Alternative Options: Higher Education Offers Hoteliers a New Revenue Stream

College campus

In August, STR reported that U.S. hotel occupancy topped 50 percent for the first time since March. That this was a benchmark to celebrate illustrates just how much damage the industry has sustained since the COVID-19 pandemic threw a giant wrench into the global economy. Hoteliers, though, are resourceful and many have responded to this lull in traditional demand by seeking out new revenue streams and occupancy drivers, especially as the summer travel season wanes. One area where they’ve set their sights: higher education.

Even in pre-pandemic times, universities were reliable demand drivers for nearby hotels, serving as a home base for prospective students checking out a campus, visiting parents, and even athletic teams who traveled from rival schools. Now, some properties are working with universities to provide alternate housing options for students. This isn’t a particularly new phenomenon—for years, hotels have partnered with universities to provide student housing when there were dorm room shortages. In 2020, partnering with a university to provide student housing is a way for many properties to guarantee occupancy and revenue when not much else is certain.

Jeff Brainard is the vice president of sales and marketing at Southern Management Corporation, a company that manages two properties near the campus of the University of Maryland: The Hotel at the University of Maryland and the Cambria College Park. Both of these properties are offering student housing for the 2020-2021 school year. “There were a number of reasons we decided to do this, but the main driver was that the university decided to implement single room occupancy, which greatly reduced their on-campus housing availability,” Brainard explains. The Hotel at the University of Maryland and the Cambria College Park are operating under a hybrid model, offering both student housing and rooms for transient guests.

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The Wyndham Pittsburgh University Center is another property that has decided to offer student housing for the 2020-2021 school year—transforming all 251 of its guestrooms into dorm rooms. Coleman Hughes, the hotel’s general manager, says this wasn’t a huge stretch for the property, as it had been hosting students, in addition to transient guests, for a couple of years now. “The University of Pittsburgh’s enrollment has been robust and the school needed more dorm space. So, for the last couple of years, we’ve housed 124 students on two of our guest floors. Due to this pre-existing relationship, it was a natural step to offer up our full inventory during this unprecedented time,” Hughes says.

The deal has been a boon for the Wyndham Pittsburgh University Center. Hughes notes that it improved the property’s forecast and outlook for the rest of 2020 and its forecast and budget planning for Q1 and Q2 of 2021. “In a time in which revenue has been greatly reduced, it provides a healthy stream of revenue into the hotel and helps us continue to move forward,” he says.

Partnering with a university to provide student housing is a way for many properties to guarantee occupancy and revenue when not much else is certain.

One of the biggest benefits, Hughes adds, is that it allowed the hotel to bring back some of the employees that it furloughed at the beginning of the pandemic. “In March, we had to furlough 59 of our 74 team members. Now, we’re bringing 25 of those furloughed team members back. That’s 25 people who are able to come back to work because of this deal.”

Brainard agrees that the ability to maintain staff is a key benefit of offering student housing during this turbulent time. “We want our teams to keep working and be able to support their families. We want our core team here as we work toward industry recovery,” he says.

Brainard also says that hoteliers who may be struggling to maintain their businesses should actively look for opportunities to evolve and take the plunge. “Hosting students is new for us. We haven’t done this type of business at this property before. But that doesn’t mean we can’t.”

Brainard notes that his team talked with the University of Maryland, as well as parents and students, to develop their student housing program. “We had this mindset of, ‘Let’s just go for it and ask questions along the way,’” he describes. “We learned a lot by talking to families about what they were looking for, and we were flexible in creating a program that worked for everyone.”

Hughes also places great value on flexibility in the current hospitality environment. “A key aspect to success when providing student housing is you have to be a good listener and deliver on your guests’ expectations—whether they’re transient travelers or students staying for a full semester. We want to be agile and make sure our offerings mirror what our guests truly want.”

For hoteliers considering converting some of their guestrooms over to student housing, Brainard offers the following advice: “Don’t be scared to make changes. Yes, you’re taking a risk. Yes, you’re doing a different type of business. At the core, though, you’re still taking care of guests, making sure they have a good night’s sleep and a safe and clean place to stay.”


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