The gradual creep of the sharing economy into corporate travel

Disruption – such an overused word in the travel industry, often bandied around to simply describe a different feature or product line.

But the concept of a new wave of traveller behaviour and its impact on the status quo is certainly being felt in the corporate travel wing of travel and tourism.

Genuine disruption, on the one hand, has been traditionally described as changes to commission models which in turn affect pricing and relationships between partners, or new entrants in the supply chain.

Another definition is more at the corporate end of the industry, where costs of IT change to become affordable or where access to capital is easier – both of which can encourage new businesses to participate in a previously hard to enter sector.

One could argue that all of the above is happening now in the business travel sector.

Vincent Lebunetel, vice president of corporate innovation at Carlson Wagonlit, used a session at the recent CAPA World Aviation Summit in Helsinki to explain how services such as Uber and Airbnb are making their presence felt in the managed travel programmes of travellers.

The results are extremely interesting (and should be especially for those hell bent on denying any influence on managed travel from the poster children of the ground and accommodation sharing economies).

The business travel giant’s own customer data, captured earlier this year, found that 43% of travel managers were feeling the influence of Uber-type companies on travel programmes.

The figure falls to 30% (but, yes, still just under a third) for Airbnb and its ilk on accommodation.

One in ten travellers on business are already using Airbnb, with the figure rising to 21% for so-called millennials.

Around 15% regularly use Uber-type services to travel between meetings, hotels and airports, again with the figure rising to 33% for millennials.

Most tellingly, CWT found that 50% of expenses related to services in-destination were on Uber.

How much accommodation “providers” such as Airbnb are hitting hotels is still undetermined, but there is a trend emerging that suggests the longer business trips is where corporate travellers are turning away from traditional hotel stays.

For example, the average hotel stay is for 3 nights, whereas the Airbnb average is coming in at seven days.

In other words, when business travellers feel like they need their accommodation to feel more “homely”, where they can relax and settle in to a destination they are opting for Airbnb.

NB: Uber sharing economy image via Shutterstock.

NB2: Disclosure – author’s travel and accommodation costs were supported by CAPA event sponsor Travelport.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

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  1. Timothy O'Neil-Dunne

    For the umpteenth time – before the corporates and TMCs jump into this part of Koolaid, I will issue my familiar warning.
    1. Check your corporate travel policy. There is a specific statement (or there should be) concerning illegal behaviour. You may not engage in illegal behaviour.
    2. Check your insurance policy – particularly if you are self insuring. Your liability could be huge if you are breaking the law through illegally using facilities that break the law.
    For example arriving in NYC and staying 3 nights in an AirBnB using Uber both ways – you could be liable to be FIRED for exposing the company to such a liability.

    I don’t care for high NYC hotel prices nor the idiocy of the NYC Taxi cabs. But that doesnt mean I should be engaging in illegal behaviour.

    Think about it.

    Back to your usual activities.

    … oh yes and one more thing. Can we STOP calling it the “SHARING” economy. Uber and AirBnB sure as heck are not that.
    Cheers

    Timothy

     
    • Josh Gunn

      Are you suggesting that using Uber or Airbnb as a traveller is illegal? That’s simply not true.

      Sure, both companies have had their run-ins with regulations across different cities but that’s the company, not the users. Being able to get a car at the push of a button or live like a local when travelling rather than staying in a bland corporate hotel are fundamentally good things, not to mention cheaper on both counts than the incumbents. They will have issues with legacy incumbents trying every trick in the book to stop them from gaining market share but in the end people will vote with their feet.

      Corporate travel policies will evolve in line with the attitudes of those tasked with managing travel, otherwise you’ll just get huge leakage from travellers. It won’t occur overnight but it will happen. Uber, Airbnb and other travel startups are doing a lot on the insurance front for both those providing and using their services as well. Even so, if a person chooses to use a service and accepts their terms and conditions then that’s on the traveller, so I don’t think your comment about getting “FIRED” for using would stand up to any scrutiny. Seriously, if a company fired someone for using Uber or Airbnb then that’s a pretty stark warning to their people that progress is not high on the company’s agenda.

       
      • Timothy O'Neil-Dunne

        I am suggesting just that. IE that WHERE the activity is deemed illegal that it will invalidate your insurance policy and thus make the employee/traveller elgible for firing. The specific case I raised is that AirBnB in NYC for 3 days is highly likely (but not universally) to be illegal as it is doubtful that the property owner/renter/AirBnB is in compliance with local regulatory requirements. As such that is illegal and would invalidate the company liability policy. In addition anyone selling same is breaking their commercial obligations. After 9/11 and Sarbanes Oxley – these are all parts of the contract between TMC and Corporation. I know several companies who are now permitting the use of these two (and their ilk) but largely most policy changes have not fully aligned the resulting issue of liability and compliance. I am advocating that this needs to be done.
        Thus – am I saying that these these services and their providers act illegally? The answer is yes. Whether the company (AirBnB/Uber) or the individual contractor (Host/Diver) is responsible is somewhat academic if the behaviour is deemed to be illegal. The corporation who may not understand the obligations they are taking on and their advisors (the TMCs) need to pay attention to that. Ditto anyone who is inducing others to engage in illegal activity.
        Before we all jump into saying its fabulous – bear in mind that the absolute legality or illegality of these services is up for both debate and interpretation. If you take the risk then caveat emptor. Don’t assume that this behaviour continues to be covered under your insurance policy NOR exempts you from getting fired.
        So If I am wrong – can a representative of either company and please declare exactly where I am wrong and I will retract my statements herein without reservation.
        (drumming fingers)
        Cheers
        Timothy

         
 
 

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