Hotels' "Third Space" Becomes New Revenue Growth Driver

In recent years, walking into any mid-to-high-end hotel lobby, one often encounters this scene: even on weekday afternoons, the lounge areas are filled with people—remote workers with laptops and coffee, business partners discussing plans in hushed tones, young adults quietly reading. Many aren't guests but treat these spaces as "offices," "study rooms," or even "community living rooms." These nomadic young professionals are redefining the functional boundaries of hotel spaces, prompting astute hotel groups to incorporate "third space" economics into their core strategies, seeking new growth avenues amid industry-wide pressures.

From "Paying for Lodging" to "Paying for Ambience" "Studying in hotels offers a refined, high-end environment without pressure to leave—the public areas are designed for relaxation," shared a young frequent user of hotel lobbies on social media. With 24/7 access, reliable WiFi, comfortable seating, and complimentary beverages, hotel lobbies are becoming more appealing than coffee shops.

This demand extends beyond lobbies to gyms, pools, and even laundry rooms. On resale platforms and group-buying channels, single-use passes or monthly memberships for premium hotel gyms are highly sought after, allowing consumers to access professional equipment and upscale amenities at a fraction of lodging costs.

A case in point is Ms. Hu, a Gen-Z content creator who finds hotels ideal for work and relaxation. "Beyond accommodation, I can work out, read in the 'Bamboo Library,' enjoy tea, or even do laundry," she says. This escape from routine environments and the "emotional value" derived from such experiences drive her repeat visits—logging nearly 30 nights across ten hotels in just six months.

Non-Room Revenue Shines in Earnings Reports Q3 2025 reports from leaders like Atour Lifestyle Holdings Limited and Huazhu highlight "third space" as a strategic pivot. Atour saw retail revenue surge 76.4% YoY to ¥846 million, now accounting for 32.2% of total revenue, offsetting declines in average daily rates and RevPAR. Its "scenario-based spaces" strategy transformed lobbies into multifunctional hubs blending books, art, and retail, lifting retail's revenue share from 13.8% in 2022 to 30.3% by 2024.

Huazhu maintained steady domestic RevPAR at ¥256, attributed partly to experiential investments like its new "Tea Culture"-themed mid-upscale brand, which reimagines lobbies as "Tea Halls" with dedicated workspaces, enhancing brand premium through immersive settings.

Market data underscores this shift: 73% of young travelers prioritize local cultural elements when booking, while 78% of high-net-worth individuals seek unique cultural experiences, per Hurun reports. Hotels are thus transitioning from standardized stays to curated experiences and emotional engagement.

Future: Segmentation of Third Spaces Competition has moved beyond generic offerings to precision-targeted models. While Atour focuses on "retail-integrated scenarios" and Huazhu on "tea immersion," both share a core logic: consumer-centric, differentiated spaces that synergize non-room and lodging revenues.

Evidence suggests third spaces not only diversify income but redefine brand appeal. Amid industry homogenization, hotels delivering emotional resonance, cultural depth, and multifunctional services are emerging as key differentiators. Looking ahead, deeper localization, tech-driven immersion, and loyalty integrations may further segment this evolving niche.