Is Airbnb the Solution to Lowering Corporate Travel Costs?

     Airbnb has shaped the way that people travel on a budget.  According to their summer travel report, over 17 million people booked lodging through Airbnb in summer 2015.    While Airbnb travel was never exclusive to pleasure over business, as the demand for improved features catering to corporate travel became more apparent, Airbnb for Business was launched.  This move has gained immediate traction and may shape the overall outlook for corporate lodging in 2016.

     Currently over 250 companies have created business accounts with Airbnb including tech giants Google and SoundCloud.  These companies receive typical perks associated with a corporate travel account including a central billing system, employee spend tracking features, and mobile travel management.  There are two key factors that set Airbnb for Business apart from traditional hotel accommodations.  The first is the reduction in cost.  According to a study by Priceonomics, the average apartment rented through Airbnb costs 21.2% less than a standard hotel room, and the average single room rented through Airbnb costs 50% less than a standard hotel room.  The second perk is the choice of amenities.  Airbnb offers the option of renting single rooms, apartments, or entire homes.  For frequent and extended stay travelers, the luxury of living in a more permanent residence may reduce the overall burden of working remotely.  Many business travelers prefer to have access to a private kitchen, an amenity that can be costly in hotels.  There is also space available through Airbnb to book retreats for multiple employees or group trips, offering common spaces as well as private rooms.

     There are a few disadvantages of renting accommodations through Airbnb, the foremost being safety concerns.  Airbnb has attempted to mitigate these concerns by launching their Business Travel Ready Program which only features whole property rentals equipped with WiFi, toiletries, fire and carbon monoxide detectors, and above average reviews.  The review platform at Airbnb is much more robust than standard hotel reviews.  According to Airbnb, over 80% of their users contribute to these rating statistics compared to just 30% of hotel travelers.

     Another disadvantage is the lack of transparency between hosts and guests.  Corporate booking typically goes through a specialized department on one corporate Airbnb account.  As a result, the host does not have full knowledge behind the guest arriving at their property as it was not booked through an account that has a rating built solely on that guest’s merit.  It can also be difficult for guests to personally review host accommodations after their stay.

     The final disadvantage is the expectation of communication between the host and the business traveler.  Once a request is made to book a property through Airbnb, it can often take over 24 hours for a host to respond.  Time is certainly money in this instances, and for a company that is booking travel for multiple employees daily this extra burden may not be worth the overall cost savings.

     Despite these shortcomings, Airbnb may still prevail in receiving a significant portion of the business travel revenue for 2016.  The discounted prices open up opportunity for employees to take advantage of “bleisure” trips, extending their business stay on their own dime to further explore the location.  For travelers who prefer the safe familiarity of a standard hotel, the extra volume contributed by Airbnb may keep hotel pricing to a minimum.  The overall business model seems to be a win for Airbnb hosts and businesses alike, especially with the announcement of the Marriott and Starwood Hotels merger decreasing competition in the hotel market.