It’s a classic tale of challenges and opportunities. And disclaimers.
For when the three biggest travel management companies help clients use Airbnb, they say, they’re not endorsing it. Whether to use it is up to clients. TMCs are simply capturing data. Well, they might be marketing it, too. And they could soon be booking it. In any case, it will generate revenue.
According to an Airbnb spokesperson, TMCs will make money through “revenue-share deals for company referrals and booking fulfillment.” The representative said some such arrangements are already in place.
American Express Global Business Travel, BCD Travel and Carlson Wagonlit Travel last month announced cooperation with Airbnb, initially on capturing booking data for joint clients. Officials with the TMCs declined to specify compensation frameworks.
In addition to potential revenues for referring new clients to Airbnb’s business program, sources said TMCs could charge clients data consolidation fees and/or booking fees.
For the TMCs, the moves are opportunistic and also part of an effort to stay relevant. Airbnb may not be a good fit for any given client, but many TMCs have some clients using it. Concur said spending on “home sharing” among expense clients grew 56 percent year over year in the first quarter.
Support for Airbnb among clients remains mixed. Some want it in their programs. Many don’t know. Is it time to decide? Not necessarily.
Whether taking a position on Airbnb is a matter of relevance for corporate buyers depends on company culture. Their commentary shows a wide range of perspectives. Quite a few still say travelers hardly want it. On the other hand, Airbnb presents options when cities are otherwise sold out. Does it represent leverage with hotels? Hard to say, but buyers might explore that. For many travel managers, the list of opportunities is shorter than that of challenges. Potential problems center on safety, product consistency and process integration.
Efficiency of process is an issue. None of the three TMCs is enabling agent bookings quite yet. Airbnb first revealed in May that it was building that functionality. Agent-assisted bookings presumably would come with full-service fees. Airbnb indicated it is “working with its TMC partners to be included in new booking tools.” BCD Travel talked about potentially integrating Airbnb content into its mobile app.
Travelers obviously can set up their own Airbnb profile and book on its site. Reimbursement is easy for Concur clients that use TripLink.
Many corporate buyers worry that enabling “direct” bookings with Airbnb undermines hallowed consolidated purchasing practices. They prefer comparison shopping. Agent assistance is one approach, but it’s not cheap. Sanctioning off-channel bookings and trusting travelers to do the shopping across multiple channels could require post-booking audits.
As a “disruptor” itself, Salesforce likes to support disruptors, said Americas travel manager Ryan Pierce last month at the Global Business Travel Association convention in Denver. He said Salesforce helped Airbnb build its business programs. To be sure travelers are spending wisely, Pierce said, he reviews emailed confirmations for each of their Airbnb bookings. Pierce had expected this to be overwhelming but instead, he said, “I find it informative.” He can check the types of accommodations and rates. “We prefer [travelers pay] less than what they would find with one of our preferred hotel properties,” Pierce said.
Such a post-booking check could result in refunds. Airbnb hosts can choose from a few options for rules on those. Cleaning fees are not charged on canceled stays but Airbnb’s roughly 10 percent service fee is not refundable. At least publicly, that is.
Ideally, Airbnb could be weaved in with self-service channels that show other lodging inventory and apply policy and spending controls on the front end.
Egencia noted that agent-assisted bookings on Airbnb through TMCs are an encouraging first step. In an emailed statement, the company wrote that “in considering connecting with sharing economy providers, it is vital that we create a seamless online experience that … enables the best rates to compete in one display and saves travelers from spending time consulting multiple sites.”
When Airbnb announced the biggies, BCD Travel was most specific about the potential to integrate Airbnb content for self-service. This would be through its TripSource mobile app. BCD Travel vice president for product strategy and innovation Torsten Kriedt said the company is assessing demand for such integration. “Booking on Airbnb’s site is super cool,” he noted. “Some of the richer, more personalized experience would be lost.”
Carlson Wagonlit Travel expects agents to begin booking for client travelers starting in October, using their own profiles on Airbnb’s site. Travelers may be guided there as well. “Over time, we’d love to figure out a way to better integrate that content into those travelers’ search options within the booking path, but it’s not going to happen in October,” said CWT president for hotels Scott Brennan. The TMC is first working on the “mechanism” to enable agent bookings via a “punch out” to Airbnb.
American Express Global Business Travel vice president of digital traveler Evan Konwiser said bookings could become part of the partnership as it evolves.
Much easier than bookings is integration of post-booking data. So for interested clients that are part of Airbnb’s business program, these TMCs will take in data from Airbnb on bookings for spend management and duty of care. This process seems similar to what Airbnb already was doing with the likes of iJet and International SOS, but it goes further. “The ISOS feed reports on duty of care, and a person’s location,” noted an Airbnb official. “The feeds to TMCs provide detailed reporting back to companies around travel spend by location and department. By including our reservation data inside this TMC data, companies can now include Airbnb in their reporting.”
TMC comments about this development sound a lot like Concur’s rationale for TripLink: corporate travelers are making these choices; let’s at least capture the data.
BCD Travel vice president for product strategy and innovation Torsten Kriedt
“Not having the data is a gap,” said BCD’s Kriedt.
According to CWT’s Brennan, “This is about making sure data is captured and stored the same as we would for any other hotel stay, so we have access to that info if we need to tell a travel manager where employees are staying.”
Kriedt acknowledged that any TMC or travel risk management player could incorporate the Airbnb API for these purposes.
“We haven’t had corporate customers come to us and ask for support on Airbnb,” said John Cruse, COO of BCD Travel affiliate Balboa Travel. “Some companies are using it. Some don’t necessarily want to sanction it.”
While there are early adopters, the hesitation is palpable. One concern relates to product consistency. Airbnb offers certain commitments with its “business travel ready” listings.
“I do think more can be done” said Konwiser. “The business product is definitely a meaningful step. We know business travelers crave consistency. Business hotels have beaten consistency to death. It will be interesting to see how that evolves and which additional boxes they tick.”
Airbnb continues to demonstrate flexibility with the business community. For example, it changed its traditional receipt, which doesn’t break out charges per night. “Over the past six months, our teams have completely redesigned our receipt to be more business-friendly,” according to the Airbnb spokesperson. “It now specifically calls out the nightly charge and includes other items and services needed by business travelers, like cleaning fees. We also provide a per-person average daily rate in our internal dashboard.”
Process efficiency and the traveler’s experience are top of mind for travel buyers, but safety is even higher. For many of them, it’s difficult to get used to the idea of relying on user ratings as a proxy for the vetting they do in the hotel RFP process.
Speaking at the GBTA convention, William Blair travel analyst Meghan Hartsell said her firm examined Airbnb and “decided we weren’t quite ready.” Contrasting the assessment with her company’s approval of Lyft and Uber, she said, “it’s a little bit different when you’re in a car awake for a short time versus when you’re in someone’s house with eight hours at your most vulnerable.”
In Salesforce’s Airbnb policy, “you can’t have shared rooms,” said Pierce. “To pick an Airbnb property they do need to have so many reviews. We prefer they do the ones marked for business. If someone has a bad experience, we know there’s a business line available for just business customers as well, and a support and account management team so I know who to go to.” Airbnb, he claimed, has “come a long way in listening to and addressing concerns about duty of care.”
Further demonstrating its flexibility and desire to attract business travelers, Airbnb indicated it had created an “elevated business travel-specific customer service line and account management that ensures travelers have the help they need.”
Some travel managers worry that a stranger has a copy of the apartment key; others are trying to live with safety concerns.
Hewlett Packard Enterprise director of global travel, meetings and events Sean-Michael Callahan is in the latter camp, according to his comments at GBTA last month.
“We have a very mandate-oriented environment at HPE. Last year we kicked off a new ideology … around employee experience. We’re trying to do what they’re already doing. We’re using ride sharing and the Airbnbs of the world, so why not fold them into the program and get smarter about it? We’re looking really hard at Airbnb right now because especially in compressed markets, we think it’s a viable option. We’ve gone through iteration after iteration with Airbnb around security and making sure properties that would be in the portfolio available to our travelers are business-specific, or owned by business professionals [who] have a home that would be relatively commensurate to what a hotel would be.
“We’re dealing internally with a very mature travel base. Our demographic is heavily loaded on folks that have been with HPE for longer than 20, 25 years. So their expectation is mahogany and sedans, and a really antiquated (to a large degree) view of travel. It’s getting them past the sense of security that you get when you go to a hotel lobby. It’s not always much different than picking up a key and going to an Airbnb property. We’re going through a lot of internal change and we have people spending a significant amount of money on Airbnb outside policy. If we don’t bring that in, we won’t be able to manage that spend.”
Airbnb’s trust and safety team works with business clients on their concerns.
Also commenting at the conference, Amazon North American travel manager Shannon Wilson said her firm’s business assurance team vetted the option. She said Amazon and Airbnb established communications protocols for emergencies. Approving Airbnb was a matter of adapting to traveler behavior, Wilson said.
While Airbnb acknowledged economic models for TMCs, officials from the TMC trio declined to detail how they would cash in.
“We have a commercial agreement with Airbnb and I wouldn’t comment on the details,” said CWT CEO Kurt Ekert. “There’s an economic incentive to do business with anyone we engage with.”
BCD’s Kriedt said pricing had yet to be determined. “First movers will have a different commercial treatment,” he said.
The TMC officials also didn’t have much to say about how supporting Airbnb might impact their hotel relationships. Presumably it offers some leverage, particularly on volume for the longer stays which are typical of Airbnb business users. Concur said home sharing draws an average stay of five nights, versus three in hotels.
“I wouldn’t call it major leverage, like a company is going to [threaten to] move all its business to Airbnb,” said Kriedt. He suggested it might help them assess what their average nightly rates should be.
CWT president for hotels Scott Brennan
“Personally I don’t see it as a major leverage point for clients or CWT,” said Brennan. “As Airbnb has shown in the consumer side, in many ways they reach out to a different consumer than the traditional hotel brands. So there’s an element of incrementality. I think you’ll see the channel shift won’t be as large as overall traffic gains.”
Konwiser was more certain about the influence on competition than leverage. “I do think a lot of hotel companies are trying new things and the pace of innovation has picked up,” he said. “They’re more dynamic. They’re adopting technology. They have better food now.”
According to Choice Hotels International chief commercial officer Robert McDowell, “We look at Airbnb as a potential competitor down the road, but we also look at how they’re connecting with customers, their seamless platform, their visual photography, easy consumer journey. As a supplier we continue to look at this because we can learn a lot from what they are doing and how we have to evolve in the marketplace.”
The impact may be more tactical and about choices, rather than leverage. Airbnb presents options around so-called compression. The term describes the rate environment at extremely high-demand times, such as during big events in a particular city. Travel managers often cite such situations as potential uses of Airbnb.
“We’re going to Comic Con or something where cities are completely sold out, so we have people asking us whether they can use Airbnb,” said Sony Pictures Entertainment travel services director Gary Stevenson during GBTA. “Just recently we worked with risk management and some internal teams to say, ‘Because the city is sold out and there’s low hotel availability, we’ll allow it in this instance.’ But it will still be sort of ‘buyer beware.’ There’s no way to vet those properties in the same way we do with preferred hotels.”
According to CBS Corporation vice president for travel services Hal Rudy, “We’re not advocating Airbnb at CBS because of the risk, so we’re gun-shy but I just feel sometimes we’re forced to look at it because of the event pricing. Right now we’re saying no, but I don’t know if that’s going to change as Airbnb is becoming more accepted. Event pricing is not helping.”
National Hockey League director of NHL Club business and analytics Alex Townsend-Mitchell was more pointed: “Hotels should at least see it as a somewhat viable threat going forward.”
It’s during city sell-outs where hotel firms are feeling the competitive impact most, according to hospitality experts.
“If we cannot continue to make our business stay more differentiated, which we have, it will be a real risk for us in the long term,” said Jeremy Welter, EVP for asset management at Ashford Hospitality, during the Revenue Strategy Summit conference in July. “It’s compression. Big city events. We had an impact where we were [too] aggressive with one of our hotels during the Super Bowl. We made an assumption of compression. We saw it in Philadelphia when the pope came to visit. These were mostly cost-conscious folks, and we could not get the compression we normally get in the market with a citywide event. So I think we need to be cautious in pricing inventory, and maybe a little more conservative in locking in groups instead of hoping for last-minute, high-rate transient demand.” Ashford owns Hiltons, Marriotts and other branded properties.
That’s not the first thing hoteliers will tell you about Airbnb, though. They rightly point out that in many jurisdictions, its legality is under review. That alone is a deterrent for conservative corporations.
About Those Non-Endorsements
So are TMCs putting their seal of approval on an unproven — and controversial — new model?
It may be up to the corporation to say yea or nay, but as one travel manager pointed out, the fact that their company’s TMC has announced its support will be an argument for travelers bent on using Airbnb.
“We’re enabling Airbnb for clients who have specifically requested it,” said CWT’s Brennan. “So if the client has told us they decided Airbnb is an acceptable option, then we will turn it on for them. Otherwise we won’t. We don’t want to provide inventory that may make travel managers uncomfortable.” He said that after the partnership announcement, a few clients asked to sign up and others “called in to ask how they make sure they don’t end up on the list.”
In its announcement, Amex GBT referred to Airbnb as “preferred” accommodations; Travel Weekly reported that the company considers Airbnb a “preferred supplier.” Konwiser declined to reinforce the notion. “I don’t know how you define that,” he said. “It’s an interesting phrase. We’re not counseling clients on whether this is the right option for them.”
“I wouldn’t say we have officially endorsed Airbnb,” said BCD’s Kriedt. “We’re not booking it at the moment.”