Skift Take

A snapshot of how much it costs to go flex reveals few discrepancies in pricing, but some telltale signs of where prices could be about to soar.

Series: Future of Work

Future of Work

As organizations start to embrace distributed work and virtual meetings, the corporate travel and meetings sectors are preparing for change. Read Skift’s ongoing coverage of this shift in business travel behavior through the lens of both brands and consumers.

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For those companies planning on swapping offices for co-working spaces, one company has analyzed the cost of doing so around the world. You may be one of them — an estimated five million people will be based in co-working spaces by 2024, an increase of 158 percent on 2022.

The U.S. features the three most expensive places for remote workers, with San Francisco, New York City and Boston topping a list of 53 cities.

Rank City Country Co-working Space Search Volume Number of Co-working Spaces Average Cost Per Desk/Month (USD)
1 San Francisco U.S. 2,400 81 $359
2 New York U.S. 590 454 $356
3 Boston U.S. 1,300 65 $343
4 Hong Kong Hong Kong 1,600 341 $329
5 Sydney Australia 1,300 169 $318
6 Stockholm Sweden 1,000 84 $315
7 Tel Aviv Israel 210 39 $313
8 London UK 4,400 1,322 $308
9 Los Angeles U.S. 1,900 130 $305
10 Melbourne Australia 1,600 209 $297

Source: businessnamegenerator.com

The new report also covers internet speeds, and looks at which cities are the best for commuters, based on travel times and costs.

On this front, Doha in Qatar comes out on top: a one-way ticket on public transport costs an average of just $0.55, and a liter of petrol is $0.57. Commuters on public transportation can expect to wait just three minutes for transport, and their average commute time is only 30 minutes.

But England’s capital is the most in demand, based on searches, ahead of Singapore and Berlin. It’s also got the most co-work spaces, and isn’t the costliest city with an average desk charge of $308 per month.

However, that’s just for now. The cost of renting a desk will likely rise in the long term, for now WeWork’s entry-level All Access plan, for example, appears to be sticking at around $300 a month. Then there’s the question of glut: how much office real estate will eventually be transformed into multi-use spaces, and how far are companies  reverting back to their pre-pandemic working habits?

As Jade Tinsley, head of marketing at Coworkintel, previously noted: while hotels and airlines can raise prices, office providers need to remain competitive and make co-working more accessible in these early days of the work revolution.

Sidenotes

More people are expected to travel for between Thanksgiving and the New Year than last year — causing a potential headache for travel managers as the blended travel trip shows no signs of easing up.

Two in five travel managers (41 percent) have seen an increase in employees asking for blended travel, where they combine a business trip with a vacation or leisure component, the Global Business Travel Association revealed Thursday, based on its latest recovery poll.

And according to a new report from consulting firm PwC, 46 percent of travelers in the U.S. plan to fly this winter, up from 40 percent in 2021. In 2019, just 35 percent of consumers were planning to get away for the festivities.

With so-called bleisure tourism market expected to reach a valuation of $497.5 billion in 2022, travel managers could struggle to keep a rein on expenses as employees make the most of their next vacation.

“Bleisure is here to stay,” Jonathan Kletzel, PwC’s US airline and travel practice leader, told Skift. “The idea that business travelers would fly out on Monday and come home Thursday is out the window, especially talking to hoteliers and airlines. They say their demand patterns have completely shifted.”

Kletzel said companies may need to review their travel and expense policies. “I talk to corporate travel managers, and one of their concerns is how do we make sure that when someone’s on a leisure trip they’re not expensing things they shouldn’t,” he said. “If they book an Uber, is that for personal use? It’s an administrative challenge.”

PwC’s Outlook report, which was published Thursday, also said millennials were increasingly diverting spending towards experiences over goods, which could pose another challenge for companies with younger workforces.

“Travel managers are focusing more on experiences for their travelers, and it’s no longer just a finance-laden role. It’s become a means to retain talent,” Kletzel said.

Independent Thinking

The drive towards experiences was also reflected in the report’s findings that nearly a third more travelers were more comfortable with independent hotels this year than last, with 26 percent of respondents booking them for 2022, compared to 20 percent in 2021.

Kletzel said it explains why so many hotel groups were rebranding to “try and feel more like an independent hotel” to capture this market.

However, he said travel managers at larger companies weren’t seeing any difficulty when it comes to sourcing co-work spaces, despite a recent report saying just 17 percent said their procurement and management was “fully managed.” But they were reporting issues when trying to book venues, as they become quickly booked out.

The question mark over inflation remains though. PwC’s report reveals gas prices as the number one travel-related concern at 74 percent, higher than the 55 percent associated with fears of another Covid-19 wave this winter.

Yet Kletzel said the suppliers he has talked to have not cited any decreases in bookings as a direct result of worries over inflation. Wage increases, perhaps linked to inflation, have also led to more disposable income, which could be offsetting this.

At the same time, a new report from Bankrate says while 43 percent of U.S. adults are planning to take trips between Thanksgiving and the New Year, 79 percent are changing their travel plans due to high inflation.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Amadeus, American Express Travel, Bookaway Group, Eurowings, Hong Kong, Selina, Sonesta, Traveloka, United Airlines, Virgin Atlantic.

In Brief

Travel Agencies Begin Transatlantic Alliance

U.S.-based World Travel Inc. and the UK’s Clarity Travel have created a joint venture called One Global Travel. It was developed to help customers that were “tired of a lack of consistency in the network models and feel undervalued by the global mega-agencies,” according to general manager Jodie Gentles, who joined from Radius Travel. She also likened the new venture to an airline alliance “where the best in market carriers provide seamless transport throughout the world.” It will announce technology and commercial partnerships later this year.

GlobalStar Boosts Asia Presence

Agency consortium GlobalStar has added China’s Tongcheng Corporate Travel as a partner. The addition will now help the network extend its footprint into Asia. “The Asian market is intricate,” said GlobalStar CEO James Stevenson. “There is nothing like deep, local knowledge and expertise.” Tongcheng’s CEO Leon Huang said joining would also help the agency promote China’s business travel management expertise to the rest of the world globally.

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Tags: co-working, corporate travel, covid-19, gbta, independent hotels, inflation, marketing, thanksgiving

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