Is sharing caring?
4 May 2016 by Sam Welch
Sharing economy suppliers can offer characterful accommodation – but are they addressing corporate social responsibility concerns?
Travel buyers and procurement departments face daily compliance challenges – fundamentally, to make sure that business travellers are using preferred accommodation suppliers. At the same time, platforms that enable private accommodation sharing, such as Airbnb, are increasingly popular. So it’s no surprise that travel buyers are asking themselves: should we include ‘sharing economy’ suppliers? And how will this affect our efforts to boost compliance?
Here are seven questions to bear in mind when weighing up the pros and cons…
1. What’s the real story with the sharing economy?
To some people, the sharing economy is a classic ‘disrupter’; to others, it’s just another wild card in the ever-changing world of business travel distribution. However you see it, sharing economy suppliers are on the rise– despite concerns from many corporates regarding safety and security. A recent report suggested that 64% of suppliers in this sector were founded after 2010. The peer-to-peer rental market is on a similar growth trajectory.
2. Who do sharing economy providers appeal to?
There’s a general perception in business travel that the sharing economy appeals most to younger, tech-savvy travellers who spend all day viewing apps on their favourite ‘phablet’. But with a growing interest in ‘bleisure’ – adding leisure to a business trip – it’s clear that other generations of experienced business travellers are considering their options. A genuine home-from-home environment – assuming you have similar lifestyle tastes as your host, of course – can be appealing for the weary business traveller who’s seen and done it all.
3. What’s the potential for time-wasting?
Filtering through countless options on a sharing economy website can be tediously time consuming. Yes, there may be some super trendy and unusual options to wow your family with, but this sector has evolved from the rentals market and is a far cry from specialist business travel. Business travel is a world that’s long been measured on its ability to manage policy compliance and vouch for traveller safety.
4. Is the sharing economy sector any more or less risky than staying with a traditional provider?
We’ve all seen the negative headlines about some sharing economy properties. Travel professionals regularly swap personal stories about their experiences. And in some countries lawsuits have been lodged due to perceived violations of local tourism laws.
So is staying in a sharing economy property any more or less risky than staying with a traditional provider? Certainly safety and security is the biggest challenge affecting the sharing economy sector.
But let’s face it, business travel will always have its risks; most frequent travellers will have at least one less-than-savoury story about a trip or a destination. The debate will rage on about whether the sharing economy is business travel ready…
5. What are the pros and cons?
Buyers’ concerns about sharing economy accommodation include duty of care being compromised, lack of traveller tracking, and the risk of properties not complying with health, safety and fire regulations or the DDA (Disability Discrimination Act). Then there’s the question of insurance cover and liability, which still causes debate on the suitability of such properties for corporate travel programmes.
One year on from the last time we reviewed this sector, not much has changed. The pros and cons are still broadly the same:
Among the disadvantages are: this is a rentals-based market with rental rules and regulations; limitless variances in ‘house rules’; sharing community space with strangers; hidden extras and small print for things such as deposits and service fees; safety and security vetting; and inflexible procedures, payment options and terms and conditions.
On the up side, you have: unusual offerings (such as yurts, houseboats and barns); image-rich and app-based content; home-from-home environments and properties suitable for larger leisure groups.
6. Is the share price a fair price?
A rented room in a shared house might be cheaper than a traditional hotel, but you won’t get the usual trimmings.
Bookings for large, leisure groups with costs shared between friends can work favourably. But if you’re looking for midweek, sole use in a prime city centre location, in many cities there is no obvious price benefit; you can expect to pay equivalent to hotel prices or higher – and you need to watch those terms and conditions, deposits and service fees.
We did some analysis in March 2016 using live search comparisons for midweek dates in Birmingham, Bristol and Manchester.
As expected, sharing a room had the cheapest price tag. But suggesting that employees share rooms with business colleagues – even in traditional hotels meeting all minimum standards – is generally a policy taboo. Expecting them to share a room with a total stranger in an unvetted property could be a security or HR manager’s nightmare.
Booking a property for exclusive use was generally more expensive than a four-star hotel for a midweek stay, with pricing 18% to 94% higher in the cities analysed, excluding any cleaning, service or other fees.
7. Diversity or quality control?
One of the upsides of peer-to-peer rentals is the diverse selection of properties. But uncontrolled choice and lack of governance isn’t always a good thing; we found examples of properties offering an airbed – yes, an actual airbed of the camping variety – in a box room with no storage space. If that doesn’t take your fancy, it was also possible to book an affordable, shared single room with a host whose profile picture suggested he was the actor Tom Cruise.
Clearly some opportunists are cashing in on the shared economy sector. And while you might smile at the more unusual examples, the underlying message is still one of concern. Where is the quality control and governance on properties and facilities advertised on these sites?
In summary: should sharing economy providers become a staple in organisations’ travel programmes?
The specialist accommodation landscape has always been diverse, with properties to suit all tastes – from B&Bs to apartments, traditional hotels or funkier options. And if guests choose a B&B, there’s an expectation that regulatory obligations have been met.
Unfortunately, this can’t yet be said with confidence in the sharing economy sector.
Without doubt, the sharing economy concept has appeal for some business travellers, so it’s a distribution channel that we predict will continue to grow. But safety, traveller welfare and security will remain corporate travel priorities – and if providers are serious about business travel, the sector needs to work harder to alleviate ongoing corporate social responsibility concerns.
Until organisations can be satisfied that these CSR considerations are uncompromised, sharing economy options won’t become a mainstay of a corporate travel programme.
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