Hotels Are Now Less Cost Effective Than Rentals for Business Travel, Says New Report
Lisa Calhoun, General partner, Valor Venture, Published by Inc.com on April 27, 2018
For business travelers, the fight is heating up between hotels and home rental companies like Airbnb, VRBO/HomeAway, Vacasa, Flipkey, Wimdu, Innclusive and others. In part, it's thanks to a report from AirBnB released yesterday. It claims that the federal government, which spent $3.1 billion last year with hotels, and almost $2 billion of it with just 5 chains, could save taxpayers $413 million by staying with Airbnb.
Mega hotel or micro?
The report reads, "Money spent housing federal employees at Airbnb listings while traveling on official business would go directly to taxpayers who share their space on Airbnb. In addition, the federal government would also more directly support U.S. communities." Going for the heartstrings there.
Hotels are seriously against. They shot back a spicy statement through the American Hotel and Lodging Association, scooped by Ina Fried at Axios:
"Airbnb's sponsored study is nothing more than a ginned-up collage of misleading statements and doctored stats in [an]attempt to get a piece of the government travel business."
AirBnB points out that hosts keep most of the money they charge for their home, so "federal resources would be delivered directly to taxpayers rather than major corporate hotel chains that often send their profits to headquarters and investors overseas."
There's certainly plenty of punch in the arguments from both sides. The fact that the debate between hotel and rental property has gotten to this point sure validates the opportunity to broaden your options. Business Insider conducted a 2016 study that showed Airbnb was significantly cheaper than hotels in the northern U.S. and in Europe. For myself, I stay more often in typical business hotels because the cleaning fee can overpower my usual stay: one night. However, when I'm staying a few nights, nothing beats finding a home base in the center of the action at a rational price. There are people I try to stay with again and again on AirBnB. As a solo female traveler, I've had some interesting experiences--but never a bad one.
Home rental is a surging for business travelers.
According to CBRE, Airbn has at least 10% of the available rooms in all 10 of the largest U.S. cities, plus they "appear to be adding units at a substantially faster clip than the U.S. hotel industry." Inside the industry, some hotel suppliers--like Abundle, which does robes, sheets and amenities--are now specifically courting the vacation rental owner as a source of new income. Twenty thousand rental owners a month share information on Vacation Rental Marketing Blog, created by travel expert Matt Landau.
I reached out to Andrew McConnell, founder of Rented.com, a company I invested in that helps connect rental homes and professional property managers. He shared in email that business travelers using vacation rentals "is the fastest-growing within travel, creating a gold rush of new, professional, and often highly capitalized companies pouring into the space to take advantage of the increased demand for something more and different than your typical hotel. The upshot for the traveler is that the standards are rising, even as the prices remain highly competitive."
The trend is it's getting as easy to book a rental home as it is to book a hotel room.
With more homeowners deciding to get help from professional property management, I'm finding the experience is also trending more toward seamless and standard. You can still find a funky treehouse, a houseboat or a yurt--but you can also find tons of crisp condos with an Ikea-esque makeover, turned out for turnkey business.
While the perks of hotels are sometimes exactly what you need, other times an alternative might make sense for your business travel. Home rental options can be more or less expensive than hotels, but the variety can be useful, too. As the hotel industry points out, Airbnb may not be entirely objective in their glowing report of the savings potential--but they may not be entirely wrong, either.