Millions more essential workers could be hitting the road in the coming years, thanks to Joe Biden’s $1.2 trillion infrastructure bill. And that’s a lot of bookings for all travel companies, if they're prepared to do their homework early on.
Future of Work
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A freeway expansion project in Reno, Nevada, has inspired an entrepreneur to build up a network of private rental homes for construction companies.
Yeves Perez founded Workbnb last year after spotting an opportunity to house workers involved in major building and repair projects, switching an existing business (started by his mother) from vacation to workforce rental homes.
“What changed the game for us was Ames Construction,” Perez said. “A freeway project is going to take years. They needed a two-bedroom condo for a site supervisor. He’s from Utah, but needed his family to visit every three months. A furnished condo was the best fit, and they were willing to pay $200 a night for two and a half years.”
These rentals were also a tool to boost employee moral, he added — a hot topic as millions of people quit their jobs.
Digging through the booking data, Perez said he saw a pattern where 65 percent of bookings were business related, and that several construction executives seemed to be booking. “We were 90 percent occupied, with general contractors, architects, engineers,” he said. “We had companies calling us up and ordering houses like pizza: ‘We need seven three-bedrooms and two one-bedrooms in three weeks. Can you do that?’ We set up a warehouse so we could furnish rentals within a day.”
At this point, the concept for Workbnb began, and a new app is currently being piloted with 20 rental operators across eight states. And with Joe Biden’s $1.2 trillion infrastructure bill (or the Infrastructure Investment and Jobs Act, as it’s officially known) now passed, millions more essential workers could be hitting the road over the next decade as roads, bridges, electrical lines and power stations get an upgrade.
Catering to essential workers is not a new concept, but it provided much needed relief for some companies during the crisis, including corporate travel agencies like the UK’s Click Travel (which has since been bought by TravelPerk) and Australia’s CTM.
Global corporate lodging platform HRS also saw increased requests of rates to address long-stay trends during the procurement exercises its staged in 2021. “The combination of new country scenarios such as the U.S. infrastructure legislation and corporations bringing newly remote employees to HQ or regional locations for multi-day visits for collaboration or culture-building are contributing to the growth of long-stay segments,” said a spokesperson. “As Omicron (hopefully) subsides in the second quarter, we’re confident that long stays will play a key part in driving the first stages of business travel’s recovery.”
Just Another Airbnb Copycat?
Workbnb isn’t the first startup to mimic Airbnb, and certainly won’t be the last. But it’s done its homework, and claims to have 491 hosts offering 3,100 properties, grown partly by a community Facebook page called the Workbnb App Coalition group. According to Perez, 55 million Americans are considered essential workers, and 10 million work in construction, of which 32 percent travel often. Following the signing of the infrastructure bill, he said the industry estimates it needs to hire two million more workers.
As a result, the founder wants to scale up and he’s taking aim at disgruntled Airbnb hosts in particular. “Our value proposition is simple,” he said. “For a lot of vacation rental owners who’ve had horrible experiences, we’re giving them an opportunity to pivot towards a different category of traveler.”
Airbnb of course offers Airbnb for Work, with remote-work friendly homes as well as team building exercises and activities that “bring teams together and cultivate meaningful connections”, or “convenient brainstorming spaces for meetings and offsites,” according to its website.
In spring 2020, Airbnb set up a $250 million fund to support hosts impacted by pandemic cancellations. And in November last year, it rolled out more than 50 upgrades designed to improve the experience for guests and hosts, following other enhancements in May.
Perez said a major plus for his hosts will be the reduced guest turnover as stays could extend into years; there’s less risk of a journeyman throwing a wild party and trashing the place too.
The platform is designed for office administrators who make the bookings for employees, so they can grab multiple units at a time and pay in one go. “They spend weeks trying to find somewhere, then end up going to an extended stay or motel, and put the employees there. They typically book based on accessibility. If there are units that are accessible, they’ll book it,” he said.
So far, so good. But Workbnb hosts won’t be allowed to dynamically price their homes, instead committing to static, or flat, pricing — a considerable disadvantage if hosts want to maximize revenue in peak seasons.
At the same time Workbnb doesn’t ask for exclusivity to be listed on its platform, and operators have the right to accept direct bookings. But it does encourage operators to have clear extension policies which are activated by Workbnb bookings, Perez said, and the host will be required by the rental contract to hold future dates and required to “block out” availability on the platforms to prevent double bookings.
But where the wider corporate travel sector can take note is the future of large-scale infrastructure projects. For professional hosts wanting to expand their businesses, the upside is the data Workbnb offers them as it shares information from construction firms when they bid on projects that could be taking place in two years. “They need to know what’s accessible when they do their estimates,” Perez said. “They put housing costs into the bid.”
Workbnb also provides “opportunity zones” to hosts, allowing them to consider expanding into new states or cities and opening up more units. “It’s useful for hosts as when they need bank loans, they are asked what their sales projections are,” he added. In return, Workbnb charges each host a monthly $9.99 subscription fee to remain active on the platform, and charges a 5 percent service fee to the company.
In an era where startups are spending more on Airbnbs than office rent, and Airbnb’s own data reveals more than 100,000 guests booked stays of 90 days or longer in the 12 months through September 2021, it’s not imaginable more home owners will shift towards this type of business travel. And for those burnt by the pandemic, construction workers may be exactly the type of guest they’re looking for.
Looking for a solution for your company’s supply chain headaches? Travel is the answer, according to the CEO of one of the biggest corporate travel agencies.
Problems around manufacturing and deliveries aren’t going away, but Corporate Travel Management’s Jamie Pherous has the answer.
“There are three reasons why people travel. Number one is to win and retain customers, and number two is supply chain. Number three is how you bring your people together,” he said.
Pherous was talking to Skift recently from the U.S. where he’s currently keeping busy, since acquiring U.S.-based Travel and Transport for $195 million in September 2020.
“We now know if you can get on a plane and see your supplier, you’re probably going to get your inventory before your peers, which is critical right now,” he said. “If they’re on Zoom, they can nod and say yes, but when you go there and talk about your issues, it’s material. We know our customers are doing that and winning.”
Pherous is the living, breathing expression of the business traveler. On the first point: “We won a very large the other day, because we traveled and our peers didn’t. The customer actually said, the fact you traveled showed how much you cared.”
And when it comes to getting staff together — a point brought up by Certares’ Tom Klein that CEOs are kept awake at night by this — he noted: “We got all our team together in Omaha, and I can tell you that what we covered in four days, and the problems we resolved, was worth four months of what we’d been doing.”
Of course, running a travel company, the CEO would say that, but considering how trip justification is all the rage, shifting the travel conversation towards fixing supplier problems is a return on investment itself.
10-Second Corporate Travel Catch-Up
Corp Travel Agency ATPI Partners with Flight Aggregator Kyte
ATPI is expanding the number of direct connections it has with airlines via the so-called New Distribution Capability, thanks to a new deal with Kyte. Participating airlines include easyJet, British Airways, Iberia and American Airlines. ATPI now has “streamlined access” to their content, including bag and seat selection, plus their full suite of ancillaries and fare families. “Kyte’s job is to unlock the huge potential NDC offers airlines and travel sellers to collaborate and offer an improved flight booking experience to the end user by making these functionalities more easily accessible to TMCs — so ATPI is a great partner for us,” said Kyte CEO Alice Ferrari.
Business Traveler Hotel Dip in 2022
Hotel occupancy rates and room revenue are projected to approach 2019 levels in 2022, but leisure travelers will continue to drive the recovery, according to the American Hotel & Lodging Association’s 2022 State of the Hotel Industry Report. In 2019, business travelers made up 52.5 percent of industry room revenue; in 2022, it is projected to represent just 43.6 percent. Business travel is expected to remain down more than 20 percent for much of the year, while just 58 percent of meetings and events are expected to return.
Flight Centre Creates New Sustainability Role
Flight Centre Travel Group, the parent company of Corporate Traveller and FCM, has appointed Michelle Degenhardt as its global sustainability officer in a newly created role. She will help ensure the company’s business practices are economically, environmentally and socially sustainable. During her career Degenhardt has helped develop the company’s responsible travel charter. Flight Centre is also a signatory to the United Nations Global Compact program.
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Tags: airbnb, alternative accommodations, business travel, coronavirus, corporate travel, covid-19, Future of Work Briefing, infrastructure, politics, remote work, short-term rentals, Skift Pro Columns, travel management