Short-Term Rentals Haven’t Fully Caught on for Business Travel, but They’re Getting There

A number of travel management companies and corporations are starting to allow vacation rentals as accommodations, but there’s room for growth.

A recent Mastercard survey found 53% of those involved in coordinating travel say their companies allow them to book vacation rentals.

Sabre’s Global Distribution System lists over 400,000 accommodations beyond hotels. Sabre also manages corporate booking tool GetThere, meaning those going on business trips can stay in these properties.

“The interest from our agency partners on this segment has been increasing, and we have been selectively adding more supply in this category based on their needs,” a Sabre spokesperson wrote to Skift. “The booking volume compared to hotels is still low, but the growth is encouraging and is in the high double digits compared to the same timeframe last year.”

Corporate travel and technology company BizAway spotted a “noticeable trend of increasing preference for short-term rentals among travelers.” 

A desire for flexibility, which mostly started around the pandemic, has impacted office and corporate travel culture. Vacation rentals could help meet this growing demand as some travelers want to extend business trips or “work from anywhere,” said Chad Wallace, global head of commercial solutions at Mastercard. 

Skift Research surveyed over 50 business travelers who stayed in short-term rentals last year. 

Out of these guests, 58% said they are “very likely” to book another short-term rental in the next year.

The Potential Benefits: Convenience, Comfort, and Cost

Location and comfort for longer stays were the top two reasons travelers opted for a rental. 

“We see that extended stay-type hotels are really popular for travelers that are going to be staying in a location more than three or four days,” said Jamie Lane, chief economist at short-term rental analytics firm AirDNA. “And likewise, that’s why short-term rentals can be popular for business travelers. You can stock a fridge. You don’t have to have every meal out, that sort of thing — and also just having a desk.”

BizAway observed how, among its clients, retail chains sending employees to train staff at new stores have gravitated toward short-term rentals. Companies involved in machinery and construction installations do, as well, “due to the lengthy nature of their projects.”

Some short-term rentals may also be cheaper, another consideration for business travelers. 

“Now, travel managers are adjusting their policies to offer more flexible options to not only meet employee demands for more convenient travel options, but also establish cost efficiencies for the organization,” Wallace said. 

The Divide Between Companies and Travelers

While just over half of decision makers permit vacation rentals on business trips, there is a discrepancy. In that same Mastercard survey, namely 74% of corporate travelers claim their companies allow vacation rentals.

Lane guessed this discrepancy could stem from how some companies “explicitly allow” rentals, while other employers may not outline a clear policy. This data could reflect how many employees are “actually doing it.”

What’s in the Way

Safety, and being able to track employee whereabouts, is a priority.

“As it became more and more popular, companies came out with specific policies against it if they didn’t want it,” Lane said. “And a big part of the decision to not allow it was to not be able to track it.”

Companies use corporate booking tools to keep tabs on their travelers and ensure employee safety. This can prove useful during lockdowns and other events, according to Lane.

“Six in 10 companies also require travelers to comply with certain minimums: use of a booking tool, travel management company, payment card, or all three,” Wallace said. “These minimums allow companies to provide duty of care [encouraging health and safety] to travelers and control costs, allowing the expansion of vacation rental policies to coincide with duty of care responsibilities.”

A potential pitfall of some short-term rentals is reliability.

“If I’m going for a night, I’m staying in a hotel,” Lane said. Time is of the essence.

Business travelers need to know they will get a decent accommodation when booking a short-term rental.

“You’re on business — you’re in and out, you don’t have a second to spare, you can’t deal with a problem. So you need that reliability,” said Airbnb CEO Brian Chesky in a recent interview with Skift.

This can deter travelers from considering rentals. There is more unpredictability, especially with individual hosts.

“There are some additional risks that go along with booking a short-term rental, especially through an individual host — that may not exist as much with if you’re booking through a larger property manager — of what is the quality and reliability that you’re going to get,” Lane said. 

Moving Forward

Chesky emphasized Airbnb’s shift toward “higher quality listings.”

“We have Guest Favorites, which have been hugely popular — two million [of] the best-loved listings,” Chesky said. “And I think the reason I bring this up is business travelers especially have a lower tolerance for error.”

With Airbnb as the most common choice for the surveyed business travelers, the company’s growing focus on reliability is essential.

“They’re sort of trying to call out and really build a brand within Airbnb of, ‘These are the listings that you can know are going to be reliable,’ in the same way that you consider a hotel room to be reliable and not a potential risk of booking for a shorter stay,” Lane said.

The future of rentals in corporate travel hinges on more widespread acceptance by travel managers and booking platforms.

This is something Mint House, a vacation rental and apartment company, still struggles with. At the Skift Short-Term Rental Summit on Wednesday, Mint House CEO Christian Lee explained how the company engages corporate travelers.

While Mint House can stock groceries and partner with local amenities to give guests an elevated experience, Lee said travel managers still need a bit of convincing. He described the back and forth as a “hand-to-hand combat exercise.” Lee hopes legacy systems, in particular, can harness technology to ease the traveler experience going forward.

Sabre is one platform that believes it can expand these offerings even more.

“We have the ability to add more of this inventory type,” the Sabre spokesperson said. “We will be driven by the needs of our travel agency partners, which includes solving for some of the duty of care requirements.”

Source link

About The Author

Scroll to Top