Hotels don’t just sell rooms. So why do we only optimize rooms?

Hotels are full of space that looks valuable on paper but quietly underperforms in reality. Conference rooms, boardrooms, lounges, libraries, business centres, and VIP areas are often built with good intentions and rarely questioned once they exist. They sit there heated, cooled, cleaned, staffed, depreciated and frequently underutilised.

As a Revenue Management consultant, the uncomfortable truth I see daily is that many of these spaces generate little to no consistent revenue, yet carry very real costs. With room revenue (RevPAR) growth in 2026 showing signs of “peak price resistance,” the real battle for profitability has shifted to the rest of the square footage. We must shift the KPI from RevPAR to RevPAM (Revenue Per Available Square Metre). To calculate it divide the revenue earned by the total area of the space. You can find more ideas on how to measure profitability of your spaces in this Ideas article.

The utilisation problem no one likes to measure

In many hotels, meeting and event spaces are only actively used during peak corporate days or specific seasons. Outside of those moments, utilisation drops dramatically. Industry observations consistently show that smaller conference rooms and boardrooms remain unused for large parts of the week, while business centres and lounges see declining demand due to mobile working.

What’s striking is how rarely hotels measure actual utilisation hours versus theoretical capacity. Revenue is tracked; space usage often isn’t.

• The Insight: Even when a room appears “fully booked” in the system, real usage can be significantly lower.

• The Data: Industry analytics from IDeaS highlight that large function spaces often operate at average utilisation rates of around 40% over a month.

• The Verdict: If a meeting room is available 12 hours a day but booked only 10 to 15 hours per week, that is not an amenity. It is an underperforming asset.

The community-first model: monetizing beyond the guest

The most profitable square meters in 2026 aren’t just for travelers; they are for the five-mile radius around your hotel. By opening your doors to local collaborations, you create a recession-proof revenue stream that doesn’t rely on flight schedules or corporate travel budgets.

High-impact collaboration ideas:

• The wellness studio shift: partner with local yoga or pilates instructors who lack a brick-and-mortar space. Your empty breakfast room at 10:30 am is a perfect, sun-drenched studio. Charge a room rental fee or negotiate a revenue share per attendee.
• Curated workshops: from “sip and sketch” art evenings in the lounge to professional photography workshops in your natural-light suites, these events drive high-margin f&b spend and introduce new demographics to your property.
• Pop-up retail and brand showrooms: offer underutilized lobby corners to local artisans or “dtc” (direct-to-consumer) brands for weekend pop-ups. It adds “soul” to your lobby and generates easy licensing revenue.
• Content creator day passes: market your most aesthetically pleasing meeting rooms or suites as filming locations for podcasters and influencers. High-quality lighting and soundproofing are assets that content creators will pay for by the hour.

Rethinking what these spaces can be

The first profitability shift is mental. These are not fixed hotel features; they are flexible assets. By treating F&B and meeting areas with the same data-driven rigor as rooms, you unlock high-performance engines.

The coworking & fractional pivot

The rise of hybrid work is a structural shift. The global coworking market is projected to reach $30.12 billion in 2026.

• Strategy: Treat lounges or quiet restaurant corners as coworking inventory. By offering “Day-Pass” packages with a desk and coffee credit, you capture a market that doesn’t need an overnight stay.

• Impact: Public room rental revenue has seen a 9.5% growth recently as hotels began selling three-hour “strategy pods” or “content creator suites” instead of waiting for full-day bookings.

F&B: the high-margin “Second Lobby”

Food & Beverage is no longer just a support service. Recent data shows F&B revenue per occupied room increased by 3.8% in 2025, with profit margins climbing to 29.1%.

• Rooftops: These transform “underutilised air” into the highest RevPAM on property. Shift from a static bar to a “Day-to-Night” model: morning wellness/yoga, mid-day outdoor workspaces, and night-time ticketed sessions to maximise RevPASH (Revenue Per Available Seat Hour).

• Restaurants: If a 100-seat restaurant sits 80% empty after breakfast, it is expensive real estate. Leading properties are “right-sizing” by partitioning sections for high-end “Grab-and-Go” concepts or pop-up retail collaborations.

Banquets: moving from volume to value

While traditional convention volume has dipped by 7.3%, banquet food revenue actually rose 4.0%. Guests are moving away from “chicken-or-fish” buffet lines toward curated experiences.

• Strategy: Diversify the portfolio with small-scale “Micro-Weddings” and “Executive Retreats.” These often command a higher profit margin per attendee than massive, discounted corporate conventions.

Should we convert the space entirely?

At some point, the question becomes more radical: does this space still belong in its current form at all? This decision should never be emotional; it should be analytical. Hotels are increasingly asking if conference rooms should become additional guest rooms or if underused VIP areas should be reimagined as exclusive paid experiences.

A simple profitability comparison helps:

1. What is the annual net revenue of the space today?

2. What would it generate if converted into suites or another concept?

3. What is the payback period of conversion?

In many cases, even one or two additional rooms with strong ADR and occupancy will significantly outperform sporadically used meeting space.

Bringing space into Profitability conversations

These conversations are often ignored because spaces are tied to brand promises or legacy decisions. But not questioning them is an expensive choice.

Revenue and finance teams must move beyond rooms. We must track space utilisation, calculate revenue per square metre, and include non-room spaces in every profitability discussion. Profitability is not only about selling more rooms; it is about making better use of everything you already own.

The real question is not whether these spaces could be profitable. It is whether we are willing to question our assumptions and redesign them accordingly.

The hotels that will thrive in 2026 are those that blur the lines between work, play, and community. By turning “dead zones” into “profit hubs,” you don’t just increase your revpam—you become the heartbeat of your neighborhood. Don’t let your square meters stay silent. Make them work as hard as you do.

Link to data and sources that inspired me:

• IDeaS Revenue Solutions: Meetings and Events KPIs and Function Space Utilisation

• HSMAI: Meeting Space Utilisation and Revenue Per Square Metre (RevPAM)

• HSMAI Academy: RevPAM Definition and Glossary

• CBRE Insights (2025/2026): Hotel Food and Beverage – A Bright Spot in 2025

• MySeat: Booked versus Actual Meeting Room Utilisation Analysis

• Research and Markets: Coworking Space Global Market Report 2026

• SiteMinder: Top Hotel Industry Statistics: Guide for 2026