Airbnb launched its Business Travel Ready program to lure professional travelers away from hotels in 2015. Initially, the program had its skeptics. Would business travelers be willing to ditch their loyalty programs, change their booking habits, and adopt a radically different way of traveling for business? Â
The latest numbers provided by Airbnb reveal thatÂ 15% of total bookings are business related. Although still a small percentage, our analysis shows that its impact on smaller, hotel comparable, rentals in metropolitan markets, is big.
The following analysis of properties that are Business Travel Ready shows a high adoption of business-related travel. In turn, creating a huge opportunity for properties capable of hosting those guests.
With employees from 250,0000+ organizations using Airbnb for work-related travel, Airbnb expects the proportion of total stays to increase to 30% by 2020, but only if they can overcome two major obstacles:
- Eliminating corporate objections about short-term rentals around duty of care, streamlining expense reimbursement, and replacing beloved rewards programs.
- Convincing hosts that earning a Business Travel Ready accreditation is a worthwhile venture.
Outside of corporate objections, the primary challenge of attracting business travelers has been lack of consistency with check-ins and property standards. The business-approved status attempts to allay these fears. AÂ listing with this accreditation strives to mirror a hotel stay in relation to experience, cleanliness, and dependability, with certain requirements:
- The space: Entire Home/Apartment, smoke, and pet-free property
- Reviews and response rate: Listing must have at least 3 reviews and maintain 5-star cleanliness and accuracy reviews.
- The Amenities: Laptop-friendly workspaces, wireless internet,Â self-check-in, toiletries, hairdryers, hangers and ironing boards, etc.
- Cancellations: Host cannot have canceled any reservation within a week of the stay in the past year.
Even still, Business Travel Ready listings lack common amenities found specifically in hotel business centers; such as a work desk, reliable Wi-Fi, printers and meeting rooms. As a solution,Â Airbnb launched a pilot program with co-working giant,Â WeWork. When corporate customers book with Airbnb, they can save a spot their nearest WeWork office. For now, this program is only active in Chicago, New York, Los Angeles, Washington, London, and Sydney.
However, attracting business travelers will be an unnecessary venture if Airbnb canâ€™t also increase its host-base with acceptable accommodations. There’s minimal investment or friction involved in creating a business-qualified rental property and plenty of financial incentive to motivate hosts to pay attention.
Benefits of becoming business approved:
- New Revenue Source: Business travel spending wasÂ $1.3 trillion in 2016, opening up a whole new revenue stream to hosts that previously only attracted vacationers.
- Increase Bookings: Business travelers travel during the week and want to stay on days that traditionally maintain lower occupancy rates than weekends.
- Ease: As the host of an entire home or apartment, itâ€™s not difficult toÂ become Business Travel Ready.
- Reliable Payment:Â Airbnb recently forged partnerships with American Express Global Business Travel, BCD and Carlson Wagonlit Travel, making Airbnb bookings compliant with many corporate booking systems.
But the most impactful reason of all is that Business Travel ReadyÂ listings can make an average of $10,000 more.
At the Airbnb Open in January of 2017, Airbnb stated the average increase in revenue for business-approved listings over regular listings is 8% for top 15 cities and 5% globally.
With that in mind, we turned to our data for a granular look at earning differences. Here, we have the top 10 Airbnb markets ranked by the number of total listings and by the number of Business Travel Ready (BR) listings.
BR as % of Total
|5||Rio de Janiero||7,739||276||4%|
Note: ‘Total’ includes active 0/1/2 bedroom listings; BR = Business Travel Ready; NBR = Non-Business Travel Ready
Then, we isolated normal and Business Travel Ready listings to compare the occupancy and revenue of listings with and without the Business Travel Ready accreditation.
|ADR||Occupancy||Revenue Last 12 mo|
|5||Rio de Janiero||$116||$99||-15%||34%||53%||56%||$3,828||$10,246||$6,418|
Note: Analysis includes active 0/1/2 bedroom listings with at least one reservation in the year; ADR = Average Daily Rate; NBR = Not Business Travel Ready; BR = Business Travel Ready
What we clearly see is that the occupancy rate for accredited listings is an average of 26% higher than those without. Which in turn, is generating an average of a $10,000 revenue increase throughout the course of 2017.
Interestingly, the average daily rate doesnâ€™t see the same dramatic increase. When digging a bit deeper we found that Business Travel Ready listings have a greater percentage of weekday bookings at often reduced rates as compared to weekend bookings.
Of course, there are outliers — like Bali and Rio. Neither city is a popular destination for business travel. Unlike the giant business hubs of London and New York; in those cities, we can see the most significant differences.
Business travel is a big deal for Airbnb hosts. Business Travel Ready listings are making more money is due in large part to booking more weekdays, especially Sunday, Monday, and Tuesdays.
It’s clear that business travel is driving a large percentage of overall Airbnb stays in metropolitan markets and listings that are able to achieve the designation of being business approved have are going to be able to deliver significantly more revenue.