The rapid growth of the sharing economy is changing the costs associated with business travel, presenting small businesses with an opportunity to travel more without breaking the bank.
Small businesses operate in the face of a challenging dynamic. Keep expenses manageable to turn a profit, but invest in the business in order to continue to grow. Business travel is as expensive as it is essential. Nothing is more impactful than a face-to-face conversation with a potential client.
That said, the rapid growth of the sharing economy is changing the costs associated with business travel, presenting small businesses with an opportunity to travel more without breaking the bank. However, cost savings are just one part of the picture – there are many other factors that need to be explored before jumping into sharing economy services like Airbnb or Uber.
Potential for savings
Arguably, the sharing economy’s key draw card is the transaction-specific savings it affords. A whitepaper by Carlson Wagonlit Travel’s (CWT) Solutions Group found that average paid rates in Airbnb were 25 per cent lower than traditional accommodation providers. This makes the sharing economy a particularly attractive option in cities like Melbourne, Tokyo and San Francisco, where hotels and serviced apartments are in short supply and rates can be high.
Know what you’re getting
Traditional suppliers like hotels and serviced apartments offer a high level of service and consistency across their properties, which is difficult for sharing economy providers to match. Moreover, travellers that require assurances such as fire detection systems, deadbolt locks, safes and more, may not find these services in sharing economy property.
That said, some companies like Airbnb and Uber have launched offerings targeted specifically at business travellers that aim to address many of these concerns around safety, service and consistency.
Make sure it’s legal
Another key challenge with using sharing economy suppliers is with regards to the legality of these services, which can even vary from one state to the next in the same country.
In Australia, for example, some states including ACT, New South Wales and South Australia have legalised and introduced regulations around ride-sharing services like Uber, but in other states, the validity of these services is still in question.
Similarly with shared accommodation, the state of New York in the US recently passed a law designed to curtail many short-term rentals, and this is being challenged in the courts by Airbnb. In Australia, the rules around short-term rentals also vary from council to council.
Is it a good fit for your company?
Ultimately, sharing economy services like Airbnb and Uber are a good fit for some business travel programs, but they may not be right for all. It really depends on a company’s culture, appetite for something new, and their risk management policies, among other things. Once you’ve done your homework and determined whether or not the sharing economy is right for your company, you should outline that in your travel policy and educate your travellers. If it’s not allowed, tell them why. If it is allowed, guide them on how to be responsible and safe when using these suppliers.
Lisa Akeroyd, Managing Director, Carlson Wagonlit Travel (CWT) Australia and New Zealand