This past March, desperate for a place to stay during the clamorous South by Southwest festival in Austin, TX, my colleague and I turned to a vacation rental. We needed a place in which to collaborate, hold meetings and spend our evenings, and though we paid dearly for it, we ended up booking a loft right across the street from the conference venue. It was a unique solution to a simple problem, and I have no doubt that we’ll look to the service again in the future.
Like many business travelers, I tend to shy away from booking vacation rentals while out on business. The product experience is varied and unreliable; it takes research and effort to find the right venue, arrange for keys and settle in. There is no return incentive; unlike a Marriott or a Starwood hotel, I don’t get points for staying and I can’t accrue valuable benefits that so many business travelers adore.
But business travel is an enormous market segment, and tapping into even a portion of the annual multi-billion industry could be a windfall for agencies like Airbnb. Indeed, Barb Delollis, the former hotel reporter for USA Today reports that AirBnB is cautiously exploring the market. “There is increasing interest for Airbnb for the corporate world,” Marc McCabe, a business development executive at Airbnb tells her. And Concur, a widespread corporate tool for expense and travel management just reported a small uptick in vacation rentals now surfacing on expense reports.
Rental cabins near the Great Smoky Mountains National Park in Sevier County, Tennessee. (Photo credit: Wikipedia)
Still, if the vacation rental industry has grand plans for disrupting the hotel industry, they need to deliver at least some parity for the business traveler. One area that’s critical for many travelers is in the consistent delivery of product.
“Business travelers crave consistency more than anything else,” Chris McGinnis, the editor of TravelSkills and a frequent business traveler tells me. “They don’t want surprises. They love Best Westerns or Courtyards because they know what they are going to get every time. The product may lack local color and experiential pleasures, but there’s little chance of disappointment. I’m not sure you can get that kind of consistency when staying at someone’s house.”
Airbnb counters this by pointing to the variety and depth of amenities that a vacation renter may experience. In the profile from Ms. Delollis, Marc McCabe suggests that the ability to cook meals and do laundry on one’s own terms provides value to a business traveler. Indeed, in many cases the variety of offerings — from bedding to appointments — ranges into areas much nicer than a three or four star hotel. But the lack of regularity and comfort drives business travelers away. If vacation rentals could provide tiered, minimum quality standards for its series of independently own and run properties, it may start to sway some business travelers into its grasp.
Another way by which vacation rental agencies could woo business travelers is through a loyalty program. Current regular business travelers are attracted to elite status and the points that come with repeated hotel stays. They can use these points for later vacations, transfer them to airline miles or even share them with friends — all incentives towards coming back to the same brand and staying a few extra nights. Vacation rentals, conversely, stick to the outdated notion that travelers will never return — so no incentive is needed. Instead, they should look towards their massive networks of properties to drive further traffic, giving even a miniscule bonus for coming back to the site. And they can look further to partner operators such as airlines or even hotel chains to swap points, allowing travelers from other market segments to experience the vacation rental product.
Rental providers can also benefit through increased integration with corporate travel systems. Many current business travelers book travel through company portals or agents, limiting carriers and products that they can search. Once wide integration of rental properties is available through corporate portals — much like Hipmunk currently integrates hotel and vacation rental searches — more business travelers will be able to consider them.
Corporate-booked vacation rentals may get more difficult before they become mainstream though, as more travel managers examine their local policies and draw constraints around lodging. Just last week the University of California issued a statement forbidding the expense of vacation rentals on company travel — and then quickly reversed that decision, perhaps due to outcry. Cases like this will become more common as vacation rentals find their footing in the business travel market — but in the end, sites like Airbnb and VRBO have much to gain.
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