The shared economy and business travel – happy marriage or necessary arrangement?

April 7, 2016

The shared economy is shaking things up in the corporate travel market, and it looks like it’s here to stay. The likes of Airbnb and Uber optimises the changing attitudes, and now practices, of the modern day business traveller. This article explores both sides, for and against the social sharing services and investigates what this means for TMC’s and business travellers alike.

 

shared-economy-business-travel

 

What’s so attractive to business travellers?

There are many reasons why companies such as Airbnb and Uber are now seen as viable options for contemporary business travellers, although the major pull factor has to be price. As Airbnb accommodation is highly concentrated in major cities, it offers a cheaper alternative to major hotel chains. Ease of payment lessens concerns around varying fees – Airbnb’s business model is built on ‘paid-on-paid’ as opposed to a ‘yellow pages’ approach, in that bookers only have to pay when the deal is closed.

For business travellers who enjoy home comforts, Airbnb properties often have the amenities needed to accommodate long-term stays should employees wish to extend their stay for a few days. This also provides business travellers with the opportunity to build rapport with property owners in case of return visits, creating a familiar and relaxed atmosphere where employees can feel comfortable (see our last post for comments on the “Bleisure” trend).

A particular advantage of using a new travel service like Airbnb or Uber is that they are data-led: Every journey or stay is rated, prompting Uber drivers and Airbnb hosts to improve their offering and bookers to choose a service that guarantees the best experience possible. Business travellers are provided with convenience, simplicity and immediacy, and one can see why such services are becoming so attractive with business travellers.

 

Surely it can’t all be good news, can it?

No, it can’t –there are inevitable flaws when it comes using such services. Despite the rise in popularity of non-traditional options provided by companies like Airbnb, many companies are still not allowing employees to stay in such places. According to a survey, taken from 1,500 business travellers by ExpertFlyer.com, 40% of respondents said their company’s corporate travel policy prohibits the use of non-traditional accommodation.

Whilst an Airbnb property may offer a more unique place to stay, with amenities including a fully equipped kitchen, hotels still provide a level of consistency in service that perhaps makes businesses turn to them more often than not. Additionally, rental properties negate one particularly attractive element for business travellers: loyalty programmes. Frequent business travellers welcome the opportunity to take advantage of a free breakfast or room upgrades, none of which can be offered from properties on Airbnb.

Major issues arise around duty of care and risk management; the lack of visibility of off-programme travel booking could cause serious problems should travellers need support from their provider. This low level of control requires corporations to reassess their travel policies and judge the feasibility of using peer-to-peer services. According to GTMC, the customer’s travel insurance can be altogether invalidated, as Airbnb may count as a non-authorised supplier. Should loss or injury arise, insurance policies often fall into blurred lines and liability may be passed onto the employer by default.

 

What about TMC’s?

Companies like Airbnb and Uber are providing a challenge to those TMC’s looking to supply business travellers with a full management solution. Models for hotels and ground transportation are also being challenged, which consequently impacts TMC’s revenues. In turn, this could also affect relationships between TMC’s and hotels or car-hire companies. Simply put, it’s quite plain to see that the sharing economy services aren’t going anywhere fast. Bearing this in mind, future-proofing business travel policies should be high on the agenda as engaging and adapting has to be the way forward.

 

Alexander Arthur
Marketing & PR Executive
01892 673422
CT Business Travel
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