How Autodesk saved $900K on its accommodation spendIn the first year after officially permitting bookings on Airbnb, Autodesk benchmarked roughly $900,000 in savings against what hotel stays would have cost the company.
Getting started: In 2015, Autodesk travel policy directed employees to a variety of preferred hotel providers around the world. That’s one reason Mark Papale, Autodesk’s Manager of Global Travel Operations, didn't think employees were using Airbnb when traveling for business. But when Airbnb started showing up more frequently on expense reports, the company conducted an audit that revealed $100,000 worth of recent purchasing.
“I was surprised,” Papale said. “We just never thought people would stay in an Airbnb for business travel.” In that assumption, Papale was like many other travel managers. Based on the audit showing existing use, Papale kicked off efforts to forge an agreement to incorporate Airbnb into Autodesk’s official travel policy.
Getting to yes: It took about a year to satisfy all stakeholder questions and concerns about Airbnb’s share economy business model, insurance and liability factors, and data security. “The pain point was getting buy-in from the company,” Papale said. “Risk, legal, HR, and our information security teams all had to look at this.”
While the vetting process was underway, Airbnb accelerated its focus on Airbnb for Work, introducing a variety of product enhancements including a dashboard to enable traveler visibility and reporting, and integration with several risk management providers. Airbnb also began identifying entire homes or apartments in its inventory to address corporate risk concerns about placing employees in shared units. These properties also included a number of work-ready features including wireless internet, a laptop-friendly workspace, 24-hour check-in, smoke and carbon monoxide detectors, and amenities that travelers typically expect in hotels such as shampoo and soap, an iron and ironing board, hangers, hair dryer, and fresh towels and linens.
While business-focused product enhancements and management tools were important considerations in the vetting process, integration with risk management provider iSOS was key. “Duty of care is why I have a job,” Papale said. “The only reason we were able to incorporate Airbnb into our travel program is the integration with iSOS. That has been huge for us.” Ultimately, he said, all stakeholders in the decision to allow use of Airbnb “were satisfied to a degree that we were able to move forward.”
The launch: In March 2016, Autodesk’s official travel policy allowing Airbnb bookings went into effect. “Once we got the green light, setting it up was simple, easy, and painless,” Papale said. After sending out a company-wide message notifying employees that Airbnb was an acceptable accommodation option and outlining use rules, “employees started booking stays immediately,” he said.
Once we got the green light, setting it up was simple, easy and painless.
Autodesk’s use rules for Airbnb are simple: business travelers must use the Airbnb portal to book; the booking must be private—no shared rentals allowed; and the Airbnb booking can’t increase travel costs over current lowest-price hotel benchmarks in the same market. Regarding the rule prohibiting shared rentals, “It’s not that we don’t trust the homeowner,” Papale said. “It’s because we have employees traveling with very expensive equipment and intellectual property that we need to protect.”
Checking for compliance: Booking an Airbnb-designated work-ready property virtually ensures compliance with Autodesk travel policy, “but those listings aren’t always available,” Papale said. In those cases, he conducts a manual audit to make sure every Airbnb booking complies with Autodesk’s three governing use rules.
“I’m set up in the system as travel manager, so I receive an email as soon as anybody books a trip using Airbnb,” Papale said. The notification email contains a link to the listing, which he or his colleague in Asia-Pacific check to confirm that the property is not a shared space and that the listing meets Autodesk’s safety and security requirements. If an employee books a shared space, Papale contacts the traveler and requests that they rebook.
Manually checking for compliance is simple and takes just a few minutes. “It’s certainly not brain science,” Papale said. “I just click on the link and make sure it’s not a shared booking. If it’s a whole-use booking and has decent reviews, we let it go. I will give this a full two years and then move along and let employees book their own Airbnb stays without checking,” he added. “I won’t need to do it anymore, because by then it will be imbedded in the company culture.”
Tracking and calculating savings: Autodesk’s travel team uses a spreadsheet to track and calculate how much Airbnb helps the company save on business travel. Once an Airbnb booking is confirmed, “I benchmark it against current hotel costs in that market, including lowest cost,” Papale said. “It’s a real-time check of what the hotel cost is in a specific city at that time. It’s easy; it takes two minutes. I just go into Concur, look at the price, and document it on the spreadsheet.”
“We’ve done that for every single Airbnb booking,” Papale added, “and that’s where we came up with almost $900,000 in savings in the first year.”
We initially told the executive team we could save $100,000 in a year. We didn’t realize there would be so much adoption.
A closer look at savings: Autodesk realizes reduced travel expenses from using Airbnb for short- and long-term business travel, including attendance at conferences, trade shows, and events as well as relocation, off-site meetings, training rotations, and site development.
According to Papale, “Eighty to ninety percent of all Airbnb bookings are individual, and the reasons are typically cost and a desire for something different.” He said business travelers are booking Airbnb to alleviate premium pricing common in San Francisco, Boston, and other key travel cities, both due to high demand and price spikes or sold-out conditions from citywide conventions.
“We had a group of 10 to 15 employees attending the Tokyo Auto Show,” Papale said. “They each booked individual Airbnb apartments and it saved the company a lot of money, due in part to the hotels’ practice of increasing costs during these events.”
Team travel trend: Whether motivated by reducing travel costs, a desire for a different experience, or social considerations—or a mix of motives—Papale has noted an increase in the number of travelers sharing an Airbnb listing while traveling on business for Autodesk.
“Our employees have changed the way they are doing travel,” Papale said. “Traditionally it’s been one person, one room. 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 example: Three travelers attending an event in San Francisco booked and shared a three-room Airbnb apartment for a total cost of $1,472. Papale calculated the cost of three separate hotel rooms for the duration at about $5,775, which puts the savings on business travel expenses on that single trip at just over $4,300.
Another team travel cost-savings example: Papale calculated that hotel rooms for an offsite meeting for eight employees would have carried a price tag of more than $9,500. The travelers decided to book a large Airbnb house for the offsite for a total cost of about $4,500. “That $5,000 savings goes directly into that cost-center’s budget,” Papale said. “How they use that savings is up to them, but since we as a company are in a cost-savings mode now, they could use it to send someone on a customer-facing initiative.”
We are seeing more people teaming up and renting a four- or five-bedroom house, and saving a significant amount of money.
While travel budget savings resulting from a group of people sharing an Airbnb space can be significant, travelers decide for themselves if they want a team-stay experience. “We don’t mandate this,” Papale said. “It’s up to them.”
Team sizes cover a broad spectrum, ranging from a couple of people to a small group. “Why would you want to go to an offsite with 14 of your colleagues and stay in the same place?” asked Papale. “I don’t know the answer to that, but they’re doing it. Were they doing it before and buying double-double rooms? We don’t know. But the new policy has been a learning experience.”
Long-term stays: The trend for teams to stay together in an Airbnb instead of individual hotel rooms extends to long-term trips as well.
“The thing that I find important and most surprising is how we are using Airbnb for long-term stays,” Papale said. For rotational training sessions in one key city, “We’re renting homes or apartments for up to six or seven months at a time, and flipping out the different employees that are staying there.”
Savings on travel expenses in this scenario are significant. In one instance, when a $20,000 Airbnb reservation in Singapore popped up in the system, Papale contacted the employee to learn more. The employee had booked a multi-bedroom home from July to November to move a series of employees through training. “Hotel expenses for such bookings would have cost $100,000, while the Airbnb was $17,000, an $83,000 savings,” Papale said.
“We also see a large uptick of long-term stays in cities like Neuchâtel in Switzerland, where we have a big financial headquarters,” he added. “This typically happens as we’re building out new sites and we have project managers or teams coming in. They’re staying in these apartments long term, and it’s been really great. I’ve spoken to several of them and they prefer Airbnb rather than staying in a hotel for three or four months.”
Revelations: Papale candidly admits that the volume of Airbnb bookings, the lower business travel costs, and the variety of uses surprised him. “I didn’t think we would be using it as much as we are,” he said. “We initially told the executive team we could save $100,000 in a year. We didn’t realize there would be so much adoption.”
Compared with Autodesk’s total hotel volume for 2016, the $900,000 in reduced travel expenses resulting from the first full year of policy-approved use of Airbnb, “is not huge, but it’s a lot more than we thought it would be, and it’s more global than we anticipated,” Papale said.
While the majority of Autodesk travel is domestic, Airbnb bookings include a strong mix of international travel. “I was convinced we would have everybody going to San Francisco staying in an Airbnb, but what I didn’t anticipate is that it was going to be used all over the world, with the exception of China and India where it’s still in early stages,” Papale said. “We have travelers using Airbnb in Europe, Canada, and all over the U.S. It’s pretty amazing. I have salespeople who are using it in Mexico every single week.”
While Autodesk hasn’t conducted any satisfaction surveys around Airbnb use, Papale said, “if you look down the list of employees who are using Airbnb, there are a lot of repeats” among various employee types from sales and HR to designers and programmers.
Possibilities: Autodesk continues to contract with and use preferred hotels. In 2016, more than 90 percent of the company’s $10.7 million in hotel spend for more than 52,000 room nights was directed to traditional hotels. During the same period employees spent $322,000 on 3,570 room nights with Airbnb, rooms that would have cost an estimated $900,000 more in traditional properties.
Papale said it’s difficult to anticipate if Autodesk will track increased adoption and additional savings from Airbnb use in coming years. For 2017, “We are seeing more bookings than we did last year,” he said. “We have also seen hotel costs increase dramatically in key markets. I anticipate Airbnb market share will increase as long as hotels continue with surge pricing.”
Insights: At industry conferences, Papale often hears his peers say, ‘Absolutely, we are not using Airbnb.’ He remembers his own skepticism about Autodesk use of Airbnb and thinks, “If they audit, I bet they are. They probably should take a look if they want to stand on that statement.”