Concrete Analysis | Hong Kong’s co-living operators and hotels join forces to give vacant rooms a new lease of life as coronavirus poses existential threat

Some of Hong Kong’s more savvy co-living operators have been turning underused hotel rooms into shared units with longer leases

Some co-living operators in Hong Kong had to slash their monthly rents by up to 50 per cent to fight for tenants amid the drop in occupancy caused by the pandemic

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The Aberdeen by Dash Living. Photo: SCMP Handout

Published: 12:00pm, 27 Jul 2021Updated: 7:37pm, 27 Jul 2021

The Covid-19 pandemic could sound the death knell for the co-living sector, as the concept of communal living, which involves sharing, interacting and building a community, seems to conflict with the prevailing social-distancing measures.

It was reported last year that some co-living operators in Hong Kong had to slash their monthly rents by up to 50 per cent to fight for tenants amid the drop in occupancy, reflecting the difficulties faced by the sector during the coronavirus outbreak. Although some operators were badly affected by the pandemic, others were resilient as they adapted to the new market conditions. To these co-living operators, Covid-19 has not intimidated them, but instead created a window of opportunity to prosper.

The pandemic has given the co-living space operators an opportunity to scale up quickly, collaborating with hotels in new business models to ride out the tourism slump since the coronavirus outbreak. These co-living operators capitalised on the fall in hotel room demand and turned them from underutilised hotel rooms into co-living units with longer leases.

For hotel owners, forming partnerships with co-living brands may help to leverage the latter’s brand reach in the long-term stay segment, thus increasing their sources of revenue and improving rental yields.

For example, Dash Living, a co-living operator in Hong Kong and Singapore, partnered with hotel group Ascott in March to offer monthly leases at their six hotels in Hong Kong and Singapore. At the same time, it collaborated with Ovolo Hotel to transform two en-bloc hotel properties in Aberdeen and Sheung Wan into co-living serviced residences.

On top of the services of traditional hotels, the transformed properties provide common areas, lounges, communal kitchens and other facilities for hotel residents. Another Singapore-based co-living operator, Hmlet, has partnered with 5-star Hotel Icon to manage residential stays at the hotel by launching the “Hmlet x Hotel Icon” room concept.

As the synergy between the hotels and co-living operators gains steam, more such collaborations are expected, with more hotels converting to co-living use, reshaping the hotel and accommodation industry now and in the future.

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.css-1m2rp1p{color:#34b8b5;}Concrete Analysis | Hong Kong’s co-living operators and hotels join forces to give vacant rooms a new lease of life as coronavirus poses existential threat

Concrete Analysis | Hong Kong’s co-living operators and hotels join forces to give vacant rooms a new lease of life as coronavirus poses existential threat