Airbnb’s Brian Chesky neatly summed up the mentality of the travel industry when he said in May: “The lines between travel, living and working are blurring.”
As someone who has been in the corporate housing sector for many years, I would add that the lines have been blurred for as long as alternative accommodations have been offered to business travelers and globally mobile employers.
A business traveler opting to stay in a furnished apartment rather than a chain hotel conjures up much more of a feeling of being at home in a place while also working - especially if they are on an extended stay.
The rise of alternative accommodations and bleisure
When Airbnb suddenly grew in popularity in the 2010s, the world was alerted to a new way to travel. It was driven by demand for alternative accommodations and led by "experiences."
This halo effect drove the desirability of short-term rentals globally, and existing and new players in this space went on to benefit from that trend.
Now we have this new term "bleisure" being used to describe the direct result of the pandemic on travel. People told to work remotely last year took and are still taking advantage of this by blending their "vacation time" with "office time" and seeing more of the world while doing so.
In the future, it seems pretty likely "bleisure" is here to stay given a recent study found that more than 20% of the workforce could work remotely three to five days a week as effectively as they could if working from an office.
The longstanding demand for alternative accommodations and the recent rise of "bleisure" have now converged. This has created opportunities for players in the travel sector to widen the appeal of their offering to both leisure and business travelers, especially as optimism for travel continues to increase.
Catering to corporate travelers
All of the major OTAs had already set up filters for "traveling for work" - a no-brainer to whittle down properties with office-ready amenities like fast Wi-Fi or a desk.
Smaller lodging brands are also making targeted inventory acquisitions and marketing efforts aimed at attracting corporate travelers: Sonder and Casai are two such examples.
With record investment in travel startups this year, there will undoubtedly be more examples of growth and acquisitions in the space too numerous to list.
What brands like Sonder and Casai offer is in essence the same as global hotel chains: standardization.
If you’re in a Marriott hotel anywhere in the world, be it Baltimore, Berlin or Bangkok, you will have a similar experience and level of service. It’s no surprise that individual business travelers will often gravitate towards one particular chain they prefer.
Alternative accommodation firms which offer that to the extended stay market prove that standardization is not mutually exclusive with choice and experience (the two key demand drivers for corporate accommodation).
However, consistency, or lack thereof, is the key reason why leisure companies will find it difficult to break into the corporate sector.
When you’re relying on individual property owners to set their own standards of property care and facilities, each experience is uncontrollable and different to the next and standardization is impossible.
If a company is responsible for the welfare of its employee, the uncontrollable is not an option.
The barrier to entry: trust
What corporate-decision makers want is to be able to work with providers they trust because they will then entrust them with some of the legwork in navigating complex compliance and safety issues in international travel.
This should involve fully vetting the supply chain to make sure each person involved is someone you’d want to do business with. Stress tests should be carried on inventory, benchmarked against a global standard.
When you’re relying on individual property owners to set their own standards of property care and facilities, each experience is uncontrollable and different to the next and standardization is impossible.
Lee Curtis - Reside
Throughout any stay, service should be professional at all times, with 24/7 support and maintenance. Easy access to conflict resolution and insurance cover for both corporate and personal policies are just two more standards you’d expect.
At Reside, our network of accommodations has over one million properties in 60 different countries, but each upholds the same standard of duty of care, like adherence to WHO guidelines in sanitation, cleaning and disinfecting and a global location-specific Health and Safety scoring for each property. It’s these processes that build trust amongst clients and guests.
When COVID-19 hit wellness, security and safety of employees became top priority and employers were put under intense scrutiny to ensure risks associated with these were mitigated. The corporate travel sector eagerly rose to the challenge. Enhanced cleans, reduction of touchpoints and geotracking were swifty introduced to restore confidence in travel.
Partnerships have been formed to provide hyper-local data to clients that enable them to make smart decisions in real-time on security risks from COVID-19 to women’s safety. Similar measures were also adopted in the leisure sector of course, but frankly, not to a similar universal standard.
It’s unlikely this scrutiny will die down, it will simply become part of the new normal. Corporate travelers should expect tighter restrictions at all points that their employer can control and for a longer period of time than what we might see in the leisure sector because they have a duty of care towards their employees.
What this ultimately shows is that corporate travel procurement is a bigger beast than simply going on vacation.
Lodging companies that were ‘built for business’ from the get-go, like ABODA and others, have this intrinsically wired into their offering and know what Fortune 500 companies want before they’ve requested it.
This is not to say that the industry won’t benefit from the incredible resilience and technological growth of the leisure travel sector that we have seen these past 18 months.
Corporate travel has always been playing catch up in this regard. Crossover into corporate travel will be the hardest part.