5 reasons to book alternative accommodations for business travel
As ride-sharing services and alternative accommodations move solidly into the mainstream for personal travel, employees increasingly expect access to the same options when they travel for work.
“What we’re seeing is what we’re calling the ‘consumerization of business travelers,’” said Jeanne Liu, Vice President of Research for the Global Business Travel Association. “It’s what you do in your regular consumer life. If you use ride-sharing and home-sharing, or if there are certain apps you like to use, it’s going to go into how you plan and how you pick your options in business travel as well.”
Ride-sharing has quickly been adopted by many companies and employees for business travel, and the acceptance rate for sharing economy accommodation providers is accelerating, primarily driven by millennial travelers’ use, inside or outside of company travel policy.
On the company side, ride-sharing services are now allowed by half of all corporate travel policies, according to the GBTA’s January 2017 Business Traveler Sentiment Index. Thirty percent of respondents in the same survey said sharing economy accommodation providers such as Airbnb and HomeAway are allowed under their company travel policy—a 20 percent increase over survey results just six months earlier. According to research data in the 2016 Business Travel Spend Report by Rocketrip, a travel management company that has developed tools to reward employees for booking under budget, Airbnb bookings for business travel were up 54 percent in 2016 compared to 2015.
A similar pattern has been charted among individual travelers by veteran business travel analyst Henry Harteveldt, President of Atmosphere Research. “We know from our own research that 67 percent of business travelers have already used some sort of ride-sharing service, and 12 percent have used home sharing while on a business trip,” Harteveldt said.
Ride-sharing has quickly been adopted by many companies and employees for business travel, and the acceptance rate for sharing economy accommodation providers is accelerating.
Those who manage or book travel for their companies as part of their overall job responsibilities might not be aware of all the benefits that can result from incorporating alternative accommodations like Airbnb into a travel program. Here’s a look at five reasons to rent corporate apartments and sharing economy accommodation providers that help keep travelers happy and the company’s travel budget under control.
1. Cost savings, convenient locations
“Business travelers tell us home sharing is more convenient and puts them closer to where they need to be than traditional hotels,” said Harteveldt. “And for the same amount they would spend on a hotel room, or less, they get an entire apartment. They like being more productive and more relaxed than they can be in a hotel.”
Rachel Ersted agrees. Ersted manages travel as part of her job responsibilities as Senior Treasury Analyst at Box, a cloud management and file sharing service for businesses. Box officially added Airbnb for Work to its travel program in 2016. “I see two main benefits with Airbnb,” Ersted said. “One is choice; it gives our travelers the choice of size, amenities, location, the way that the house feels. And that’s really important, especially when people are going on extended stays. Another obvious benefit is cost. We see Airbnb as a really affordable option and alternative to other legacy ways of staying in these cities.”
A 2016 Airbnb Travel Spend Findings report by Rocketrip found that the average daily rate (ADR) for travelers who stayed in Airbnbs for work trips was 41 percent lower than the average daily rate (ADR) for traditional hotels in urban markets worldwide. Savings on ADRs from staying in Airbnb varied by market, according to the report, from $68 savings per night in Austin to $131 in San Francisco and $147 in Washington DC.
Those cost savings are available worldwide for companies that have incorporated Airbnb for Work into their travel program. RingCentral books travelers into Airbnb corporate rentals in the U.S. and internationally, where the company has offices in Russia, Ukraine, China, and the Philippines. “If people go to our office in Russia, they will pay $82 per night on Airbnb in some prime locations versus paying an average of $200 per night for a hotel,” said Elena Warburton, Director of Global Travel for RingCentral Inc., a cloud communications provider. “That’s a no-brainer, it’s great savings.”
2. Inventory options
Availability of inventory is another benefit of adopting sharing economy accommodation providers, both for travelers and travel coordinators. These alternative accommodations offer additional inventory in cities with traditionally high hotel rates year-round, and when attendance at conferences and events in key urban markets squeezes hotel availability while simultaneously pumping up pricing.
After Campari launched Airbnb for Work in 2016, “it has become more and more prevalent in our business bookings for accommodation worldwide,” said Ashley Schmitz, Regional Lead Executive Assistant for Campari America. The reasons: location flexibility for travelers and competitive rates for the company.
“As part of our travel policy, we have a daily cap for accommodation spend,” Schmitz said. “Our team frequents popular destinations where conferences and other city-wide events are prevalent, thus sending hotel rates through the roof and well over the allocated daily amount. This makes Airbnb a great option for us because of its flexibility, not only in the selection of available locations but also in its cost variation.”
Autodesk travelers book Airbnb as an alternative to hotels that charge premium pricing in Boston, San Francisco, and other key Autodesk destinations, both due to high demand and price spikes or sold-out conditions from citywide conventions. “Eighty to ninety percent of all our Airbnb bookings are individual, and the reasons are typically cost and a desire for something different,” said Mark Papale, Manager of Global Travel Operations for Autodesk, a 3D design, engineering, and entertainment software developer
3. On longer trips, all the comforts of home
“Staying in an apartment that is set up for business travel, even having several employees share a multi-bedroom house, is so far superior to even the most luxurious hotel for extended stays,” said Chip Conley, hospitality entrepreneur, author, and senior advisor to Airbnb. “Spending a week or a month in a place with a kitchen, an actual living room, in a real neighborhood, is first and foremost the advantage for sharing economy accommodations.”
Spending a week or a month in a place with a kitchen, an actual living room, in a real neighborhood, is first and foremost the advantage for sharing economy accommodations.
Gayla Steeneck, Travel Supervisor for IES Communications, a cabling and communications company, said IES has enjoyed significant benefits for the company and travelers by booking Airbnb for long-term projects and extended stays.
“Cost saving is the bottom line, especially if we are putting three or four people in the house,” Steeneck said. “It definitely saves money over individual hotel rooms.” Case in point: When a project required several IES employees to stay in Las Vegas more than two months, the cost for the group to stay together in a private Airbnb home, with no host present, broke down to cost just $29 per person per night.
Cost savings aren’t the only benefit. “From the traveler perspective, it’s just being able to have a nice place, a decent house that has a kitchen and a washing machine and everything—all the comforts of home—where they can park in a driveway or a garage,” Steeneck added. “To them it’s definitely better than a hotel.”
4. Teaming up to travel
Autodesk’s Papale is among the travel managers who have identified a trend toward team travel, especially among millennial employees. “Traditionally it’s been one person, one room,” Papale said. “Now we are seeing more people teaming up and renting a four- or five-bedroom house, and saving a significant amount of money. That’s allowing departments to stretch their budgets.”
A recent offsite meeting for eight employees would have carried a price tag of more than $9,500, but the Autodesk travelers chose to book and share a large, private Airbnb house for a total cost of about $4,500. “That $5,000 savings goes directly into that cost-center’s budget,” noted Papale.
Team travel is also an emerging pattern at Hudl, a software company that provides online tools for coaches and athletes. “We have a lot of groups of people using Airbnb,” said Brandon Gries, Hudl’s Travel and Event Coordinator. “We have a pretty young company and a lot of people are friends with each other, so they are willing to get a place with two or three bedrooms and stay together.”
That happens most frequently for conference attendance. “One of our employee benefits or perks is that every year every employee gets to travel to a conference for professional development,” Gries said. When Hudl employees travel to tech conferences in San Francisco, they often travel in groups of two to four people and stay together in an Airbnb. “San Francisco is a traditionally expensive hotel city,” Gries noted. “Even the negotiated conference rates are upwards of $300 per night, so it’s more than we like to spend.”
From the viewpoint of the company and whoever is arranging travel, it’s all about solving the needs of the traveler and reducing the friction to make travel as easy and as efficient as possible.
Offsite meetings are another opportunity for employees to use shared accommodations. Ersted said that’s a common practice at Box, where ‘Boxers’ frequently travel together for offsites. “It’s great because they can all stay in the same place, it’s really easy, it’s affordable, and it prevents them from having to get separate meeting rooms or conference centers,” Ersted said. “It’s all right there and they feel like they’re at home with each other.”
5. Traveler satisfaction
As companies increasingly focus on keeping travelers happy as well as controlling or reducing costs, traveler satisfaction is driving adoption of sharing economy accommodations for work travel.
“We have moved to an environment where everything is traveler-centric,” said Norman Rose, President of Travel Tech Consulting. “From the viewpoint of the company and whoever is arranging travel, it’s all about solving the needs of the traveler and reducing the friction to make travel as easy and as efficient as possible.”
Access to a different experience in a destination, one that is more local and authentic, is moving up the list of what employees want most when traveling on company business.
“Many people who come from out of town prefer to stay in San Francisco rather than where our main office is located, which is in the suburbs of Silicon Valley,” said RingCentral’s Warburton. “They want to combine their business with pleasure and they want to get the feel of San Francisco, but the hotel rates in San Francisco are so high that Airbnb is the obvious choice.”
“When it comes to choosing how we are going to travel, what's in my mind is what's going to let us recharge?” said Tad Milbourn, former CEO, co-founder and travel coordinator for Payable, an eight-person company that provided contract worker payment services and was acquired by Stripe in 2017. “This is usually the place that we are going to be staying at the end of the day after doing something else for the business,” he said.
As for many other road warriors, evening hours for Payable employees can mean more work and/or the opportunity to dine and experience the city, and finally, get a good night’s rest.
“That’s why we are almost a hundred percent of the time using Airbnb, because it hits all those factors,” Milbourn said. “It’s likely going to be a unique, more comfortable place to sleep, it's going to have an environment that has wifi and a couch as opposed to just some sort of stodgy bed in a corner. And it’s going to have the opportunity of being in the right part of the city to get a feel for what it’s like to really be in that city, not sequestered away in some corporate downtown. That’s why over basically the entire history of the company, Airbnb’s been a core part of how we travel for business.”