Analyzing the Growth of Business-Ready Accommodations
Up until Airbnb launched its Airbnb for Work platform in 2014, the day-to-day of business travel hadn’t experienced any major seismic shifts. For decades, the dominant players in corporate travel were large hotel chains, and the list of amenities stopped shortly after continental breakfast. In recent years, however, progressive corporate attitudes and thriving vacation rental markets have fused to create the perfect storm for a new landscape of business-ready accommodations.
A Shift in Corporate Culture
Today’s most successful companies are redefining their definitions of employee well-being. One of the most important elements of well-being is the way in which employees are cared for outside of the office. Work trips that traditionally consisted of sterile conference rooms and lonely weeknights are no longer the norm. Instead, many businesses are prioritizing relaxing, comfortable environments, and experiences that foster creativity and team building.
Potential for Cost Savings
Based on AllTheRooms Analytics’ data from some of the most popular travel destinations in the United States, business-ready accommodations are 49% cheaper than their hotel chain counterparts. In Washington D.C., the average ADR for an Airbnb is $135. The price of a single hotel room? $283. In Chicago, the ADR for vacation rentals of $127 is 46% cheaper than the average hotel price of $283.
Introducing Airbnb for Work
Knowing that businesses are well aware of these vast discrepancies in price, comfort, and amenities, Airbnb set out to create a one-stop shop for business-ready vacation rentals. Unlike leisure travelers, business travelers (and their companies) are not looking to browse dozens of potential listings to find the perfect getaway.
On the contrary, business travelers require a very specific set of criteria that significantly narrow the search: blazing fast WiFi, comfortable working spaces, proximity to financial districts or co-working spaces, travel essentials like basic toiletries, self check-in code with a keypad or lock box, and flexible or free cancellations.
So, what exactly is Airbnb for Work? The relatively new platform is a dashboard where businesses create a profile, gain access to travel reports, expense reports, invoices, and even set a limit on the maximum number of employees who can book a listing. Employees then sign on and are able to filter listings for what they’re specifically looking for.
The model is efficient for organizing everything from standard run-of-the-mill business trips to corporate retreats and even full-service conferences. Airbnb also has a partnership with WeWork, which grants employees a free day at a nearby co-working space during their stay.
How has it Performed?
As of August 2018, Airbnb reported that over 700,000 companies currently use Airbnb for Work on a consistent basis. That number is up almost 200% from its previous report one year prior. All in all, Airbnb for Work now accounts for over 15% of the platform’s total revenue.
On the consumer side, initial feedback has been mostly positive. On the supply side, many investors and property managers are now strategizing and tailoring their listings specifically for business travelers.
Research also shows that business travelers using vacation rentals are likely to stay longer than those using standard hotels. Airbnb for Work reports an average stay of five nights, while hotels normally average three nights for business. Because Airbnbs are cheaper, it’s often easier to justify an extra night or two for leisure — which in turn is creating a whole new demographic of “bleisure” travelers.
Notably, this business partnership between corporations and a homesharing platforms does have downsides. Firstly, there’s a certain degree of comfort and peace of mind in booking a room in a hotel. Perks include 24/7 security, knowledgeable front desk staff, on-site restaurants and amenities, and more. If a pipe bursts or if the roof leaks in a business-ready accommodation, the hosts can’t necessarily move you to another room like they can in a regular hotel. Speaking of which, here is Your Guite to Vacation Rental Insurance: Best Providers, Tips, and Insights.
Additionally, if a business sends employees consistently to the same city (and same neighborhood), they likely have a preferred hotel. Hotels provide a go-to solution that doesn’t cause any headaches, and they can also offer discounts for returning guests and bulk. On the contrary, if a business finds a perfect Airbnb within walking distance of a conference center, there’s no guarantee that the Airbnb will be always be available. Airbnb for Work provides a degree of flexibility — but it may force business to be too flexible as businesses can be forced to find different accommodations each trip. Lastly and perhaps most importantly is that as of May 2019, Airbnb for Work has no loyalty or rewards programs. This is a huge bonus in hotels. Companies with tons of recurring customers are able to rack up significant cash-back bonuses or special access perks. Here are another 8 Ways Hotels are Competing with Airbnb.
In today’s hyper-competitive environment where employee perks are at a premium, the best businesses are fighting tooth and nail to keep their most valuable employees. Airbnb for Work is an interesting introduction into the landscape of corporate travel and business-ready accommodations. Although there do seem to be some significant drawbacks, the platform is certainly poised to transform the very meaning of business travel, as it has already successfully done for leisure travel.