Sharing Economy Sets Sights on Business Travelers -- But Will They Bite?
Beyond a vanguard community of thrill-seeking vacationers and tech-savvy commuters, the sharing economy is now setting its sights on an as-yet-untapped and enormously lucrative demographic: corporate travelers.
Two of the peer-to-peer space’s biggest players, Airbnb and Uber, have announced initiatives to court business travelers -- an industry in which roughly $733 billion was spent globally in 2013, according to market research firm Euromonitor International.
However, on the quest for wider adoption among corporations, questions still linger about how each platform can quell glaring security concerns, including Airbnb’s recent “squatter” scandal and Uber’s alleged involvement in the death of a 6-year-old girl.
Ongoing regulatory clashes that challenge the legality of home- and ride-sharing are also bound to deter businesses from tapping the sharing economy, as well as longstanding relationships that many corporations enjoy with certain hotels and car services.
Nevertheless, Airbnb is now testing the waters.
On Tuesday, the company unveiled a new platform that exclusively facilitates business rentals. It filters out shared listings and offbeat locales (like tree and boathouses) to hone in on Wi-Fi-connected rentals that also boast an “instant-book feature” for ease and immediacy, said Lex Bayer, Airbnb’s head of global payments and business development.
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Hours later, Uber announced a new capability whereby passengers can bill their trips directly to a corporate account.
Both companies also announced partnerships with Concur, a travel expense company whose software enables employees to book travel independently while concurrently populating expense reports in real time so that employers can supervise whereabouts and track spending.
Airbnb Rentals vs. Traditional Hotels
Though the global business travel industry is enormous, Airbnb’s share is currently just a sliver. Only 8 percent of all Airbnb rentals are in the business space, Bayer said. (Euromonitor pegs Airbnb’s global room revenues at $2 billion, meaning that business travel brings in a mere $160 million.)
However, Bayer clarifies that the company’s latest efforts aim not to convert untold masses but to improve the experience for Airbnb’s loyal community of existing users.
Corporate travel has “never been the beginning genesis of Airbnb or how we think of the company” -- though the benefits to businesses using the service, he said, can be numerous. In addition to cost savings, Airbnb offers conveniently-located rentals that “feel like home,” Bayer said, including unique, communal environments that are conducive to team bonding.
But whether these benefits are enough to win over the majority of Boomer and Gen-X business travelers -- many of whom are unfamiliar with peer-to-peer platforms -- remains to be seen, says Michelle Grant, travel and tourism research manager for Euromonitor.
Moreover, hotels offer two huge selling points where Airbnb falls short: loyalty point programs, whose members accounted for over 30 percent of corporate bookings last year, and extensive customer service resources, she said.
If dissatisfaction or disturbances arise, for instance, hotels are typically quick to respond. Airbnb, on the other hand, “is a marketplace and not an actual corporation that you’re dealing with at the other end of the transaction,” she explained. Therefore, the company’s role in ensuring satisfaction is somewhat nebulous.
The Benefit of ‘Open Travel’
Thus far, much of the experimentation with “open travel,” as Grant puts it, has been in the tech sector, where pioneering companies like Google are shaking up paradigms. For instance, the company has introduced a policy where it estimates total travel costs and allows employees to keep any funds they don’t spend.
And the companies that are already using Business Travel For Airbnb make up a veritable who’s-who of Silicon Valley: Salesforce, Facebook, Evernote, Eventbrite and Lyft. Uber For Business pilots currently include Tesla and Gilt, in addition to more established organizations like Deutsche Bank and Barclays Americas.
A wider embrace by businesses across the board could spell huge savings, Grant said. “Some studies have shown that employees are less likely to overspend when they have control of their own reservations,” she explained.
But Bayer, for his part, breaks the travel benefits of the sharing economy down to basic human decency. “Traveling for work can be taxing: you’re away from your family, you feel like ‘is this meeting going well or not?’ -- but it’s a very simple thing,” he said. “We’re all humans in the end. Having a place that feels comfortable and enjoyable just makes you feel better about the world.”