Hospitality spend is a major part of any corporate travel budget—as high as 40 percent for some programs. Corporate housing may help companies looking to improve their sourcing strategy, by addressing the extended-stay category of travelers (in addition to transient and meetings travelers).
According to the Global Serviced Apartments Industry Report for 2013-14, there are now more than 650,000 “serviced apartment” units in over 8,800 locations worldwide. These include extended-stay studios and residential corporate housing units, which are increasingly popular in cities with pricey hotel rates.
Why do companies lease corporate apartments or rent corporate housing?
Some choose to invest in a dedicated corporate apartment or two, where long-term guests of the home office can crash when they’re in town. Corporate apartments make convenient landing pads when new hires are in the process of relocating, or when out-of-town consultants are needed in-person.
Alternatively, or in addition, some companies work with corporate housing management companies. These companies lease their inventory from apartment complexes that mimic hotel environments. The luxury options come complete with front desks, fitness centers, pools, and plenty of nearby conveniences. Greater proximity to the office and/or transportation is another key draw.
Whether you need to accommodate an intern or a senior executive, one example of an excellent corporate housing provider is Synergy Corporate Housing. Synergy is based in California, but features housing options throughout every major market in the U.S. and internationally. Synergy provides customized solutions for companies in a variety of business sectors, looking to either relocate staff members and/or plan stays that are a minimum of four nights or longer.
How does corporate housing differ from extended stay hotels?
On the plus side, corporate housing typically provides a lot more space. As opposed to the kitchenette and one-bedroom/studio setup, corporate apartments are usually located in residential complexes where other tenants live on a full-time basis. The homier environment can satisfy traveling employees who are working on long-term projects, possibly with family members in tow.
On the negative side, corporate housing is often less flexible—in terms of minimum stay requirements and services offered. And although the market is becoming more standardized, it’s still difficult to ensure consistent service and accommodations within some corporate housing channels. Particularly outside the U.S., cleanliness and in-room amenities may vary to a much greater degree than among supplier hotels. Getting guest issues resolved is also a bigger challenge without a dedicated hotel staff on hand.
How do corporate housing costs compare to hotel rates?
The short answer: it all depends. Clearly, if your executive team divides their time equally between New York and Seattle, there’s a case to be made for investing in a corporate residence. On the other hand, diversifying you lodging spend will impact your supplier negotiations and potentially complicate your next RFP season.
Plus, according to the recent GSAIR report, less than 40 percent of apartment operators feature on the major GDS systems, so rate comparison for individual itineraries is difficult. The easiest solution is to work alongside an established TMC, who can help you unpack your program spend, determine your hospitality savings goals, and provide fact-based guidance.
What does corporate housing involve from an HR perspective?
Whether you lease your own corporate apartment unit or work with a management company, there are still a lot of guest details to manage. At the very least you’ll need a dedicated point person to coordinate “bookings,” arrival support, key exchange, and policies with the housing company. For each new guest, occupant identification needs to be communicated to most residential complexes, even if your company maintains a long-term agreement.
Stickier issues can arise if you choose to pair travelers in two-bedroom units and/or allow family members to accompany your employees. You’ll need to draft clear policy guidelines and educate employees on their options, as well as provide opt-out provisions from employees with specific medical or religious privacy needs.
Have more corporate housing questions? Looking for more advice on hospitality spend and sourcing? Let’s talk!