Globalization, the digital revolution and shifting market demands are forging new pathways in corporate housing
By Harvey Chipkin
“The evolution of overnight.” That’s what Matthew Hostetler, senior vice president of Red Roof, calls the changes on every front in the corporate lodging/extended stay market. In an attempt to keep up with those changes, the recent Serviced Apartment Summit in New York saw representatives of traditional corporate housing providers like Oakwood and Furnished Quarters, OTAs like Booking.com, startups like WhyHotels – which creates pop-up hotels in new luxury buildings – and homesharing companies like Airbnb working side by side to figure out where the industry goes next.
With the globalization of lodging and the ubiquitous presence of mega-players like Marriott, Hilton and Accor, there is still very much a bifurcated landscape when it comes to extended stay – with the tradition of serviced apartments continuing to dominate outside the US, while extended stay as it was invented and evolved here prevailing in this market.
Whatever it’s called, the extended stay/corporate lodging segment continues to grow as evidenced by the proliferation of new brands and the entry into the market of venerable brands like Red Roof with its HomeTowne Studios.
The changes in how to book and manage corporate lodging, however, are blurring those differences – or at least making them easier to deal with through disruptive technology and multi-platform booking channels. There is further crossover as players learn from one another – so typical American extended stays are moving onto other continents while European products like hostels and co-living take hold here.
The international expansion of extended stay, says Rick Colling, global head-Homewood Suites by Hilton, is making more travelers familiar with this option in their own backyards. His brand debuted a Latin American prototype to meet growing demand for the product in the region. And recently, InterContinental Hotels Group signed a contract to convert two properties in Dubai into Staybridge Suites, extending the brand’s reach in the Middle East.
Big brands are putting boots on the ground internationally. Colling says Hilton has stationed hundreds of sales professionals around the world to ensure that travel managers have a resource close to home to direct their clients to the correct Hilton property. These teams, says Colling, cover more than 100 countries and conduct business in more than 40 languages to cut through the clutter and engage with potential customers conveniently and with knowledge of the dedicated regions that they service.
A spokesperson for Airbnb says challenges to adapting to a new community account for up to 40 percent of failed international assignments. The spokesperson says Airbnb is “perfectly positioned” to handle that problem since its portfolio immediately grounds the traveler into the community.
Meanwhile homegrown options are aiming to beat the competition with superior products. The Levee in Tel Aviv has just eight apartments but aims to offer high design and top-of the-line appliances so that, according to CEO Golan Tambor, “once a guest stays with us a standard hotel room will never compare.”
Churning Channels The traditional avenues of booking and managing corporate lodging are being disrupted rapidly as aggregation sites seek to make it easier to book extended stay anywhere in the world, in real time, and with extensive content to help travel managers make decisions.
Significant efforts are being made to offer every option as transparently as possible. For example, a company called AllTheRooms.com lists everything from “a couch to a castle” on its site, with far more lodging options than OTAs.
It’s often a challenge for hotel chains to efficiently distribute their extended stay products to corporate travelers, says Yon Abad, vice president suppliers for RoomIt by CWT. Booking channels have limits in terms of the number of nights that can be booked, making traditional channels not always appropriate to manage the requirements of a long stay transaction. He says many technology companies have recently created platforms more adapted and user friendly to distribute this kind of content.
Victoria Yanakos, executive vice president of sales for Furnished Quarters, says the number of new suppliers entering the serviced apartment space has increased. But many are not adding inventory; instead they aggregate the inventory of other providers or individuals. “This is a marked shift in our space,” she says.
The channels used for traditional transient bookings, such as hotel websites, are not as effective as those designed specifically to procure extended stay accommodations, explains Rajeev.
Goswami, CEO of WW Stay. As a result, more extended stay bookings are being made through sites with a focus on extended stay search and selection capabilities. WWStay has developed technology specifically to sort through all the possibilities, Goswami says, although it does not offer homesharing options.
Among the questions Goswami says the technology addresses: Does the traveler need to be within walking distance or are there public transportation options making other locations a possibility? Does the traveler demand an on-site exercise facility or is it satisfactory to have a facility available down the street or near their workspace? Is a full kitchen a requirement? Is a high rise building desirable? These and other factors go into the analysis to recommend the optimal choice. Traditional booking methods, Goswami notes, are not set up to analyze all these important selection factors.
BridgeStreet, once a major player in providing corporate apartments, has shifted to becoming an aggregator itself. Brian Proctor, COO, says extended stay subdivisions of major brands seek out distribution platforms like his to get greater access to business travelers who require longer lengths of stay and who, by the nature of corporate travel budget constraints, are forced to do more diligent comparison of prices for accommodations.
According to Kamal Advani, BridgeStreet’s new CEO, with the continued strength of intermediaries and all-encompassing online resources like BridgeStreet’s Six Ways to Stay booking platform, it’s becoming easier for travel managers to compare select properties based on filters such as price, accommodation style, location and a host of other factors. Comparison shopping is much easier than it was even a few years ago, Advani says, when travel managers had to sort through options from many different sources, “and might have missed the perfect accommodation altogether.”
The Six Ways to Stay platform, says Aaron Turner, CTO for BridgeStreet, allows companies to do their own corporate branding via a white label version, and can set parameters within the system that controls which employees have access to it for self-booking, budget limitations and compliance with travel policies. The platform also features all properties in one forum for easy comparison and real-time bookings.
In the face of the changing channel landscape, Reside Worldwide has evaluated and developed tools to assist clients with their changing needs, says Jon Wolfert, co-CEO. Imbedded in its 3SIXTY Platform are a number of tools that allow real time options in both the traditional and alternative lodging sectors.
Reside’s goal is to aggregate and curate the best alternative and traditional housing options to fit clients’ evolving needs. Lee Curtis, co-CEO of Reside Worldwide, points out the company has a direct booking tool which allows clients access over 125,000 accommodations options globally.
And there’s always the personal touch, says Tambor. “We've taken cues from traditional hospitality to make sure in-person support is present on site, and guests can always know that The Levee has their best interests as a priority.”
Transactional Challenges Alternative lodgings are moving quickly toward immediate confirmation and other “normalizing” technologies. Goswami says that while direct communication with a potential supplier is sometimes required, the company has a goal of keeping these supplier interactions to a minimum.
Traditional corporate housing has often been the victim of its own benefits, says Yanakos. For instance, the immense flexibility it offers with lease extensions doesn’t work well with live booking platforms such as global distribution systems. Some providers have solved this, she says, by setting defined start and end dates and taking away the ability to extend a stay.
Other providers like Furnished Quarters, which holds its own inventory year-round, are able to offer flexibility with lease extensions when needed and real-time booking when convenience is paramount. By controlling the inventory, says Yanakos, “we’re able to adjust our availability to satisfy both needs, which is unique and welcomed by corporate travel bookers.”
It’s important, says Abad, to distinguish extended stay from sharing accommodation platforms as these terms are often used interchangeably. The sharing accommodation platforms, he says, add another set of items to be considered, such as safety and security, clear company policies, accessibility, integration into corporate booking tools among others.
Even with all the disruption and evolution in the industry, says Abad, challenges remain, including better integrating the product with the corporate travel community and processes, especially with booking tools and TMCs that have corporate traveler trust.
Tambor says non-traditional lodging is becoming more relevant for travel managers with the creation of new purchasing software such as Stripe (a payment solution) or even PayPal. “We live in the year 2019,” he says, “so non-traditional lodging operators should have that all figured out by now.”
And a spokesperson for Airbnb itself says that Airbnb for Work provides a suite of tools for travel managers to help employees book and stay with Airbnb. These tools are provided to help managers gain more transparency into the entire employee travel experience. And with Airbnb, says the spokesperson, both the traveler and travel manager can research potential places to stay, see photos, read reviews, etc.
Getting Communal Even as there has been a melding in distribution of the extended stay, the product itself seems to be transforming into a universal ideal as it duplicates changes taking place in traditional hotels – particularly around the idea of larger and more vibrant public space.
While the emphasis in extended stay has been on larger and better-equipped rooms, says Colling, travelers are looking for lobbies to serve as intimate social hubs with plenty of space to socialize but also spaces to read or work outside the rooms.
Homewood Suites by Hilton recently completed common area updates of all of its domestic legacy properties through the Take Flight design program. Thanks to the renovations, guests now enjoy outdoor kitchens, an upgraded dining area and more connective interaction with fellow guests with modular seating and inviting nooks for solo work or group gatherings in the lobby.
Additionally, Embassy Suites by Hilton is transforming the brand’s open-air atriums into more intimate spaces, with several legacy properties completing an Atrium Refresh. Through this process, some hotels are also including the brand’s new food and beverage concept, the fastcasual E’Terie Bar & Grill, while new construction hotels are incorporating the sitdown restaurant experience through Brickstones Kitchen & Bar.
Goswami says extended stay accommodations are changing to meet the demands of the traveler desiring a “home-away-from-home.” As a result, accommodations tend to offer more amenities and luxuries than in the past. There are more fitness centers, and more locations with greater access to shopping, dining and entertainment options.
Travelers want options – to eat in their “home” or at one of a variety of restaurants, to stay in and watch television or stream a show or attend an entertainment event at a nearby location.
Co-Living and Co-WorkingHostels and other co-living accommodations are being adapted into corporate-standard accommodations, according to some observers. Advani says that alternative accommodation types like “design-led hostels” are gaining traction in the extended stay sphere, in particular for younger group business travelers, like intern groups and project teams.
For all accommodation types, he says, urban lifestyle addresses are the destinations of choice, because today’s travelers – of all ages – want rich, life-work balance experiences and to live like locals. “They’re not just searching for a place to rest their heads at the end of each workday on a faraway assignment.”
While living rooms, kitchens and other common areas within co-living properties are shared, says Advani, each traveler still has a private, secure room. This arrangement benefits teams traveling together and is also attractive for solo business travelers who are interested in meeting new people to maximize the experience of “living like a local” in a faraway, unfamiliar location.