The Sharing Economy Enters the Business of Business Travel

The Sharing Economy Enters the Business of Business Travel
Image credit: Airbnb
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This story appears in the February 2015 issue of Entrepreneur. Subscribe »

On business in Miami, Andy Abramson, founder of Del Mar, Calif.-based marketing communications agency Comunicano, stayed in a high-rise with a spa, pool and a choice of restaurants nearby. The room came with fluffy towels, smart TVs and Wi-Fi. A similar resort would have cost him $400 per night or more, but Abramson found this rental apartment using Airbnb. It cost $180 per night.

“To me, for a few nights, and to save close to $500 in costs and get more, it’s a no-brainer,” says Abramson, who travels some 200 days per year. For road warriors like him, business lodging is no longer the uniform shuffle from one bland corporate hotel to another. The rise of short-term-stay options, enabled by the reservation platform Airbnb, has challenged that norm. 

To better target this lucrative market—estimated by the Global Business Travel Association at $292.3 billion in 2014, up 6.8 percent over 2013—Airbnb launched a business-travel portal on its site last summer, excluding the offbeat options of the consumer site in favor of full houses and apartments. The company says only about 10 percent of its users are traveling for work, but that share could grow with awareness on the part of cost-conscious businesspeople. 

Rocketrip, a travel management platform that tracks expenses and motivates employees to cut costs by sharing the savings with them, recently found that booking through Airbnb instead of hotels saved 41 percent, or an average of $102 per night. 

“It’s often significantly cheaper to use Airbnb than a traditional hotel, not only because the sticker price is less, but because of the many additional and oft-forgotten perks of staying at a house,” says Evan Robinson, a freelance photographer and director who enjoys free parking and the use of a kitchen. “As a photographer, we can also use the Airbnb we rent as a location, a welcome change from setting up makeshift studios for photo shoots in hotel rooms.”

Renters often relish the opportunity to live like locals when they travel for business. Peter Grubb, president of rafting company ROW Adventures in Coeur d’Alene, Idaho, counts on hosts to recommend restaurants and even routes for running. “It makes a place memorable instead of another plain hotel room,” he says. 

Of course, some standard hotel amenities may be missed. Renters generally give up daily maid service, room service and the convenient lobby bar. “There’s certainly a downside to the alternative rentals, which you’re sorely reminded of the first time you forget toothpaste and realize there is no option to dial zero for the concierge,” Robinson says. 

Online photos and reviews provide some measure of information, but renters may need to dig for full disclosure: Is there an elevator? Are there pets? Is it BYO shampoo?

To neophytes, finding an appropriate rental can be time-consuming, given the plethora of apartments vs. hotels. Regular renters advise targeting a neighborhood and important features. “I heavily use filters, so I can quickly whittle down the options depending on budget, availability of internet, proximity to city center, etc.,” says Dave Gill, a Manchester, England-based commercial video producer, web designer and writer. “I can usually find somewhere within 20 minutes of browsing.”

But Airbnb isn’t the only hotel alternative on the market. Traditional bed-and-breakfasts have long made the case for business travelers, touting more amenities such as the morning meal, parking, Wi-Fi and luggage storage, along with the security of staying in a staffed facility. 

Mary White is founder of BnBFinder.com, which allows for searches by location and availability. She says Airbnb is “not a correct use of the term B&B. It’s misleading, but it gives us a chance to talk about what a B&B is. And a B&B will tailor the experience to a business traveler.”

Bottom line

Comparing hotels to rental homes or apartments can be an apples-to-oranges proposition, with numerous factors to consider. But here’s what we found in a general price comparison in a few markets.

New York City
Average daily hotel rate: $252.53

We used Airbnb to search in Brooklyn—a popular base for startups—and found everything from a tidy $70 studio in Bushwick to a two-bedroom in Williamsburg for $155.

Chicago
Average daily hotel rate: $132.89

Airbnb turned up a one-bedroom apartment with a garden in the residential Old Town neighborhood for $100 per night, and a 31st-floor one-bedroom penthouse overlooking the lake in the South Loop for $190.

Austin
Average daily hotel rate: $125.39

For about the same price as the average hotel, Airbnb offers a spacious one-bedroom in a mid-century-modern condo near downtown. A funky eastside bungalow with two bedrooms went for $105.

Los Angeles
Average daily hotel rate: $143.54 

For $129 per night, Airbnb offers a one-bedroom house in Marina del Rey with its own outdoor hot tub. It’s easy to splurge in L.A., where many rentals look vacation-worthy, including a minimalist, design-centric house in a secluded garden near Malibu for $225.

Source for hotel rates: STR Inc.

Edition: December 2016

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