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Airbnb For Work expanding into Australia’s lucrative business travel market

September 3, 2018

Corporate travellers, who can stay in entire Airbnb properties like this pad in Sydney's Redfern, are one of Airbnb's fastest growing markets. Photo: Airbnb

Hotels are fending off rival Airbnb from its stronghold of business travellers, as the online short-term rental platform homes in on the country’s fastest growing travel market.

Corporate trips are the top growth market within Australia’s travel sector, jumping by 11 per cent to 21.3 million travellers in the 12 months to March 2018, the latest Tourism Research Australia data shows. The amount these business travellers spent also increased by 6 per cent to more than $16 billion in the same period.

And it is this market that the accommodation portal is concentrating on, through its Airbnb for Work, which searches for homes with amenities targeted at business travellers such as work space, wifi and 24-hour self check-in.

10 per cent of all Airbnb bookings are for work trips, staying at homes like this Melbourne apartment. Photo: AirbnbTen per cent of all Airbnb bookings are for work trips, staying at properties like this Melbourne apartment. Photo: Airbnb

“One of the things that we’re seeing, in fact globally, for Airbnb is this is one of our fastest growing segments,” Airbnb country manager for Australia and New Zealand Sam McDonagh told Commercial Real Estate.

“Globally, it’s (work-related bookings) more than tripled in the last 12 months and that’s on the back of tripling in the 12 months before that.”

Employees from about 36,000 companies in Australia and New Zealand, including Facebook and Twitter, have signed up to book accommodation through Airbnb for Work.

It accounts for about 10 per cent of all Airbnb bookings globally – a figure which Mr McDonagh said “is certainly mirrored here in Australia”.

While corporate travel has traditionally been seen as the bastion of the hotel industry, with higher-spending business guests tending to stay loyal to hotels, Mr McDonagh does not think Airbnb for Work would take market share from hotels.

“We believe Airbnb is growing the overall tourism pie. We think it’s increasing the number of people that are travelling for work just by virtue of the fact that they can stay in an Airbnb,” he said.

Trent Fraser, Choice Hotels’ Asia Pacific chief executive officer, said he “welcomes competition in the tourism sector”.

Corporate travellers have generally favoured hotels. Photo: Choice HotelsCorporate travellers have generally favoured hotels. Photo: Choice Hotels

“It drives change and this is what we’ve seen since sharing economy platforms entered the hotel market,” he said.

“Hoteliers have had to adapt and innovate their offering as competition for the corporate travel market has increased in urban locations such as Melbourne and Sydney.”

Mr Fraser added that for corporate travellers, the hotel industry’s key point of difference from sharing economy platforms, like Airbnb, is its credibility and reliability.

“The hotel industry is held to very high standards in terms of fire and safety regulations so businesses can rest assured their employees are safe when travelling for work. The sharing economy is not held to the same standards and with less regulation comes risk,” he said.

There are certain sectors that use Airbnb for Work heavily, including education, professional services, mining and technology, Mr McDonagh said.

He claims that there is a significant cost saving when booking corporate accommodation with Airbnb compared with hotels.

“That may be in the range of 20-40 per cent depending on the property that people are staying at,” he said.

The growing proportion of millennials in the workforce has driven Airbnb’s business travel focus.

“One of the things we hear from our (client) companies is that there’s a big push amongst the millennial traveller that wants to take advantage of staying in an Airbnb and feeling like they’re more at home, but also combining business with leisure stays,” Mr McDonagh said.

Sarah Amey, who owns a small Gold Coast-based business Florals and Co, has used Airbnb for Work for three years and said she did not stay at hotels anymore.

“In terms of for work, I much prefer Airbnb (over hotels) because it just feels like the comfort of your own home,” she said.

The 27-year-old florist, who flies to Sydney and Melbourne regularly to meet clients, said as a small business, she saw better value in booking with Airbnb for Work.

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