layout – The OM Blog by Heizer, Render, & Munson

OM Podcast #48: Cold Storage, AI, and the Future of Industrial Facilities

In this episode of the Podcast, Professors Barry Render and Misty Blessley sit down with David Aschenbrand, Executive Managing Director at Newmark, to explore how cold storage and temperature‑controlled facilities are evolving in today’s operations and supply chain environment. Drawing on his background across logistics, transportation, warehousing, and industrial real estate, David explains how cold storage facilities support food, pharmaceutical, and other temperature‑sensitive supply chains, and what clients look for when developing or operating these specialized buildings.

The conversation highlights how facility design decisions—such as location, building footprint, dock configuration, and proximity to ports—can directly affect labor availability, transportation efficiency, and long‑term operational performance. David shares insights on the growing role of automation and AI in industrial facilities, while emphasizing the continued importance of skilled trades and hands‑on roles that support these operations.

The episode concludes with a discussion of what rising labor costs mean for cold storage operators. Together, the hosts and guest offer a practical look at how operations management, facility design, workforce trends, and technology intersect in modern cold chain and warehouse environments.

Heizer Render Munson OM Podcast · OM Podcast #48: Cold Storage, AI, and the Future of Industrial Facilities

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Prof. Misty Blessley

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OM in the News: The Changing Layout Landscape at McDonald’s

We open Chapter 9 (Layout Strategies) in our text with a Global Company Profile featuring McDonald’s and its continuous changes to achieve competitive advantage through innovative layout. Its most recent model a few years ago was an unprecedented redesign of the layout of all 30,000 stores to create a contemporary dining area (at an average renovation cost of $300,000-$400,000 per outlet).

McDonald’s last major layout change gave a fresh dining room appearance.

But Americans are eating their burgers, fries and nuggets at home, in their cars and at the office—increasingly anywhere but at the fast-food restaurants themselves. At McDonald’s and Burger King, booths are often empty. Customers pick up their orders and head out. People sitting at tables sometimes are workers on their breaks. Dine-in customers now represent less than 10% of visits in most U.S. McDonald’s restaurants, compared with around a quarter of domestic sales before the Covid pandemic, reports The Wall Street Journal (Aug. 8, 2023).

The pandemic accelerated a shift toward to-go that was already under way. Owners serving the bulk of their orders to-go found that they were more profitable and efficient to run, needing less maintenance work and staff. (It is often cheaper and less labor-intensive to pack food into bags to be eaten elsewhere than keep a dining room clean).

Some franchisees say the fast-food business is permanently shifting toward drive-through, delivery and to-go orders. They started speeding up investments in drive-throughs and online ordering. McDonald’s and other chains are developing new restaurants centered around drive-throughs and carryout, with very little or no dine-in option. “You don’t necessarily need the big dining rooms that you needed in our traditional restaurants,” said McDonald’s CEO last month.

A number of U.S. McDonald’s operators in 2018 formed an independent group to help advocate for franchisees’ interests. The group has pushed back at the burger chain on some of the remodeling requirements. U.S. franchisees are expected to freshen up their dining rooms, front counters and bathrooms with approved designs every 10 years.

Classroom discussion questions:

Why are most fast-food restaurants reluctant to give up on the dining room?
What will be the design of the next generation McDonald’s?

Video Tip: Feeding Delta Airlines’ Passengers

Airlines know passengers aren’t picking flights because they prefer one carrier’s short rib to a rival’s ravioli. And most coach passengers on domestic flights still have to pay if they want more than a small snack, although complimentary meals are available on a handful of the longest cross-country flights.

But food is a key part of the passenger experience, and airlines have been making investments in recent years. That includes partnering with outside chefs, offering more choices and mining data on passengers’ likes and dislikes.

Even with changes, don’t expect Michelin to start awarding stars. Feeding customers at 35,000 feet brings challenges terrestrial restaurants don’t have to deal with.

Dishes need to hold up after being chilled and reheated in flight. Flight attendants, who handle final food prep, are busy and are not chefs. And even gourmet food suffers in flight, where low air pressure and dry air dull flavors.

But let’s take an inside look at how Delta Airlines uses operations management processes to make it work. In this 4 and 1/2-minute video click here we can watch the story as told by The Wall Street Journal on March 31, 2023. We see that at Delta’s largest kitchen facility at its hub in Atlanta, teams must cook, package and transport 3,200 meals a day for the airline’s first-class passengers.

Today’s airline meals, of course, do not compare to the 1950s and 1960s, which was dubbed the “golden age of air travel,” when multi-course meals and alcohol were served on board to economy fliers, as we see in the photo.

Classroom discussion questions:

What technology is Delta employing?
How does it handle scheduling for delivery to flites?
What is the facility’s layout?

OM in the News: The Fast Food Revolution

McDonald’s has a new Texas restaurant with no tables or seats or bathrooms for customers and a conveyor belt that routes food to drivers who order ahead. Chipotle also offers no place for customers to sit inside an Ohio restaurant that only takes digital orders. Taco Bell is evaluating a new design that features 4 drive-through lanes, double the typical two. Starbucks, which long described itself as a “third place” for customers to gather after home and work, plans to add 400 U.S. stores with only delivery or pickup service in the next 3 years.

Taco Bell is testing a 4-lane drive through in Minnesota

America’s biggest restaurant companies made a bet during the pandemic that you would rather eat the food cooked on their premises someplace else. Now they are gambling you will want to do so for years to come. The strategy from these giant chains is to orient their operations around drive-throughs and online ordering while testing new restaurant concepts that only serve food to go, reports The Wall Street Journal (Jan.28-29, 2023). They say these designs will make them more profitable and efficient since restaurants that bring fewer customers inside cost less to build, maintain and staff.

Of all orders placed at U.S. fast-food restaurants in 2022, 85% were taken to go. That is down from a high of 90% during 2020 but up from 76% prepandemic. Among full-service restaurants, 33% of orders were to go in 2022— double prepandemic rates.

The concept of taking food and beverages to go took root in the years after World War II, as Americans embraced an automobile culture. In the 1970s the industry fully bought into the to-go idea. Wendy’s introduced its “pick-up” window in 1970, with the first McDonald’s drive-through in 1975. (90% of McDonald’s business is now drive-through).

The most distinctive feature of the new McDonald’s in Texas is an automated delivery system for customers who order ahead on an app. When you pull up to the window in the “order ahead” lane, a conveyor delivers your food with help from a robotic arm that pushes the bag out to the waiting car. Starbucks’ CEO has acknowledged its cafes now are often clogged with pick-up, drive-through, delivery and cafe orders all at once. The result: long lines and frustrated customers. His plan is 700 more U.S. stores in the next 3 years with drive-throughs as the primary means of sales.

Classroom discussion questions:

What operations issues will management face with this revised concept?
What dangers are there in making such changes? Consider a SWOT analysis as in Chapter 2.

OM in the News: Improving Productivity at Starbucks

A barista prepares a drink at the lab inside Starbucks HQ.

In Starbucks headquarters lies a technology lab that is plotting the firm’s renewal. That includes rethinking the onerous path its baristas must take to make a Frappuccino. Inside the massive space, baristas working in a mock-up of a cafe walked back and forth between refrigerators, blenders and syrups to make a single blended coffee topped with cold foam and caramel drizzle. They asked if the company could build kitchens that bring the equipment closer together (see the topic of layout in Chapter 9) and make syrup pumps, milk dispensers and ice bins that work better.

“Starbucks, the chain that made espresso ubiquitous, now faces daily crises in dispensing it,” writes The Wall Street Journal (Sept. 1, 2022). U.S. stores designed a decade ago struggle to meet today’s consumer demand. Cafes that once averaged 1,200 orders a day are now asked to make 1,500. Workers have been pressing for better pay, staffing levels and hours. Turnover has shot up. One in 4 baristas are quitting their jobs within 90 days, up from 1 in 10 previously.

So Starbucks also has been testing how to overhaul operations to improve the experience for both employees and customers. If employees spend less time running around fetching foam and carrying 20-pound buckets of ice, maybe they will be happier working there.

As Starbucks expanded, so did its menu (see Chapter 5). It started serving Frappuccinos in 1995, and pumpkin spice latte and other flavors followed. Warm sandwiches came in 2003. It introduced cold brew and draft nitro coffee in the 2010s. In 2015, the company launched an app that allowed customers to pay for their drinks ahead of time and to customize their coffee orders in 170,000 ways!

The firm expects workers to deliver handcrafted beverages fast. A store clipboard, used to track workers’ drive-through delivery times, said “Expectations: Under 50 Seconds.” But stores are heavily restricted by design and need a remodel to cope. Starbucks has upgraded equipment periodically, including adding espresso machines that can pull 3 shots for complex orders, rather than 2. It conducted motion studies (our topic in Chapter 10) to measure how long it took baristas to walk across the floor to pump extra syrup, among other tasks.

Engineers mocked up designs for the cafe prep area, producing prototypes with 3-D printers. Technicians studied milk dispensers, ice machines and the size of dispensers for strawberries. “Every second matters with customers waiting,” says the new CEO.

Classroom discussion questions:

What do you think Starbucks can do to improve productivity? (See Chapter 1)
What can they do to lower turnover?

OM in the News: The Pandemic and the Drive-Through

The pandemic is sparking a boom in an often-overlooked type of property, the drive-through, reports The Wall Street Journal (March 3, 2021). Food halls and restaurants have taken a big hit from frequent limits on seating capacity during the Covid-19 crisis. But chains such as Chick-fil-A, McDonald’s, and Checkers & Rally’s said they are enjoying a sales uptick at stores with drive-through lanes, which have become more popular during the pandemic. As we discuss in the Chapter 9’s Global Company Profile on layout at McDonald’s (pages 368-9), drive-throughs have been ubiquitous since the 1970s. Now they are critical. “You can pull up in your car and stay socially distant,” said one industry CEO.

Even restaurant chains that have never offered drive-through options are rolling out lanes. Shake Shack is building its first drive-through this year in Orlando. Some restaurant chains that already rely on drive-throughs are bulking up with even grander versions, in part to help meet a rise in digital orders. Burger King unveiled plans for future restaurants designed with triple drive-through lanes. One of the lanes would be reserved for customers who order online.

Many Checkers & Rally’s restaurants feature double drive-through lanes.

Chipotle Mexican Grill Inc. is expanding a similar strategy. The company plans to add 200 locations this year, with many offering customers the option to pick up digital orders via drive-throughs the company calls Chipotlanes. Starbucks just said that it expects to open about 800 stores annually, particularly in suburban locations with drive-through lanes. The company added that stores with these lanes drove half of net sales last year, up more than 10% from pre-pandemic levels.

Classroom discussion questions:

Is building a 3 lane drive-through the right long-term decision?
What location issues (Ch. 8) must be considered in adding this layout to a restaurant?

OM in the News: Toyota Remakes Its Biggest Plant

Toyota’s largest plant in the world sits on 1,300 acres in rural Kentucky. With floor space equal to 170 football fields, the Georgetown factory houses more than 2,000 industrial robots, 6 cafeterias, and 2 paint shops. Its newest order of business has been to add the gas-electric hybrid version of the popular RAV-4 SUV to one of the plant’s three assembly lines, writes Businessweek (Oct. 7, 2019).

Georgetown is fighting to hold on to its status as Toyota’s biggest plant as demand for its sedans has plummeted and the 3-decade-old factory deals with high fixed costs, falling productivity, and the rise of a network of sibling plants in North America churning out more popular crossovers, SUVs, and trucks. When the factory opened, it was designed to assemble hundreds of thousands of mass-market vehicles, such as the midsize Camry. For 27 years that was Toyota’s bestselling car in America.

An AGV rolls down the Camry assembly line.

The Georgetown plant’s output peaked at 514,590 vehicles in 2007, just before the Great Recession. Americans’ appetite for sedans didn’t keep pace with a recovery in auto demand over the past decade. In 2018, Georgetown’s production totaled 430,224 cars, a sign of rapidly changing auto tastes. That meant investing $238 million more in Kentucky to add the RAV4 hybrid, bringing Toyota’s total investment in the plant to $7 billion.

Georgetown’s ebbing fortunes have increased pressure to cut costs and boost efficiency: it is now less expensive to build a Camry in Japan and ship it to Kentucky than to manufacture one locally. Kentucky is installing advanced flaw-detecting cameras, self-driving supply carts, and systems for sequencing component delivery so fewer parts need to be stored on the factory floor. That will require fewer workers doing manual tasks and will boost efficiency in line with newer factories. Toyota also is reconfiguring equipment to match its most flexible factories in Japan, which make a half-dozen different models on the same assembly line. So one of the big things that is changing is the plant layout.

Classroom discussion questions:

Why is plant capacity a vital issue here?
What changes have negatively impacted the plant’s success?

OM in the News: The Shopping Mall With No Stores

At Fairlane Town Center in Dearborn, Mich., Ford converted a former 240,000 sq. ft. Lord & Taylor department store into a workspace for almost 2,000 engineering and purchasing staff.

As retailers close bricks-and-mortar stores at an accelerating pace, shopping-center landlords are facing a vexing question: What to do with all this empty space? “Their solutions,” writes The Wall Street Journal (June 12, 2017), “are varied but all have a common element: reducing, or even eliminating, retail from the equation.”

Some landlords plug empty spaces with churches, for-profit schools and random enterprises while they figure out a long-term plan. Others see a future in mixed-use real estate, converting malls into streetscapes with restaurants, offices and housing. And some are razing properties altogether and turning them into entertainment or industrial parks.

A construction binge in the 1980s and ’90s left the U.S. oversaturated with malls. Growth in online sales and declining demand for full-priced goods are causing retailers to shrink their store fleets and divert resources to e-commerce platforms.

More than 8,600 stores are expected to close this year. Analysts predict that 400 or so of the 1,100 malls in the U.S. will close in the coming years.

One strategy is to convert enclosed malls into open-air properties that landlords call “lifestyle centers,” with apartments, theaters, grocery stores, medical offices and other conveniences—and much less retail.

Classroom discussion questions:

Are malls easily convertible to an office layout remodeling? Why?
Provide local examples of how malls are adapting to the changing (shrinking) retail store climate.

OM in the News: Wal-Mart Shrinks Its Inventory

Wal-Mart's CEO states: "We are trying to fit 4 pounds of sugar into a 2 pound bag" — Wal-Mart’s CEO states: “We are trying to fit 4 pounds of sugar into a 2 pound bag”

“The average Wal-Mart supercenter—home to 120,000 products—has about 2,500 fewer items than a year ago,” writes The Wall Street Journal (Oct. 26, 2015). Some of the changes have put Wal-Mart at loggerheads with vendors who worry they will result in tens of millions of dollars in lost sales. The moves are part of a high-stakes pivot to tame the company’s sprawling empire, organize unruly systems for managing inventory and keep stores neat and better stocked—retail basics that Wal-Mart fumbled recently. Wal-Mart is using more and better data to decide which products stay on shelves and where to remove clutter.

Part of the retread involves culling inventory from backrooms, and dropping some products altogether. In a key move that will change the look of the chain’s stores, Wal-Mart is more than doubling the width of aisles—to 10 feet from 4 feet, making it more navigable for multiple carts. The company is making significant changes to how inventory flows through its stores. Employees are starting to restock during the day, when customers are most likely to complain about missing items, rather than late at night.

“It’s the objective of every retailer to grow their inventory slower than sales,” says CEO Greg Foran. “We just carry too much inventory. And so we do have lots of work under way to get that sorted.” Wal-Mart is also experimenting with lowering shelves by about a foot to make it easier for shoppers to see around the store. The subtle change would wipe out hundreds of millions of dollars in annual sales of gum, candy and magazines. Behind the scenes, Wal-Mart is also aggressively pressuring suppliers to spend more money to earn a spot on shelves. Contract renegotiation letters to suppliers are asking many to pay additional fees to store their products in warehouses, as well as give the retailer more time to pay for the goods.

Classroom discussion questions:

What are the changes inventory policies Wal-Mart is pursuing? Why?
What are the layout changes involved?

OM in the News: Hospital Patients May Feel Better Already in New Hospital Layout

Can good hospital layout help heal the sick, asks The New York Times (Aug. 22, 2014)? The University Medical Center of Princeton realized that it had outgrown its old home and needed a new one. So management decided to design a mock patient room–similar to the process we report in our video case study in Chapter 9 (called Laying Out Arnold Palmer Hospital’s New Facility). Medical staff members and patients were surveyed. Nurses and doctors spent months moving Post-it notes around a model room set up in the old hospital. It was for just one patient, with a big foldout sofa for guests, a view outdoors, a novel drug dispensary and a bathroom positioned just so.

Equipment was installed, possible situations rehearsed. Then real patients were moved in from the surgical unit — hip and knee replacements, mostly — to compare old and new rooms. After months of testing, patients in the model room rated food and nursing care higher than patients in the old rooms did, although the meals and care were the same. But the real eye-opener was this: Patients also asked for 30% less pain medication. Ratings of patient satisfaction are in the 99th percentile, up from the 61st percentile before the move. Infection rates and the number of accidents have never been lower.

There are also some fine points to the Princeton layout, like a sink positioned in plain sight, so nurses and doctors will be sure to wash their hands, and patients can watch them do so. It’s less antiseptic, cluttered and clinical than your average patient room, more like what you find in a Marriott hotel, anodyne and low-key, with a modern sofa under a big window; soft, soothing colors; and a flat-screen TV. “The room,” writes the Times, “is dignified, which matters to a patient’s mental health. And it works.”

This is a great classroom example of the role of layout in the service sector.

Classroom discussion questions:

1. Why is layout important in hospitals?

2. What are some of the OM benefits of this new layout?

OM in the News: Lego High-Rise Construction in NY

Apartments are preassembled at the factory, safely away from the elements

Inside a warehouse at the Brooklyn Navy Yard, steel beams and flat metal sheeting rest atop a workbench. A diagram–which looks an awful lot like furniture assembly instructions–spells out where each beam and metal screw belongs. On it someone has carefully checked off each component, one by one.

The metal may not look like much yet, but it’s on its way to becoming part of the world’s tallest modular residential high-rise. Workers will configure these beams into walls, which will become the scaffolding of rooms, which link together to form entire apartments. Then the “mods” are loaded onto a truck and driven 2.5 miles away, lifted by crane and snapped into position like Lincoln Logs. Time to load an apartment: 30 minutes. From the first cut of metal to placing a mod on its final site, the entire process takes about 20 days. “And we’ll get faster,” says the VP of Swedish construction giant, Skanska. “This is bringing the best of manufacturing and construction together.” The first 32-story tower is slated for completion in December.

Skanska is counting on the new factory approach to urban construction to save on costs and provide greater quality control, writes Forbes (May 5, 2014). A 1,000-square-foot apartment in NY costs an estimated $330,000 to build; Skanska estimates it will knock 15% to 20% off that this go-round–and as much as 30% off with more experience.

“If they can show that here, I think it has potential to have a transformative effect,” says a Tulane architecture professor. “It’s of interest both to architecture and to developers who are interested in building affordably and fast.” The most important innovation is the construction method itself. The factory feels like the love child of Home Depot and a sterile surgical chamber. “We believe that in factory environments the productivity of the worker is greater,” says a project exec.

Classroom discussion questions:

1. Which of the seven layout types in Chapter 9 best describes this project?

2. Which of the 10 OM decisions impact this construction?

OM in the News: Laying Out the Bank of the Future

“JPMorgan’s banks of the future will fundamentally upend Americans’ relationship with banking,” writes The New York Times (April 2, 2014). They will offer more services for customers in far less space. The layout of the new banks has gained urgency across the industry as a growing number of customers use mobile technologies to conduct many traditional banking functions, like check deposits and paying bills, without ever stepping into a branch. Either the bank branches adapt or they go the way of video stores.

JPMorgan is not the only institution trying to reimagine the traditional bank branch with its long rows of tellers standing behind glass. Across Wall Street, banks are looking to slash expenses and wring more profit from retail banking. Banking giants like Bank of America and Citigroup are working to overhaul branches with the goal of more closely resembling an Apple store, where employees holding tablets and other high-tech gadgets tend to customers.

Last year, Wells Fargo opened a 1,200-square-foot “minibranch” in Washington. JPMorgan, whose legacy bank branches averaged about 4,400 square feet several years ago, has already slimmed them down to 2,500 to 3,500 square feet. That firm began by convening focus groups to determine what customers wanted. The findings: space and simplicity.

Within the new branches, the teller line is no longer the centerpiece. That has been moved to the side. The focal point is now occupied by express banking kiosks, a kind of souped-up A.T.M. Aside from their new look, the machines allow more customized transactions. Customers can, for example, opt to get cash in any amount and any denomination, not just in $20 bills or $50 bills. The new machines are safer, too. Unlike traditional A.T.M.s that must be restocked with cash, these units replenish their own supplies from deposits, cutting down on the amount of times that employees have to ferry money to the vaults.

Classroom discussion questions:

1. Why is layout a major concern to banks?

2. What other changes are taking place to make kiosks more secure>?

OM in the News: A Cure for Hospital Design

Endless corridors that seem to lead nowhere. Poorly marked entrances. Multiple elevator banks and incomprehensible signs. “Hospitals,” writes The Wall Street Journal (Feb. 4, 2014), ” are realizing they have a design problem as patients and visitors struggle to navigate the maze of the modern medical complex.” Confusing layouts and signage add to patients’ anxiety at a time when many are feeling ill and are coming to the hospital to undergo tests and procedures.

Now, many hospitals are borrowing strategies from shopping malls and airports to make it easier for people to get around—a process design experts call wayfinding. Technical names for departments, such as Otolaryngology, are being replaced on signs with plain language—Ear, Nose and Throat.

Confusing layouts can result from years of hospital renovations and building additions. When hospitals expand they often fail to update their signs for multiple new entrances, wings and unconnected buildings. At Rapid City Regional Hospital in South Dakota, patients from distant ranching and farming communities frequently complained about finding their way through the 650,000-square-foot complex. So medical jargon directing patients to Antepartum and Postpartum services, for instance, was changed to Labor and Delivery. The Rapid City hospital, which spent about $300,000 on its wayfinding project, installed direction-finding digital information kiosks at each of the three entrances. Different patient areas were given a different color code. If patients or visitors look lost, employees are expected to stop what they are doing and offer to help, even to escort them to their destination.

Universal symbols to help people find departments have caught on in some hospitals, especially when patients speak various languages. The symbols, such as a teddy bear to signal the pediatrics department, have reduced patient confusion at Children’s Mercy Hospital in Kansas City.

Classroom discussion questions:

1. Why are hospital layouts often confusing?

2. What can be done, besides the ideas noted in the WSJ, to improve flows?

OM in the News: Wells Fargo’s Layout Goes Small in a Big Way

Customers who walk into Wells Fargo’s newest branches won’t see teller windows, safe-deposit boxes or bankers sitting in offices, writes The Wall Street Journal (April 12, 2013). Instead, bank employees will walk around with computer tablets, and the branch’s walls will fold in at night so that only the ATMs are exposed to customers. Welcome to the incredibly shrinking bank branch.

The “minibranch” is the bank’s first effort to create a floor plan that can serve most of a customer’s basic needs in less than half the space of a traditional setup. Typical branches are larger than 4,000 square feet and cost roughly $3 million to build. Older branches can be as large as 10,000 square feet. Minibranches take up 2,000 square feet or less– and their operating costs are 40% to 50% below traditional branches.

Under the new layout, bank employees approach customers when they walk into the lobby and guide them to one of three 19-inch flat ATM screens. There, they can conduct a transaction on their own or receive assistance from the employee who carries the computer tablet and wears a messenger bag that holds a keyboard and cellphone. The branch doesn’t have a vault; all cash is kept in the ATMs. One of the most unusual features is a series of movable walls, which open to reveal a desk area and banquette behind each ATM. When the branch is closed, the walls are locked into position to hide that area, giving customers access only to the ATMs.

Bank executives acknowledge that the new formats might turn off some customers who walk into a branch because they prefer old-style banking. “Customers are going to a branch for a reason; it is to deal with people, not an iPad,” says one analyst.

Discussion questions:

1. How does this layout decision (see Chapter 9) impact efficiency at Wells Fargo? Customer service?

2. Have minibranches been attempted earlier? With what results?

OM in the News: Hotels Layout a New Lobby Look

As Jay and I were sitting in the lobby of the Marriott hotel on Michigan Ave. (in downtown Chicago), a few days ago at the POMS meeting, we were amazed at the crowd that seemed to be in the massive space all hours of the day. People were in mini meetings, they were watching six huge TV screens, they were drinking coffee, eating, or simply typing away at their laptops. It seems the new layout of hotel lobbies is intended to make them a place for both guests and locals to lounge and feel like they are in a living room or on the deck of an ocean liner.

Hoteliers, according to The Wall Street Journal (April 19, 2012), want a lobby that is abuzz with locals and out-of-town guests doing business or kicking back. Consumers, it turns out, are willing to pay a premium to stay at such a property. Beyond the buzz, mobile workers find there’s more leg room in hotel lobbies than in coffee shops. In some lobbies, it’s possible to order food and drink from the roaming wait staff. Freelancers have taken to hotel lobbies, instead of Starbucks, and hotels are courting them with long tables and lots of outlets. When Ted Copeland, for example, comes in for his coffee at Chicago’s Public Hotel (shown in the photo), the barista has his order ready. Then he sets up his laptop and lingers for a few hours over the caffeine and free Wi-Fi.

A crowded hotel lobby creates an upbeat, buzz-worthy atmosphere, which over time is thought to lead to higher occupancy. “If you have an active lobby, from a customer standpoint, it does reinforce the idea that the hotel is successful and a good hotel,” says an industry consultant. Many hotels say even overnight guests, especially those under 40, are more comfortable working in a public lobby than upstairs in their rooms.

Discussion questions:

1. Why is layout so important in this industry?

2. How has Starbucks taken advantage of the lobby trend?