Being in that sweet spot shows up in the numbers. According to the latest report from hospitality industry consultants The Highland Group, US corporate housing revenues increased 10.2 percent in 2016 while average daily rates (ADR) rose 6.3 percent in 2016 over the previous year, the strongest growth in ADR since 2011. By comparison, upscale extended stay hotels reported a 2.6 percent gain in 2016 over 2015.
Real Time Bookings for Real
Among the important differences between the corporate housing and hotel industries is the difficulty of booking corporate housing accommodations in real time. Fluid inventory and other variables make instant bookings a challenge.
However, the industry is moving toward the hotel model. According to Lee Curtis, president of corporate housing provider Aboda, “Our business models are different as we are not sitting on lots of inventory like hotels. However, there will be opportunities to book real time.”
Craig Partin, chief sales officer for Furnished Quarters, says, “We are all trying to come up with our version of a global distribution system and we will start to see this in the next 12 to 18 months. We are 20 years behind the hotel industry but we will converge with their model.”
While conceding that there are a lot of ‘intricacies’ that make corporate housing more complex – like guests who decide to extend their stays – Partin still believes that these issues can be worked out. “The end goal is to have live reservations in properties where we have a volume of apartments. If we have only one apartment in a building, that might not be possible. But even then, we are all trying to shorten the booking cycle and take it to a more automated state.”
BridgeStreet Global Hospitality recently rolled out “the first direct to corporate real-time booking platform,” notes C.A. Anderson, senior vice president of global development and real estate, allowing corporate clients direct access to available properties without the assistance of a guest service center.
Calling BridgeStreet a “travel tech company,” Anderson says the technology is being extended to corporate housing partners through the Simplified Network Apartment Platform, or SNAP. BridgeStreet clients can access available inventory of supply partners, book a unit and receive a confirmation instantly.
“Our ultimate near-term goal is to have every supply partner and all the BridgeStreet assets up and available by the first quarter of 2018,” says Anderson.
Corporate clients can use individual portals specifically designed for their staff, travel managers and vendors so they can book directly through BridgeStreet.com outside of the public access website, Anderson says. The portal will direct them to previously approved properties at the negotiated rates.
Technology Beyond Booking
As they work toward GDS-style technology, long-term lodging providers are not ignoring other technology advances. Rajeev Goswami, CEO of WWStay, an aggregator of corporate housing, says his company is using a chatbot in initial responses to customers, as well as artificial intelligence in data reporting.
“We are investing in chat and AI to improve and streamline the booking process. We see chat as a major opportunity area to serve our clients,” Goswami says. In general, he adds, corporate housing had been rigid in some of its practices, but was now “opening up.”
At Oakwood, according to TJ Spencer, vice president-global sales, the brand’s app provides guests with their reservation information, allows them to submit service requests – including the ability to upload photos – provides maps and information about the area and more.
For travel managers, says Spencer, Oakwood’s proprietary online portal, EPIC, “is evolving from a back-end tool to a client-facing tool with a personalized portal that allows clients to submit requests for housing with customizable criteria, receive multiple responses and confirm their choice from either their desktop or mobile device.
“We make our inventory bookable through a variety of channels, including our proprietary websites, online travel channels and GDS,” says Spencer. “Our business is designed to be flexible and adapt to our clients’ needs, sometimes within very short time periods.”
At Airbnb, Jenny Bulgrin, who is manager, corporate mobility strategy, says listings are now searchable in Concur Travel, which marks the first time Airbnb listings are being surfaced in a corporate booking tool. “We’re already seeing interest from companies like Autodesk, Box and Salesforce about bringing this functionality to their employees via Concur,” Bulgrin says.
Increasingly Flexible
The basic corporate housing product – an apartment – is also changing to become more than simply a high-end unit with a kitchen. “We operate a multi-dimensional product that is able to meet the rapid growth of companies like Amazon,” Curtis explains. “Just one style of housing does not fit all. We have to offer everything from student accommodations and micro-apartments to a hotel hybrid. When you’re dealing with interns, a big segment in the summer, you can’t just find 2,000 apartments for 90 days. You have to be creative by, for instance, working with colleges to use their dorms.”
Long-term lodging providers feel they need to step up the product and service to compete in an increasingly complicated marketplace. Says Goswami, “We have a 24/7 service center that has employees empowered to make decisions and assist our guests throughout their stay, something like a remote concierge. And this is one way we provide similarities with the hotel experience.”
Oakwood’s TJ Spencer points out a new property in Los Angeles called Oakwood Olympic & Olive, which offers a resort-style pool, community business lounge and a fitness center. “We’re able to work with companies to ensure that workers’ needs are met,” says Spencer.
“For example, housing a company’s employees in the same property as other employees allows them to take advantage of the building’s public and co-working spaces for after-hours gatherings,” which he says, “may be a mixture of work and pleasure.”
Anderson turns all this on its head, saying, “the hotel model is moving to a more BridgeStreet-like experience,” dispensing with cookie-cutter product and moving toward a “vast array of product locations and types.” Anderson adds, “Today, hotel brands are seeking to provide unique experiences by city and product rather than that ‘sea of sameness’ that Kemmons Wilson created with the Holiday Inn brand. BridgeStreet has programs that interface with the guest to achieve a localized experience.”
Anderson explains that Oakwood has curated local experiences in each city for each property. “Guests have access to local restaurants, running trails, walking paths, nearby attractions and unique experiences. Our corporate traveler is seeking diversity rather than sameness over their extended stay, and that is what we provide in a safe, clean and home-like environment.”
Shared Economy: Drives Awareness
“The Airbnb phenomenon is about awareness,” says Adoba’s Curtis. “Airbnb is not a place, it’s a platform. The place is where you stay but because more people have gotten comfortable about finding apartments on these platforms, travel managers are more receptive to looking at corporate housing as an extension of the shared economy universe.”
But Curtis also maintains, “We stand alone as an industry because we offer the safety net of a corporate housing company offering professionally managed and vetted lodging. You don’t have to worry about what it might look like when you get there. Because of the shared economy we have an opportunity to magnify our offering to attract people on the edges of the shared economy.”
Goswami agrees, explaining, “The shared economy has definitely popularized serviced apartments, though we only work with professionally managed properties. Even our partners are taking cues from the shared economy and are trying to factor in elements such as creating ‘social experiences’ by having common meeting places and giving suggestions of local attractions.”
There is no question that shared economy options are a source of competition. “We have to be mindful,” says Curtis, “that within Airbnb is a group of professionals who will organize themselves and potentially compete with us. What it does is force our industry to be wary of getting stagnant with what we offer.”
That means understanding what draws people to the Airbnb platform. “It might be that our product would fit in with Airbnb, HomeAway, MyKey and others,” says Curtis. “At the end of the day, they are apartments.”
At Airbnb itself, says Bulgrin, the average stay is five to six nights, twice that of a hotel; and 15 percent of nights booked on Airbnb are for business travel. She says the platform is positioning itself as a supplementary option for companies when inventory is limited in certain cities or when travelers are looking for certain amenities.
“We’ve also seen a trend of group offsites/onsites,” says Bulgrin. “For example, a company might send a team to Lake Tahoe to bond and work for a week; with Airbnb for Business, they can rent a large cabin and stay together. Also for relocations – especially with families and pets – people want to stay someplace that feels like home, when everything else is unfamiliar. They want to test out the neighborhood and school district they're eventually going to move to.”
A Focus on Fun
The emphasis on experience means a need to create a sense of fun. Yes, fun. It’s a word that would not have been used 20 years ago in describing corporate housing, says Curtis, but now it joins “cost-effective” and “high quality.” Companies are looking for “fantastic social spaces, amenities like courtyards and barbecues.”
“There are certainly product drivers that are based off generational aspects,” says Partin. “Millennials typically like to have shared spaces where they can hang out together and have work spaces. You are seeing properties with lounges and game rooms. Newly built properties are designed for people who will not be spending all their time in their rooms.”
A nice corporate apartment is a given, says Partin, but customers now expect a lot more – like good service, lease flexibility and a turnkey experience. “You walk in with a suitcase and you have everything you need. And we can offer perks like Uber rides, Fresh Direct grocery delivery and dog walking. And that can be ratcheted up for VIP customers with white glove services.”
At Oakwood, says Spencer, Oakwood Studios Singapore and Oakwood Premier OUE Singapore offer tech-enabled spaces that complement the technology-driven lifestyle of residents. For example, landlines have been replaced by smartphones, and an in-room tablet with the Oakwood app is provided so residents can request in-house services with only a finger-tap. The Oakwood app also provides links to locally-chosen restaurants, as well as bars, late night dessert bars and parties.
The Travel Manager Piece
With all these monumental changes, travel managers are seeing their own roles in long-term lodging evolve. Curtis says he is beginning to see travel managers get more involved as they figure out how to harness business travel and mobility (relocation) into the same bucket.
“Synergies would be gained by putting those things together,” says Curtis. “Because of that convergence I run a hotel program. If you were moving to Seattle, I could put you in a hotel for three days and then an apartment for a month. I outsource the hotel program, but we are able to leverage our large spend to drive rate and ease of booking.”
And travel managers have to monitor emerging factors that have an impact on long-term lodging needs. Partin points out that travel managers are dealing with some new situations, like political issues around immigration.
“Sometimes it takes longer for someone to enter a country and that means we have to be fluid with lodging. The process is often taking longer, late arrival dates are more common, and there may be sudden changes in the information required by the parties involved. Corporations are reacting to these changes as quickly and effectively as they can, and so are temporary housing providers.”
Corporate housing providers are working to build on their advantages in a variety of ways, including, as Goswami says, “being much more than just a booking engine.” He explains, “Corporations need multi-faceted experiences on the single platform – booking, flexibility of payments, leasing and documentation, post booking support in case of problems during stay, integration with the corporate eco-system and duty of care systems.”
Goswami sums up the future for corporate housing this way: “As technology continues to evolve we must remain adaptable and constantly look for ways to assist and enhance the booking experience. The key is leveraging technology across various functions like sourcing, curation and enhanced service. We constantly seek to innovate to improve experience because experience design is the key.”
