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At the annual Airbnb Open 2015 conference in Paris last week — before the city was thrown into crisis by mass shootings and bombings, and the final day of the event was called off — Airbnb launched its new Business Travel Ready program to help hosts make their properties more attractive to corporate travel managers and employees traveling on business.
According to a keynote speech on Friday, business travel is one of three primary growth markets for Airbnb moving forward, along with Chinese travelers on the buyer side, and non-urban destinations on the supply side.
Following that, Jonathan Liebtag, business development lead at Airbnb, presented a session about Business Travel Ready, which is still very much in its early development stages.
The program builds on the July expansion of the Airbnb For Business corporate travel platform, which now includes an online dashboard featuring central purchasing and billing functionality, employee tracking, and streamlined expense reporting.
Leibtag noted that over 30% of hotel bookings are for business travelers — which he said represents a $120 billion market — but only 10% of Airbnb guests are traveling on business.
“We’re really excited about business travel and Airbnb,” he enthused. “So we think it’s a huge opportunity for the company to reach a new set of travelers.”
Behind Business Travel Ready
Beginning with the host experience, Business Travel Ready is designed to educate Airbnb hosts about the specific requirements that business travelers demand. Once hosts feel they can fulfill those requirements, they can apply for Business Travel Ready designation.
Based on Airbnb’s research, business travelers need the ability to easily compare listing differentiators within a specific, narrowly defined region, with close proximity to financial districts and public transportation. Fast and consistent Wi-Fi, 24-hour check-in, laptop-friendly workspaces, high levels of cleanliness, and no pets are obviously critical.
Corporate travelers expect new shampoo and soap, new irons and ironing boards, high quality hairdryers, and suit hangers, whereas leisure travelers are sometimes less demanding in that regard.
There’s also the question about how much sharing is too much sharing.
Airbnb listings are divided into two categories: “Entire Home/Apt” and “Private Room,” with the latter meaning guests are usually living in the same space with the owners and sharing the kitchen, bathrooms, common living areas, etc.
Generally, business travelers prefer occupying an entire space by themselves, and most corporate travel programs demand it. Although, Leibtag was adamant that those preferences could evolve over time because Airbnb guests always become more experimental with different types of properties as they become more familiar with the platform.
For hosts to be granted the Business Travel Ready designation after they’ve applied, they must receive three positive reviews from guests who have designated themselves as business travelers, which they do by adding their work email to their profiles.
Once the third positive review is in, Airbnb automatically sends hosts an email alerting them that they’ve been accepted into the program. At that time, the host’s listing page and profile will get a new badge with a little briefcase. That then communicates that the host has shown interest in welcoming business travelers and the listing is “Business Travel Ready.”
“We think Business Travel Ready raises the quality of all listings across the board, because those services and amenities are things that many travelers are looking for,” said Leibtag. “And, if we differentiate between business and leisure, we can do a better job matching hosts with guests.”
Business Traveler Pain Points
Airbnb is very clear about its value proposition for business travelers. The message is that private shared accommodations offer a much more personal guest experience at a more affordable price point. The platform also provides a review system that over 80% of both Airbnb hosts and users contribute to, compared to a much lower figure at hotels, which Airbnb says is often under 30%.
The personalized guest experience is the primary hook.
“The unspoken truth here is that business travelers are some of the loneliest people on the planet,” suggested Liebtag. He said that people on business trips are alone at night away from family and friends, and they’re often with people and places they’re not entirely comfortable with.
In April, Airbnb launched its “Never A Stranger” video showing a young female traveling around the world from Tokyo to Tulum on her own, where she’s embraced as family by the different hosts and their families/friends. Airbnb needs to create numerous videos of the same quality and theme focusing specifically on scenarios for the business traveler.
“It’s all about the sense of care, purpose and belonging that business travelers don’t really get at hotels,” said Liebtag. “There’s a higher lever of hospitality with Airbnb.”
He added that Airbnb has done extensive research on the business traveler segment, which concludes: They feel lonely and rigid with no control of where they stay. They feel like life is being put on hold, and they have a different sense of the person who they really are. They have a diminished sense of self, and they often feel like they don’t belong in the destination.
Selling Business Travel Ready To Corporate Travel Managers
Airbnb has its work cut out to convince corporations at scale that the sharing economy is a safe, secure and legally prudent option for their employees. Much of this has to do with perception as it does with operations and human resources.
The new Airbnb For Business platform with its user-friendly dashboard was the first step to show travel managers that the sharing company is serious about providing the business tools and measuring components necessary to support a corporate travel program.
Here are some of the challenges.
Corporate travel programs require quick responsiveness from contracted properties or third party suppliers without a lot of give and take. So waiting 24 hours for a host to return a booking request, while emailing back and forth a bunch of times to organize the stay isn’t going to work for the business segment.
Airbnb also needs to develop a way to confirm a human greeting or direct key access the second a guest shows up. Presently, when hosts are not on-property to greet arriving guests, the hosts and guests arrange for key pickup through private messaging on the Airbnb site. That can range from a friend of the host swinging by with a key, to a coded key dropbox by the front door. Moving forward, that needs to be more explicit upfront.
Because travel arrival times vary so much due to unexpected delays, the guest is sometimes left waiting for someone to arrive with a key. Even just a few minutes can be intimidating in certain locations. In no way will corporate travel programs allow for any confusion about how their employees can access the room immediately upon arrival.
Leibtag said that Airbnb is looking at keyless entry via smartphone as a potential solution.
Safety is another major concern for liability reasons. Corporate travel programs require fire alarms and CO2 detection systems inside the units. After our Airbnb session, hosts from Portugal and Australia said that CO2 detection devices are not available in their countries, but Leibtag explained that Airbnb will mail them to hosts in those occasions.
“If we want to attract more business planners, we need to make sure we identify those things, so we can communicate out to the broader business community that Airbnb listings have them,” said Leibtag. “Those are really table stakes for business travelers at a foundational level.”
Another big question revolves around cancellation policies. One mandate for Business Travel Ready is that hosts cannot cancel a booking within seven days of arrival, but even then, that’s potentially a short time window for someone outside a corporate program attending a convention, for example, to rebook.
Bookings by non-users is also a big challenge. Leibtag says the Airbnb host/guest relationship itself will help sell Business Travel Ready to corporate travel managers to convince them to incorporate Airbnb into their programs. Except, Airbnb is based on the guest personally making their booking because so much of the success of the sharing economy is based on reviews.
So if a travel manager or third party is booking Airbnb for an employee, the host doesn’t know who they’re getting. This is alleviated when employees book their own travel, but it’s an issue that can hamper scalability for business travel bookings from larger corporations.
In addition, if a travel manager books multiple employees in a multi-room unit and doesn’t communicate how many people are on-property, that throws off average daily rate metrics that Airbnb needs to be accurate for cost comparability against hotels.
“We show the average daily rate that [travel managers] getting on Airbnb so they can take that and compare it directly to what they’re paying at hotels,” said Leibtag. “Not surprisingly, they’re saving a ton of money at Airbnb. Hotels just cannot compete with that, which is usually around a 30% savings.”
In the short term, Airbnb is marketing heavily to business travelers who are relocating to new cities.
“Do you really want to stay at an extended hotel,” asked Leibtag. “Or do you really want to explore a neighborhood, or a couple neighborhoods?”
Likewise, Airbnb is focusing on corporate travel programs where employees can choose their own accommodations. That’s the wedge. Once business travelers start embracing that freedom, and sharing their positive experiences on their social networks, that could fuel rising adoptability in the corporate arena.
That’s based on the understanding that this only works if the regulatory, tax and insurance hurdles are all addressed moving forward, and that’s a big “if” for a lot of corporations and the public. The defeat of Proposition F in San Francisco this month to limit Airbnb’s growth was a pivotal moment in that journey, and a few Airbnb insiders off the record said that vote was “huge” for the company internally.
Leibtag said that Google, Salesforce, SoundCloud and Vox Media are working closely with Airbnb to develop new corporate travel programs. As well, more than 1,000 companies have signed up to use Airbnb For Business since its re-release this summer.
He explained that smaller companies without a corporate travel office or third party contractors are especially interested in Airbnb For Business because the dashboard offers an intuitive user experience and it’s free.
On the Airbnb For Business portal, Darragh Ormsby, global travel manager for Google, says, “Our employees appreciate the choice and flexibility that Airbnb listings provide them when they’re on the road, whether for conferences, meetings or team offsites.”
Expect to see a lot more of those types of testimonials.
There’s a bigger issue at play here, however. The more that Airbnb can eventually partner with corporations to build out their business travel operations, the more it will legitimize room sharing in the eyes of the general public, which will spur more leisure bookings.
“Business travel normalizes room sharing,” Leibtag suggests. “And when companies sign up to put their employees in Airbnb homes, all of the leisure travelers that haven’t considered Airbnb before, or think of it something as scary, suddenly it becomes a little more normal.”