Former Airbnb Exec Pitches Remote Work as Reward Not a Right

A former Airbnb executive is counting on remote workers to fuel his new accommodations venture, which looks to fill a gap he spotted during his seven-year tenure at the homesharing company. But its premise might seem controversial to some.

There’s no longer any real question over the rising demand for remote work, but with his startup Ukio, Stanley Fourteau wants to position long-term stays in designer apartments as a corporate perk.

“Our plan is to integrate with travel agencies,” said Fourteau, who was previously Airbnb’s head of global growth for Experiences and general manager for Latin America. “Our vision also is when we get to a certain size in certain markets, we want to work with employers to give it as an employee perk.”

Hear Airbnb CEO Brian Chesky Speak In Person at Skift Global Forum in NYC September 21-23

The idea is that employers could offer two to three months to employees based on stays within Ukio’s network.

One of Ukio’s angel investors also happens to be Avi Meir, the co-founder and CEO of corporate travel agency Travelperk, which recently raised $160 million. “We’ll integrate with Travelperk when the world of business travel returns,” Fourteau added.

For now there are limited options, with 100 apartments available in Spanish cities Barcelona and Madrid. Ukio takes on unfurnished apartments from owners, typically offering them seven to 10-year contracts, guaranteeing them a rent every month.  “It’s a big commitment, but a lot of investors want a guaranteed yield for a long period of time. They’re risk averse,” Fourteau said. Design plays a big role in their refurbishments.

Ukio will add properties in Lisbon within weeks, with plans for Berlin and London in the pipeline; it’s gearing up to announce a new fundraise, which would follow ealier funding from investors including Heartcore Capital. In 2019, Denmark’s Heartcore was among venture firms that raised $484 million for GetYourGuide.

Barcelona-based Fourteau, who founded Ukio with his brother Jeremy in January last year, aims to reach 20 to 25 cities across western Europe within the next two to three years.

The New President’s Club?

Incentives and rewards can come with an element of controversy, according to one mobility expert. Is a luxury European getaway even viable?

“The concept of rewarding with another location is highly compelling, from a talent perspective,” said Steve Black, co-founder and chief strategy officer at talent mobility platform Topia. “Talent has made it clear they want to work remotely.”

However, it may alienate those staff who are unable to live and work in such a flexible manner. “There’s some risk, it’s a relatively lavish and in-your-face benefit,” Black added. “Everybody sees it. If I get a bonus that’s double my peers, nobody knows.”

Yet it may be that short city jaunts end up replacing more traditional perks. “In certain functions, it’s not that uncommon. Think about sales teams, the global top tier will have a massive offsite in Hawaii. Or a company’s ‘president’s club’ will have a big perk. There are some (job) functions where they’re used to that benefit.” Black said.

Companies might also think twice due to the costs of sending employees away for months at a time. Would staff be expected to contribute to their stays? Who pays for travel? And would they be required to travel to the office, if their company had one in the vicinity? There’ll be lots of questions.

Black also warned that visibly endorsing “work from anywhere” in this manner draws companies into tax responsibility issues, particularly if there’s no digital nomad visa in place.

“Employers look the other way. It’s up to employees to make sure they’re (tax) compliant,” Black said. “This absolves them of officially saying OK to something that’s not compliant, and pushes the risk back to the employee if something goes south.”

Lessons from Airbnb

However, the geographical location could prove to be an advantage. “Europe is the continent with the biggest proximity of major metropolitan cities, in the same time zone, where people would love to spend three months with friends who are living in Berlin, or Paris, or example,” Fourteau said. “We wanted to capture this opportunity.”

Minimum durations start at 32 nights, as opposed to Airbnb’s typical daily rates. It’s clearly not an Airbnb clone, but the concept seems to have been brewing as far back as 2013 when Fourteau worked in Brazil for Airbnb.

“As a general manager of the region you analyze trends, and one we saw since 2013 was growing exponentially faster than our own growth was flexible housing,” he said. “People were looking for apartments for three to six months on Airbnb. We termed them long-term stays. What was interesting was that we had a lot of traffic for that segment, but the percentage of bookings was very low. There was a big gap.”

The reason was that when people looked for such a long duration, the best apartments already had a reservation. And what did remain in the search result didn’t tend to be the best option, Fourteau said. Airbnb took remedial action with a couple of investments, buying mid-term rental platform Urban Door and investing in Zeus Living.

Ukio is now evolving this concept, with a broader mission to become the “first global housing brand — when you think about housing, it’s 30 to 40 percent of our capital expenditure, yet it’s remained an unbranded market.”

There’s scope to scale quickly, depending on future financial backing, thanks to the lengthy minimum stay policy; Ukio won’t be subject to city regulations that require shorter stay providers to have a licence. But at the same time it’s going up against many serviced apartment providers, such as Blueground, and to a lesser extent Sonder.

Reside Worldwide, meanwhile, is expanding its European focus and recently added a new director of sales for the region. It also claimed its Reside 3Sixty platform grew by 32 percent last year. “Our 3Sixty network now has over a million vetted, high-quality accommodations at our clients’ disposal and is helping clients resume safe relocation of their employees worldwide,” the company said.

Ukio’s remote worker focus means it has more of a captive market — if it can attract the right type of remote worker. “Right now we’re a business-to-consumer product, but the majority of our clients are actually 50-50 split between remote workers, and residents, but (those who are) living for a period of two years and don’t want to invest in furniture, and deposits, and all the upfront capital costs,” Fourteau said.

Sidenotes

The number crunchers have been hard at work since returning from their summer vacations. With 2022 around the corner, data trackers, analysts and even industry associations are assessing the fallout from the pandemic, including business travel revenue losses.

Here’s a snapshot: The hotel industry in the U.S. lost a decade’s worth of revenue and job growth due to coronavirus, and will finish 2021 down more than $59 billion in business travel revenue, compared to 2019, according to the American Hotel and Lodging Association and Kalibri Labs. It follows a $49 billion hit in 2020.

In Europe, no financial figures as such from hotel data tracker STR, but a warning of a long wait until international business travelers return. Domestic and international leisure travel spend is likely to recover by 2022, STR reckons, but international business travel won’t recover until 2024 — or longer.

Skift calculated the potential financial blow from corporate travel’s downturn in August last year. Based on volumes reducing by a third in 2021, we suggested Marriott’s worldwide properties would suffer a $12.4 billion corporate guest room revenue hit. For IHG, we said global properties could lose $3.8 billion of corporate revenue. In the U.S., Choice Hotels would see $562 million taken out.

Back in the summer of 2020, our numbers appeared relatively high. In retrospect they seem conservative based on this week’s forecasts.

According to corporate travel data company TripBam, business travel demand will only be at 50 percent of 2019’s levels by the end of this year, and 80 percent of 2019’s levels by the end of next year, noted Skift’s Daily Lodging Report.

But further ahead, will analysts be brave enough to forecast business travel revenue losses based on bold emission-slashing targets we’re starting to see from companies, as well as the rise of trip justification tools working their way into corporate booking tools?

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Accor, Airbnb, Amadeus, American Airlines, ancillaries, Certares, CWT, Marriott, Southwest Airlines, Travelport, Zoom.

In Brief

Concur Wins $374 Million U.S. Government Contract

The U.S. Department of Defense has signed a $374 million contract with Concur to modernize its legacy travel management system, according to reports. The deal, which involves the department’s human resources branch, will lead to a new system called “MyTravel” that will manage the full range of the department’s travel expenses and operations by 2025. It processes about four million trips each year.

Lufthansa Boosts Schedules to Meet Corp Travel Demand

Lufthansa is putting on more flights for business travelers in September and October, Reuters has reported. The airline has increased capacity on domestic flights by 30 percent in September and will increase it by a further 15 percent in October. It will also reintroduce the hourly frequency of flights between Frankfurt and Hamburg and Frankfurt and Berlin in the mornings and evenings, said to be popular with business travelers.

Hear Airbnb CEO Brian Chesky Speak In Person at Skift Global Forum in NYC September 21-23