero.”

It is a different picture in other territories, especially those with large domestic markets to support the hospitality sector. For instance in Australia, regional properties outside cities are seeing a healthy spike in staycations as locals prefer to take a drive out for a change of scenery.

Rajan says what hotels in smaller markets can do is to increase its experiential factor.

“Beyond attractive discounts or bundled meals, I think what holiday-makers want is new experiences,” he says. “This is a time for hotels to get creative, test out different engaging concepts and value-add to their guests.”

For instance, hotels could collaborate with businesses or restaurants in their neighborhoods, or gear offerings towards different demographics such as couples and families.

More than a weekend stay

Another way hotels in gateway cities are maximizing the staycation demand is looking beyond a weekend stays. Previously staycations used to be a one or two-night affair, but with many cities still enforcing working-from-home policies, a longer hotel getaway can be possible.

In India, hotels have been offering “workcations,” which combine the ability to work in a comfortable hotel room with perks from gourmet meals to sight-seeing. Luxury properties such as JW Mariott in Mumbai and Conrad in Bengaluru are dangling workcation packages for professionals to check in for four to seven nights.

Hyatt Place in India, for instance, promises remote printing from anywhere in the hotel as well as round-the-clock access to its business centre on top of free Wi-Fi and room service meals.

Japan has similarly caught on to the workcation idea, with the government throwing its weight behind it. Its environment ministry is giving financial support to hotels located in natural environments to improve their telecommunications infrastructure as a way of enticing Japanese workers to base themselves in these places.

“Hotels have been receiving calls from guests asking if they have a room free for the day and the next thing they know, the guests are checking in immediately because they need a change of environment instead of working from home,” says Rajan. “This is also an opportunity for hotels to stretch out the staycation beyond the weekend, since it is here to stay for now.”