It is no surprise that the all-mighty bottom line has grown more mighty since the recent downturn—news of dropping markets and overall cutbacks have become the recurring theme. So what will define “value” for business travel in this economy? It should be all about price, right? Curiously enough, Ahern says, this is not the case.
Analysts have identified several trends for the coming decade that affect how businesses are redefining what is truly valuable. One of the more interesting trends that may seem somewhat unexpected in this economy is the stepped-up war for talent and its effect on the business travel industry. Because employee work/life balance has a positive driving effect on productivity, traveler well-being is taking precedence over greater savings that sacrifice comfort and overall satisfaction. Surprising? Perhaps. But as companies demand more efficiency, responsibility, and know-how from their remaining and prospective employees—they are finding it more cost-efficient to provide traveler comforts, rather than lose the best of the best. Experts predict that this will be combined with tougher compliance measures to manage the company’s stricter budgets.
In terms of balancing traveler well-being with greater control over travel policy compliance—the corporate housing/mobility market is the easy leader.
For most organizations, being able to offer spacious apartments with kitchens, living space, and a variety of amenities is a selling point with employees. Coupling this with corporate housing providers’ clear-cut pricing—many offer budget tracking tools, inclusive rates (utilities, Internet, and the like), and no hidden fees—positions corporate apartments to become the pacesetter in a brave new economy.
And, with a brave new economy comes the nearly unanimous need for open and honest dialogue between suppliers and buyers. Companies are looking for someone to offer greater ease in doing business.
In a time where travel managers are looking to minimize costs—this sentiment among corporate buyers only can increase the stress of doing business. Again, this is where corporate and relocation housing providers have the upper hand. With many corporate housing providers, the strategy is to make buyers into business partners with a “what’s good for you will be good for me” attitude. Many offer streamlined billing and some even offer spend visibility through advanced reporting. From a buyer’s perspective, these all add up to savings that unburden travel managers from a price standpoint—but also give increased efficiency and transparency that answers the most resounding complaint from companies… the desire for more forthright communication and a partnership that truly delivers overall value.
Improving Comfort for Business Travelers
Another trend in business travel that should lead more companies to corporate and relocation housing providers is that of increased segmentation of services. Airlines are catering to their elite sectors, trains to the comforts of their business traveler, and corporate apartment providers are offering what has been offered for years now—more living space, more business amenities, easier commute to job sites, and excellent pricing with spend forecasting.
Then there is the added benefit of fully-equipped kitchens that offer the guest more opportunities to enjoy a variety of home dining options for the greater convenience of eating in—while offering companies a savings opportunity through home prepared meals rather than the high cost of room service and restaurants. According to the article, “Ten Business Travel Trends for 2010,” in CWT Vision, “…the key trend will be suppliers enabling travelers to enjoy their personal lifestyle wherever they are, blurring the line between business and leisure.” And, with a wide variety of amenity options ranging from swimming pools, spas, retail shops, fitness centers, and much more—corporate apartment providers have been at the forefront of this trend for quite some time… it is the market that is just now catching up.
But the business of temporary housing providers never will be entirely dominated by economic trends. There are some factors that remain constant. One of these is location.
While the more traditional business traveler may automatically book a hotel, corporate apartments can be an appropriate choice for the long-term guest. They are able to provide a variety of options that allow travelers to align with employers’ locations, as well as local schools, and other criteria affiliated with guests/ employees who require temporary housing—such proximity drivers will ensure employee satisfaction with their corporate accommodations throughout the extent of their stay.
Extended business travelers and long-term project managers can establish a home base in a corporate apartment complete with workspace furnishings that fully support their business objectives. Other housing requests, such as certain kitchen appointments or supplementary furnishings—including cribs, patio furniture, or twin-bed setups in second bedrooms—can help establish a more accommodating temporary home. Similar housing features that serve the transferee will prove valuable to long-term business guests who can settle easily into a corporate apartment for the full tenure of their stay.
It seems that corporate housing providers have everything covered in terms of living perks and little luxuries, but it is important not to forget the greatest of amenities—convenience. And with corporate housing, valued employees have what is commonly called “easy come and go.”
When a client commutes between cities, there is no need to pack bags and drag their things with them back and forth. The temporary apartment acts as a second home, eliminating the chore of “moving” each time an employee travels between home and work.
A Valuable Business Partner
The benefits extend beyond the experience of the guest/employee. What many companies are calling for in this tough economic climate is exactly what can be found with corporate apartment providers—a valuable business partner and advisor with the resources to back it up. This is not to say that buyers’ top concern with their bottom line is being ignored. It is more of an acknowledgement that the two concepts are linked.
Corporate apartments reduce the total cost of ownership by bringing real savings to the bottom line, and they are able to do this by bringing their resources and market knowledge to the partnership. They reduce costs through standardized rate structures across a housing program that are aligned with standard housing criteria established by the employer—thus giving greater control that ends in greater savings. Compliance of housing program utilization across a client’s employee base will drive savings by eliminating rogue spending sparked by individuals booking housing on their own.
It also is important to note that an alliance with a corporate housing provider should ensure awareness of innovative and alternative housing options in specific markets, not to mention alerts to business trends in local markets—such as the trend toward a new style of urban living. In many markets, it has not been an explosion of hotel building, but apartment living options.
Ten years ago, city centers were comprised of mostly hotels—now there is a plethora of apartments and short-term housing choices. Corporate housing providers have been at the forefront of this trend, using their partnership with clients to save money and offer customized solutions with a flexibility that only comes from experience and market awareness. That trendsetting knowledge allows them to offer such alternatives as executive and short-term housing options to supplement the overall program with exact solutions for specific organizational requirements that will benefit the employer and drive additional savings.
Certainly, it all sounds good. But ultimately, at the heart of value is the idea that buyers are getting the best price possible for the best possible solution. And in this case, the best thing about corporate apartment value is not how great it sounds—it is how great it is. The redefinition of value might just be going back to basics. And it is not about theoretical value—it is about concrete, real world results.
Recently, a Fortune 50 financial services company saved more than a million dollars by creating and managing a program for inbound expatriates from India for management training and rotation programs. This is just one example. Across the entire temporary housing market, these savings can be found to greater or lesser degrees. The important thing to remember about these new trends is that in an economy braced for revitalization, the revival of value is king.
Chris Ahearn, is senior vice president, sales and marketing, Oakwood Worldwide, Los Angeles, California. He can be reached at +1 310 444 2571 or cahearn@oakwood.com