With business travel on the rise, so too are short-term rental services for platforms like Airbnb and HomeAway
Many new online travel services today seem to be inspired by two things - the experience of business travellers on the road, and the changing nature of business travel.
In a story earlier this month we highlighted that as a regular business traveller Jens Wohltorf, co-founder of professional driver service Blacklane was tired of “being stranded in the middle of nowhere…out of cash in a taxi or standing in a queue to know some heavy optimisation of ground transportation was needed”.
The idea for GuestReady, which officially launched in six countries this month, also came to founder and CEO Alexander Limpert as a business traveller. Working as a management consultant for three and a half years prior to launching his ‘Airbnb management services for short-term rentals’ he’d stayed in a fair number of five-star hotels. But like all business travellers he is also a leisure traveller, and an adventurous one at that. An early adopter of services like Couchsurfing and Airbnb, Limpert enjoyed the local flavour and personal experience that these services promised and even felt they could be a viable alternative to a bland hotel room when he was travelling on business.
It seems he is not alone. Airbnb may have started out as a rental on an air mattress in a front room – something that some guests may still be happy with - but increasing numbers of travellers now use it for business. According to Lex Bayer, Head of Global Payments and Business Travel at Airbnb, in 2016 Airbnb tripled in growth and with nearly 14,000 new companies signing up for ‘Airbnb for Business’ each week, a big part of this is being driven by business travel.
“We've also seen 10% of Airbnb customers travelling for business, revealing that this is an untapped market, a growth accelerator and an opportunity to improve the traveller experience,” he says.
Little surprise then that Airbnb has been pushing for partnerships with travel management companies, and three of the biggest have recently come to the party – American Express GBT, BCD and Carlson Wagonlit Travel.
Business travel…I an untapped market, a growth accelerator and an opportunity to improve the traveler experience
It’s certainly a growing market. According to the most recent research from Global Business Travel Association (GBTA), global business travel is expected to rise by 5.8% on average over the next five years to reach $1.6 trillion by 2020.
However, while use of services like ‘Airbnb for Business’ are on the rise, so are traveller expectations. Recognising that Airbnb is stealing a march in this space, earlier this year Accor moved to acquire of Onefinestay. Recognising the higher expectations of business travellers led Accor to see this high-end version of Airbnb, with its inventory of 2,600 properties in London, as the right fit. Accor wants to target 40 more cities across the globe with high-end stays, something Vivek Badrinath, the chain’s CEO, has been quoted saying his clients are really interested in.
Unsurprisingly, the average business traveller has higher expectations than the average leisure traveller but for somebody doing short-term rental hosting on the side, this could prove challenging. Because while shifting traveller behaviour means that today the personal touch and local insight is often valued over hotel brand blandness, many guests also expect fast reliable Wifi, nice fluffy towels and a high standard of cleanliness. “Some people are even unhappy to find a hair on the floor,” says Limpet, and this might put them off using a short-term rental platform in the future.
… the personal touch and local insight is often valued over hotel brand blandness, but many guests also expect fast reliable Wifi, nice fluffy towels and a high standard of cleanliness
By providing a range of host services such as laundry, cleaning, check-in and check-out, as well as entire property management (guest communication, maintaining listings and so on) for short-term rentals, this is a gap that firms like GuestReady and Hostmaker believe they can fill. Efficiency, professionalism and standardisation are particularly important in the business travel space, argues Limpert and for non-professional hosts, this is hard to achieve.
The jury is out on how Airbnb feels about the arrival of such services, which arguably it could develop itself. In fact, since launching the programme last year, Bayer says Airbnb has already developed a variety of tools to help companies develop business travel programmes for their employees. These include: a business travel ready listings, third-party bookings and a dashboard for travel managers. Travel managers can now access data through corporate reporting and duty of care platforms giving them better insight into the employee experience.
Safety and security, another major headache for travel managers, is also on the Airbnb agenda. “We have a 250 person global trust and safety team which is on call 24/7 to help, and we offer host protection insurance and a $1 million host guarantee to help protect eligible hosts and their property,” Bayer says.
Having said that, with people travelling more, their properties standing empty for longer and rising demand for accommodation, Limpert argues that the market for short-term rentals is maturing.
GuestReady believes that it is strongly positioned to help those travelling homeowners to become Airbnb hosts. Success will depend on the ability to scale but also about the ability to deliver a local experience in each market – hence GuestReady’s globally flung team and launch already in six countries.
And so the so-called ‘sharing’ economy moves ever closer to the mainstream. As Hostmaker CEO and founder Nakul Sharma speculates: perhaps the house of today could even be the hotel of the future.