Is remote working a threat to hospitality and retail?

Is remote working a threat to hospitality and retail?

The past year has forced radical changes in the way we live our lives.  

From wearing face masks to remote working, the world we inhabit today scarcely looks the same as it did a year ago.  

With new opportunities to work from almost anywhere, people are starting to question whether life in the city is for them anymore.  

Indeed, research conducted by K3 revealed that 56% of city dwellers are considering foregoing life in the city, with 32% in favour of somewhere more rural, and 24% dreaming of living abroad. 

If these people actioned upon their desires, it could spell disaster for high streets as fewer commuters and increased migration to the suburbs would undoubtedly lead to reduced footfall.  

The office provides people with a routine  

“The pandemic has catalysed a shift towards agile working,” said David Kosky, CEO of Work.Life, a series a co-working spaces across the UK, adding, “people are keen to return to offices for the sense of community, but it’s unlikely that we’ll see the same rigidity around nine to five office jobs.” 

The normalisation of remote working has unquestionably played a part in this shift away from the city.  

“With the change to agile working, some people will be considering taking fewer days in the office. They’ll be able to afford longer commutes to more reasonably priced suburban houses,” said David. 

“That being said, I don’t believe that 56% of people will actually move from the city. 

“There’s no one-size-fits-all for work habits. Some people have really enjoyed working from home this last year. Overall, I think productivity has suffered though. 

The office is key for people because it provides routine and structure, both of which massively help with mental health. 

“Even if people adopt more hybrid working models, there will still be some going back to the office in every business.” 

Of course, as David discusses, there are other factors at play.  

“While I would be surprised if all 56% went ahead and moved, there is one certainty that will result from the pandemic.  

There will be lots of redundancies.” 

In the UK, the government has extended its furlough scheme to help struggling businesses – but it will end at some point. 

“We haven’t really seen the fallout yet because businesses have been supported by government aid. But when there’s mass redundancies in the job market, you tend to see more freelancing.” 

There are financial benefits for companies who embrace freelancers – particularly for those headquartered in cities. Equally, these advantages could be disastrous for city dwellers.  

“Salaries will need to be re-examined,” explained David. “After all, this shift towards remote working could be dangerous for cities.  

Why would you pay an accountant a London salary when someone up North or abroad could do the same job but for cheaper?” 

The danger lies in the fact that people in cities require a higher pay – if they can’t secure a decent salary, they’ll be unable to afford living in a city.  

Naturally, this would cause complications – on both an individual and nationwide level.  

If people couldn’t afford to live there, they’d leave the city. If people left cities, footfall would dwindle, and hospitality would struggle to regain its footing. The knock-on effect would be significant.  

We’re social creatures, we need interaction 

Many people anticipate hybrid working to become the de facto norm post pandemic, but David believes it’s more complicated than that.  

We’re social creatures. We need interaction. We’re not meant to be locked up at home,” he explained.  

“Some will want to and need to go to the office every day while others will want to work from home. Personally, I think there will be more flexibility – but people will still want human interaction and the ability to collaborate in some way.” 

Of course, whether we adopt hybrid working models isn’t just dependent on people – but companies too.  

“From a business’ perspective, it’s a little more complicated. Historically, every person to work for a company had an office desk and space specifically for them.  

“That’s a huge cost for businesses. It always has been. I think we’ll see employers and employees reorganising their offices to make them more agile and to reduce space

“Ultimately, it’s going to depend on a case-by-case basis. Some people might return to working five days a week while others stay at home.” 

It seems all but certain that hybrid working will become the new norm at some point or other. Because of this, David anticipates downsizing to occur across the market once the pandemic is over.  

“Personally, I don’t think people can work from the kitchen table. I think, especially if they’re local to their job, they’ll find a co-working space to inhabit.  

Work is a consumer experience and it’s difficult for businesses to deliver that in their own office, which is why I think they’ll partner with companies like us to provide a really good day-to-day experience for their team.” 

In the short term, fewer days in the office, migration to the suburbs and higher rates of freelance work could be a tough blow for footfall in the city. But David expects that cities will bounce back, as people inevitably seek out a community. 

“I don’t think the role of a city will change. Businesses need a central hub. If they can choose, they’ll pick locations in city centres.  

Their offices may be smaller and the workforce might be more flexible, but unless they have a reason to not be there, they’ll choose the city centre.” 

Indeed, recent research conducted by KMPG found that only 17% of business executives plan to ditch their offices, compared to a staggering 69% from August last year.  

It seems clear now, that with an end to the pandemic in sight, firms are planning for a return to the office, which itself indicates that people are once again becoming infatuated with the city.