The next time you pack your bags and a corporate credit card, catch a flight, and head to another city for a business trip, Airbnb wants you to skip the hotel and book with them instead. Early adopters like Google, Salesforce, and Vox Media have been using the Airbnb Business Travel bookings for more than a year now, but the company is looking to expand its market share even more.
On July 20 the startup announced it was launching a platform of new tools for companies and their traveling employees to plan their business ventures with ease. Though it was founded in the digital world, Airbnb’s previous system for business travelers was considerably more low-tech than its other services. Marc McCabe, who runs the business traveler division of the company, spent his time sending out Excel spreadsheets to corporate customers that detailed their employees’ travel expenses. “Historically, it’s been a super-manual process,” Mike Lewis, a product manager for business travel at Airbnb, told Bloomberg.
Despite the somewhat clunky protocol, there’s already strong interest. Airbnb reports that their business traveler base grew 700% in the last year, which is mostly explained by the fact that the company opened up a business travel section about a year ago, and since then about 250 businesses have signed up to use the system. That’s just in the U.S., though the company also opened up international business travel options with its new platform. The company told Bloomberg that about 10% of its bookings are billed to corporate accounts.
Still, Airbnb wants more — and believes they can capture it. Businesses are sending more of their employees on trips, with 492.1 million expected corporate trips this year, according to the Global Business Travel Association. The association forecasts that sector to be worth about $302.7 billion this year, an increase of almost 5% compared to 2014. By 2016, it’s expected to grow another 5% or so to $318.9 billion. “The expected increase in U.S. business travel volume is an excellent indicator of how the overall domestic economy is faring, with every sector and consumer spending performing better than we’ve seen since 2009,” said Michael W. McCormick, GBTA executive director and COO. “Thanks to a healthier domestic economy and a stronger U.S. dollar, companies are putting more travelers on the road not only because they can afford to, but because they continue to see a strong return on their business travel investment.”
There’s plenty of corporate travelers who might put up a fight before giving up their five-star suites at the Hilton in favor of someone’s guest room. But if Google can get on board, there’s likely a few other businesses that will sign up too. With the new business-oriented platform, corporate clients will be able to see itineraries their employees have booked, financial reporting data, and make use of a central billing system that will make the process more streamlined for travel managers and the employees. So long, Excel.
Business trips might be on the upswing, but for many smaller companies they can still be a burdensome expense. Just as Airbnb disrupted the hotel service system for leisure trips, it has the potential to do the same for business. A two-night stay at Chicago’s Hilton will likely start at $200 per night, but there’s plenty of options on Airbnb below that. For cost-conscious employers where business trips are still a novelty to employees, it might be the right choice.
Aside from the cost, travelers are starting to indicate that the Airbnb experience is better than a stay in a less personalized hotel room. Business-related stays on Airbnb more than doubled from the first quarter of 2015 to the second quarter, according expense software company Certify. Travelers who used Certify also ranked their stays in Airbnb rentals higher than hotels: Airbnb units received an average of 4.72 stars out of five, compared to the average 4.04 stars for hotels.
Even if they won’t be taking on the Hilton’s core traveling group anytime soon, the company believes they’re attractive to a few niche groups. Chip Conley, head of hospitality and strategy at Airbnb, told Bloomberg they’re well-suited to attract travelers who are on extended business trips or those who are looking for off-site meeting places where they can room in the same house.
If the company wants to truly disrupt the travel industry and carve a larger space for themselves in it, they’ll eventually have to find ways to lure business travelers of every stripe. But the new platform signals they’re serious about that eventuality — and it taking the steps to make sure they’re in the running list of options for people laying down a corporate card for their next itinerary.
Follow Nikelle on Twitter @Nikelle_CS
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