Last week at its annual Airbnb Open conference, the world's largest home-sharing company announced a new set of features designed to attract corporate travelers.
Airbnb will now designate select properties as "Business Travel Ready" when they satisfy a list of requirements based on the needs of corporate travelers and their employers. To be certified as Business Travel Ready, an Airbnb listing must meet defined standards for:
- Business Amenities - The property must have WiFi, laptop-friendly workspace, and guaranteed key access.
- Home Type - The listing must be for the entire home or apartment, with no smoking or pets.
- Host Quality - The host must have the maximum rating of five stars on at least 60% of reviews, with at least three reviews.
- Responsiveness - The host must respond to 90% of all booking requests within 24 hours.
- Commitment - Hosts may not cancel any confirmed business reservations within seven days.
This new certification system comes four months after the rollout of Airbnb for Business, which the home-sharing service is promoting as a way to supply corporate travel programs with the same range of tools offered by hotels, including central billing, employee tracking, and consolidated expense reporting.
Airbnb has invested heavily to make its service more attractive to business travelers. But with all due respect to Kevin Costner's ghost dad in Field of Dreams, the questions remains: now that Airbnb's built it, will business travelers come?
Airbnb means business
Airbnb has made the coporate market a priority. In his excellent overview of Airbnb's evolving business travel strategy, Greg Oates of Skift wrote that Airbnb has identified business travel as one of three primary growth areas, along with Chinese tourism and non-urban destinations:
In his presentation at Airbnb Open, Jonathan Liebtag, the company's business development lead, noted that over 30% of hotel bookings are for business travelers - which he says represents a $120 billion dollar market - but only 10% of Airbnb guests are traveling on business.
“We’re really excited about business travel and Airbnb,” he enthused. “So we think it’s a huge opportunity for the company to reach a new set of travelers.”
Already there are signs Airbnb is having success reaching that new set of travelers. Liebtag highlighted Google, Salesforce.com, and Vox Media as some of the clients who have incorporated Airbnb intro their travel programs. In August, one month after introducing Airbnb for Business, Airbnb announced that over 1,000 companies had signed up, and declared that "the corporate community's response to our Business Travel program has been staggering."
Of course the vast majority of business travelers stay in hotels, but use of home-sharing is growing exponentially. Data compiled by Certify, a travel and expense management solution, shows that Airbnb bookings increased 143% from Q1 to Q2 in 2015. Renting a home or apartment is particularly popular in some cities and use cases, such as extended trips and new employee relocations. Certify's figures show that business travelers stay in Airbnb for longer than they do in hotels (3.8 nights on average, compared to 2.1 for hotels), and that their most common destinations were San Francisco, Chicago, and Seattle.
Several other factors are helping to establish Airbnb as a viable alternative to traditional hotels within corporate travel programs.
Short term rentals are on firmer legal footing after a series of favorable local election outcomes and regulatory decisions in cities such as San Francisco, Philadelphia, and London.
Additionally, a slew of mergers and new market entrants in the travel industry have led many companies to reevaluate which approved vendors they include in their programs. In a world where Marriott is merging with Starwood, and Ubers are replacing taxis, travel managers are finding it necessary to keep an open mind about what services employees use.
It's also important to note that for companies open to the use of the sharing economy, Airbnb presents an opportunity for significant cost savings. Rocketrip travelers who book an Airbnb beat their hotel budgets by an average of $110 a night.
Rocketrip motivates employees to spend less on business trips by letting them keep half of what they save, but Airbnb claims that even in the absence of this incentive, it can reduce a company's travel expenses significantly. “We show the average daily rate that [travel managers] are getting on Airbnb so they can take that and compare it directly to what they’re paying at hotels,” said Leibtag, the business development lead. “Not surprisingly, they’re saving a ton of money at Airbnb. Hotels just cannot compete with that, which is usually around a 30% savings.”
Can Homes Be the New Hotels?
For Airbnb to compete with the Marriotts, Hiltons, and other behemoths of the business travel market, it will have to win over two key groups: corporate travelers and corporate travel managers.
The company's value proposition for travelers is well-honed: home rental provides a more relaxed, personalized, and authentic guest experience.
“The unspoken truth here is that business travelers are some of the loneliest people on the planet,” suggested Liebtag. “It’s all about the sense of care, purpose and belonging that business travelers don’t really get at hotels,” said Liebtag. “There’s a higher lever of hospitality with Airbnb."
Travelers' managers might be a tougher sell.
In Skift, travel industry writer Greg Oates ventures that "Airbnb has its work cut out to convince corporations at scale that the sharing economy is a safe, secure and legally prudent option for their employees," but adds that "as much of this has to do with perception as it does with operations and human resources."
With its Airbnb for Business dashboard, and the Business Travel Ready property certification, Airbnb hopes to meet corporate standards for reporting, booking, billing, and duty of care.
At Rocketrip, we've seen many clients reduce expenses and increase employee satisfaction by introducing elements of the sharing economy into their programs. Other companies elect to take a more cautious approach. To learn more about designing a travel policy that works for your company and its employees, check out our post on the Rocketrip blog, and get in touch to schedule a free demo.