It’s a trend often attributed to the rise of Airbnb. But while long-term stay accommodation providers have existed for decades – and many hotel chains have had long-stay brands for years – the traveler’s expectation of diversity, uniqueness and local feel has also played a role in the evolution.
“While Airbnb often gets the credit, I believe that the evolution and ease of technology blended with accessibility have really been the drivers,” says Lee Curtis, founding partner and CEO of RESIDE Worldwide, Inc. “It’s ironic that platforms like Vacation Rental by Owner (VRBO) have been around since 1995 (and then merged with HomeAway in 2005), but it took Airbnb launching in 2008 before the conversation around alternative accommodations really became mainstream.”
Additionally, Curtis believes this blurring of lines has not been limited to just the physical product, but to how and why people travel.
“The so called ‘Biz-Leisure’ segment is a growing travel segment and non-traditional platforms from the vacation rental industry such as Airbnb and others have made it much easier to consider and utilize very different forms of housing,” he says. “These options can be both cost effective and lifestyle oriented and offer the traveler a much more diverse range of options.”
An Evolving Strategy
Yon Abad, VP suppliers for RoomIt by CWT, says the company is seeing a greater appetite for corporations to control their spending in this space, and at the same time, provide more choice and a better booking experience for their travelers.
“Corporations want to ensure they will benefit from the same TMC services for this segment – customer support, reporting, duty of care, etc.,” he says. “Our mission is to provide our clients with the hotel content they require. We identified and recognized this need and worked to provide a solution for our clients.”
With that in mind, RoomIt now partners with a third-party specialized in these types of accommodations. “Based on our customers’ requests, we have designed a solution that easily gives our customers access to long stay housing, while providing seamless booking and payment experiences, as well as the traditional TMC services, such as support, reporting and duty of care,” Abad says.
Now more than ever, business travelers are interested in more space alongside value-added amenities and homelike touches all at a cost-efficient price-point, according to Adrian Kurre, global head, Home2 Suites by Hilton. “The extended stay model has always been a popular option for business travelers, but in order to remain that way, we must continue to adapt, develop new amenities and enhance the ones we already have,” he says. “One trend that we continue to see is the rise of ‘bleisure’ travel – the mix of business and leisure in the same trip.”
That’s why Home2 Suites by Hilton, and its sister extended stay brand, Homewood Suites by Hilton, have made changes to the long-term lodging strategy. Both now offer free breakfast with an abundance of healthy options to choose from. Homewood Suites by Hilton properties offer a 24-hour fitness centers and most locations also have a pool; and these properties offer a complimentary grocery service so guests can choose to cook healthy meals in their fully-equipped kitchens rather than eat out or order in.
Victoria Yanakos, executive vice president, sales for Furnished Quarters, says abundant choice and access to diverse inventory can be a benefit to one firm when it aligns with the company’s culture and overall objectives, and a challenge for another.
“We see some companies very receptive, while others are seeking more traditional housing programs for reasons like cost containment and duty of care,” she cautions. “Our strategy has been two-fold. We both participate on these sites when it makes strategic sense, but likewise compete against others. We are very selective of who we partner with to offer our inventory outside of our direct clients.”
RESIDE purposely built its technology, supply chain and systems to be B2B friendly, Curtis explains, not just for the guest, but also for the travel managers and those tasked with managing a large traveling workforce.
“We are the only company that has merged existing global compliance software into our sourcing platform to meet the duty of care and compliance needs of our customers. But most of all, we have done this to give our clients peace of mind when using these new styles of housing options,” he says. “We have painstakingly designed our apartments and homes to be comfortable, stylish and functional and are continually ‘in the lab’ looking for product options that will stay ahead of the business traveler’s needs.”
Rajeev Goswami, WWStay’s co-founder and CEO, thinks this is an exciting time for corporate travel and the company is prepared for the changing traveler. “We changed our focus years back, investing more in technology and expanding more in different countries,” he says. “We found people want more space – a home away from home. They want amenities that make travel easy.”Enticing Features
Abad notes extended stays are more enticing than traditional hotels when the traveler is seeking an accommodation with more space and more convenience, such as a kitchen and parking in some cases.
“This ultimately helps drive travel costs down as travelers don’t need/want to eat at the hotel restaurant for every meal, they can do their laundry and not use costly hotel laundry/dry cleaning services,” he says. “Additionally, long stays are continually becoming more business-friendly by offering WiFi, more locations and an easier booking experience. For short-term stays, there can still often be a good alternative to hotels, for example when hotels are sold out during a convention.”
The lifestyle and choice options have actually been the appealing features, Curtis says, since many business travelers have grown weary of the proliferation of the hotel brands. “There are over 280 brands today, most of which are a copy of a copy of another brand. The business traveler of today is much more savvy and no longer needs a hotel brand to tell them how to stay; they want to design their own stay,” Curtis maintains.
“This is the allure and frankly, the fun factor of alternative accommodations,” he continues. “Think of it as hundreds of thousands of boutique hotels in unique locations throughout the world; each one unique and special in its own way.”
Tech Talk
Another big evolutionary change the industry is going through is the development of personalized technology.
For example, Kurre points out that the Hilton Honors app lets guests select their exact room from a digital floor plan. It also acts as a Digital Key with which they can then access their room upon arrival.
“Additionally, Hilton now offers Connected Room and is in the process of bringing it to each brand in the portfolio including Homewood Suites by Hilton and Home2 Suites by Hilton,” he says. “This high-tech hotel room allows guests to control everything including in-room heating, lighting and A/C all from their mobile phone.”
Yanakos notes what’s interesting about the lodging space is not necessarily the diverse inventory options, but the technology that is bringing these options to the forefront. While there have been disruptors in the space that have spurred change in the industry, she feels it is also the natural evolution of technology impacting buying behaviors and the priorities of the buyers themselves that has brought about the biggest change.
“If you think about it, the idea of staying in someone’s home, or in a furnished corporate apartment while travelling always existed. What we didn’t have was the technology to gain easy access to those options,” she says. “And it’s not just the out-of-the-box options that are enabled by technology – it’s also the more traditional housing choices like hotels and corporate housing that are reaping the benefits from the exposure on aggregating sites.”
Looking ahead, Goswami says long-term lodging will become more and more managed as hotel providers start offering more technology to make it easier.
Benefits to Corporations
When booking business travel for their employees, corporations are always looking for hotel companies to work with that can give their executives the most choice when it comes to location, price point and amenities. In the alternative accommodations space, corporations see an opportunity to drive savings through the rate itself, but also through all the additional expenses related to a business trip.
“Of course, continuing to centralize bookings provides them opportunities for consolidated reporting to drive more control over their spend, using all of the other offers of their travel management services and duty of care,” says Abad.
Curtis says the benefits to a corporation can be that they can create a curated travel program that gives their employees the options they are looking for and also save money and create efficiencies.
“A happy traveling employee is both more productive and loyal, and in this very tight labor market, any edge to hiring and retaining is not just important – it is critical,” he says. “However the caveat here is that unlike hotels, the regulatory environment has not fully been defined and there are many companies jumping onto the bandwagon right now that do not truly understand the importance of duty of care and compliance in the realm of business travel.”
Curtis notes providing the value-added amenities and homelike atmosphere that business travelers want is another important part of continuing to win the loyalty of business travelers.
“Hospitality is a competitive industry, constantly changing and growing. As the number of travelers continues to increase, so too do the companies looking to serve them,” he says. “Given that, it is no surprise to us that we are seeing more and more long-term lodging options being offered.”
