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Airbnb’s expansion into business travel space, while for now coincidental because business travelers are using it, will become lot more deliberate with all the new services it is planning, including possibly corporate travel management and expense tools it is reportedly developing.
As Eventbrite‘s head of international expansion, Elsita Meyer-Brandt spends weeks at a time in overseas cities to hire a team, open an office and kick off operations for the online ticketing service.
For a trip to Dublin, Ireland, in January and for her current posting in Melbourne, Australia, she opted for Airbnb spaces instead of hotels to serve as both accommodations and office space.
“For these market launches, it makes so much sense,” she said. “Staying in a hotel for four weeks in a row is just no fun. It’s so valuable to find a centrally located Airbnb space big enough for our team to work out of. It allows me to get into the market quickly without the pressure of finding the right office space out the gate.”
Now many business travelers are flocking to Airbnb, the San Francisco online marketplace where people rent homes or rooms to short-term visitors. Its expansion into business travel is a key reason investors reportedly pushed the company’s valuation to $10 billion last week. That would make Airbnb more valuable than long-established hotel chains such as Wyndham Worldwide, Hyatt Hotels and InterContinental.
That’s a heady trajectory for a company that started 5 1/2 years ago offering inflatable beds on the floor as crash space and now has accommodated 11 million travelers. (Airbnb is a diminution of “air mattress B&B.”)
“Airbnb is rapidly becoming a direct competitor of hotels,” said Patrick Botsworth, CEO and co-founder of Duetto, which makes technology to help hotels optimize pricing. “Cracking that business-traveler market is essential for its growth.”
Airbnb is among the fast-growing lodging options on expense reports submitted by travelers who use the automated Concur system, which processes $50 billion worth of expense reports a year for 20,000 corporations. Concur customers’ use of Airbnb has quadrupled every year since 2010 and is on track to hit $1 million this quarter, said Concur executive vice president Mike Hilton.
“That’s still a very small share, but if you look at the trend line, it’s not too many years away from getting into multiple percentage points,” he said. “This is starting to become a meaningful alternative for business trips.”
Airbnb is clearly working to lure corporate travelers, experts say, by offering features like instant booking confirmations and dynamic pricing. The company is also exploring cleaning, airport transportation and concierges, services that would appeal to business customers.
Last fall Airbnb hired Chip Conley, the founder of boutique hotel chain Joie de Vivre, as its head of global hospitality — another move that seems targeted at business customers. Conley tries to help hosts bring their A game.
“Hotels always do better with anything related to consistency,” he said. “Dependability is something I work on.”
Airbnb used to be seen as an alternative to hostels, said Emily Benkert, owner and founder of Guesthop, which manages more than 30 Airbnb properties. Now about half of her guests are business travelers, including people whose employers range from Google and Instagram to Philz Coffee and Heath Ceramics.
“We’ve seen everything from auto industry employees in town for a trade show to doctors traveling on behalf of their hospital for new trainings,” said Nathan Lasche, co-founder of SimpleBnB, another Airbnb property-management company. “At times, these customers stay in our properties because they’re on a budget, but increasingly we’re seeing corporate travelers who are sick of the cookie-cutter corporate hotels and want a memorable experience in a unique space.”
Some conference travelers may choose Airbnb because regular hotels are booked or raised prices.
Noah Dyer and Nick Vaden from the University of Advancing Technology in Tempe, Ariz., stayed at an Airbnb apartment in Bernal Heights while attending the Game Developers Conference last week.
“I had to convince the provost,” Dyer said. “But the accounting department didn’t care. We’d budgeted $1,200 for a hotel, and it ended up costing less than $900. And we got an entire, commodious place.”
In fact, the conference caused a surge in listings, said Andrew Kitchell, co-founder of Airbnb service BeyondStays. He sees similar jumps for other conferences, as well as demand from corporate travelers seeking spaces for retreats or extended brainstorming sessions.
Cost savings can be a big motivator — and not just for cash-strapped startups. Airbnb apartments average 21.2 percent less than hotels, according to a Priceonomics study last year. Renting an Airbnb room costs about half as much as a hotel room, it said.
Daniel Ruch runs Rocketrip, which helps companies reduce travel costs by rewarding employees whose trips come in under budget with half the savings. “Airbnb is a key way employees keep costs down,” he said.
Rocketrip was inspired by a similar program at Google, Ruch said. While the search engine company didn’t comment, several Airbnb hosts said they’ve seen an influx of Googlers trying to beat their budgets.
Some business travelers, including Eventbrite’s Meyer-Brandt, said they pick Airbnb for strategic reasons. (Eventbrite co-founder Kevin Hart was an early Airbnb investor, but that didn’t play a role, she said.)
“Colleagues from the U.S. come over to train the team, support marketing and sales efforts, or do a press push,” she said. “We get multiple bedrooms so we can stay together, which saves costs, allows us to connect with the team and have a glass of wine before we close out the day.”