WHAT IS IT WITH SERVICED APARTMENTS?

Talk about alternative accommodation, and everyone thinks you’re referring to Airbnb. While it’s true that the use of disruptive providers – like Airbnb – is rocketing in leisure travel, business travel buyers are yet to wholeheartedly embrace them. The serviced apartment industry, however, is flourishing and we have the stats to prove it.

For the last three years, the Business Travel Show has collaborated with ASAP (the Association of Serviced Apartment Providers) to poll buyers. This year, our survey shows that nearly a third of corporate travel buyers increased their use of serviced apartments in 2018.

This is a huge leap from the 20 per cent who turned to serviced apartments more often in 2017. In addition, it was the only accommodation category to see an increase in use over the last 12 months.

Thirty-five per cent of the 134 respondents said they had used the same amount of serviced apartments as they did in 2017 – up from 25 per cent in the previous year’s survey.

When asked why they chose to book serviced apartments, the number one reason given by buyers was “better value for money”, followed by convenience of the self-catering option, more space, flexibility to experience the location like a local resident and long-term suitability.

Kat Hendry, Business Travel Show account manager, below

Buyers are also allocating a higher proportion of their budget to serviced apartments; 77 per cent spent less than 10 per cent of their budget on the accommodation option – down from 90 per cent in 2016. Meanwhile, 17 per cent allocated 11-25 per cent, compared to just 7 per cent in 2016.

For the first time in the survey’s history, a small number of buyers said they allocated 51-100 per cent of their budget to serviced apartments, with 1 per cent claiming to spend their entire accommodation budget on this option.

The number of buyers who didn’t use serviced apartments dropped from 42 per cent in 2017 to 32 per cent in 2018, whereas the proportion not using sharing economy accommodation options such as Airbnb rose from 38 per cent to 45 per cent. Furthermore, the number that haven’t used five-star hotels also went up slightly from 28 per cent to 31 per cent.

These are pretty extraordinary statistics that prove the industry is making considerable headway in raising awareness of serviced apartments as valid and valuable alternative accommodation for business travellers. Not only are more buyers aware of serviced apartments as an option, they also appreciate the pros they offer to their travellers and are much more open to including them in their travel programmes.

They also reflect the ongoing pressure on buyers to cut cost and display improved ROI on travel spend as well as the desire from younger travellers to enjoy the flexibility provided by alternative accommodation providers.

We asked ASAP’s CEO James Foice what he thought of the results. He pointed out how the landscape is rapidly evolving for the serviced apartment sector and how ASAP is also seeing a significant increase in supply year on year. In 2018, he said, they found that more and more companies are booking two-bedroom or two-bathroom apartments, as colleagues will often share the apartment, making it a more cost-effective choice as well as giving employees working away from home some companionship. A two-bedroom option also provides privacy and collaboration space under one roof.

We host the ASAP Pavilion at Business Travel Show, so if it’s a sector you are yet to investigate, come and meet a few them in February.

This post was written by Business Travel Show account manager Kat Hendry -kat.hendry@centaurmedia.com @kathendrybts. The Business Travel Show is the leading event for corporate travel in Europe attracting over 9,000 professionals and 260 exhibitors. Taking place from 20-21 February 2019 at Olympia London, the show is celebrating its 25^th anniversary.

The Personal is Now the Professional: Is Your Corporate Travel Policy Ready for Airbnb?

There’s a clear disconnect between what more and more business travellers want and what corporate travel managers are providing. Demand for using the sharing economy for business purposes is clearly a major trend in corporate travel, but companies are not keeping pace.

In January 2017, the Global Business Travel Association (GBTA), in partnership with American Express, published the “GBTA Business Traveller Sentiment Index, Global Report,” showing that more corporate executives have been using sharing economy services more often in the last year. However, while companies are adjusting their policies to allow usage of ride-sharing services, they seem to be more reticent when it comes to home-sharing.

The GBTA survey indicated that approximately 50 per cent of corporate travel policies now allow ride-sharing services such as Uber or Lyft. That’s a hefty increase from GBTA’s mid-2016 report, which reported 44 per cent of company policies approved ride-sharing. Over that time period, business travel ridership increased 21 per cent. Nearly 20 per cent of those who responded said they expected to use ride-sharing more in the next three months, while 71 per cent anticipated using it with the same frequency.

Home-sharing options like Airbnb gained ground over the six months between the two surveys, as well. Thirty per cent of policies allowed home-sharing in January 2017, compared to 28 per cent in June 2016. However, while corporate adoption of home-sharing rose only two per cent, the GBTA research states that the use of alternative accommodations among business travellers jumped 20 per cent.

Jeanne Liu, VP of research for GBTA, attributes the rise of interest in sharing economy services for work-related purposes to the growing familiarity of them among travellers in general.

“I think what we’re seeing is what we’re calling the ‘consumerisation of business travellers,’” she says. “It’s what you do in your regular consumer life. If you use ride-sharing and home-sharing, or if there are certain apps you like to use, it’s going to go into how you plan and how you pick your options in business travel as well.”

Although, Susan Chapman Hughes, senior VP of American Express Global Commercial Payments, cautions that travel managers need to better explain how sharing services fit into their company rules and regulations, because there seems to be some confusion.

“The sharing economy trends that have come to define personal travel are now significantly influencing business travel as well,” she explains. “However, nearly one in five travellers are still unsure whether their employer’s policies allow for sharing-economy services, making it especially important for companies to communicate clear details about the services and amenities that their policy covers.”

Supporting that, the online travel management company, Certify, published “SpendSmart Report on Business Travel Spending Trends for 2016” in January 2017. Certify’s 2016 data shows that Airbnb ended the year with a total of .27 per cent of expenses and receipts in the hotel category overall. While still under one percent of the total, Airbnb’s growth is significant in this context based on comparable business travel bookings among traditional accommodations.

In terms of their percentage of total business travel expense reporting overall, the top 15 lodging brands range from Hampton Inn at #1 (8.82%) to Residence Inn in 15th place (1.18%). Assuming a similar or slightly improved growth rate among business travelers booking Airbnb, Certify expects the home-sharing platform could approach the top 15 most expensed accommodation options within the next few years.

“Business travel got a lot more personal in 2016,” says Robert Neveu, CEO of Certify. “The growing preference for sharing economy services like Uber, and to a lesser degree, Airbnb, really underscores the trend toward consumerisation of traditional corporate travel. Advances

in personal technologies and travel-based smartphone apps have made it easier for business travellers to choose the experiences and vendors they prefer. And the companies they work for are following suit with expanded travel policy guidelines to accommodate new services and payment methods.”

Join Airbnb at the Business Travel Summit Amsterdam, 26-27 September at the Rai Conference Centre, by registering here. Don't miss Global Head of Business Travel, David Holyoke, who is speaking at 14:00 on 27 September.