Now that we’re well into 2017, we’re starting to map out the corporate housing market’s growing momentum from the latest annual reports and industry forecasts.
According to the Corporate Housing Providers Association (CHPA) 2017 Industry Report, the corporate travel market saw steady growth across a variety of metrics. The industry’s total revenue grew to $3.2 billion, an impressive 10.2% increase from 2015, and the number of available U.S. corporate housing rentals rose to nearly 67,000. Meanwhile, average rent increased by only 6.3%, creating an average nightly rate of $150.44.
But what does this all mean moving forward? Our team of experts has identified some of the top trends in the industry, based on last year’s industry performance, so you know what to expect in the months ahead.
Alternative accommodations are becoming mainstream.
Hotels may be the traditional standard for business travel, but the mainstay is being challenged by an increasingly popular option. According to Phocuswright’s “A Market Transformed: Private Accommodation in the U.S.,” alternative accommodations now account for one-fifth of the entire housing accommodation market. In 2016 alone, this type of bookings grew by 11%, which was nearly double the growth rate of the entire U.S. travel market, including hotels.
The leading travel market research agency took the numbers a step further in its U.S. Online Travel Overview Sixteenth Edition. Based on last year’s groundbreaking growth, the report predicts that private accommodation revenue could reach a whopping $36.6 billion by the end of 2018.
Because corporate housing falls into this sector, we anticipate continued growth and increased market share as alternative accommodations’ popularity steadily rises.
Expect a more curated and experiential stay.
Both housing research agencies cited above found that the private accommodation segment has grown much faster than the larger travel market for several innovative reasons. Travelers are finding that short-term rentals come with a higher diversity of spaces, locations, high-tech amenities (such as cooking one’s own meals) and cheaper nightly rates to choose from. What’s more, alternative accommodations can create a more authentic or upscale experience, adding leisure comforts to business trips or relocations.
Travelers Haven caters to this type of audience by offering an on-demand digital platform and dedicated account representative, allowing for more flexibility and personalization to further curate the short-term housing experience.
Urban options are also on the rise.
More than one in three rental properties are now located in urban environments, which is a 13% increase from 2012. This isn’t surprising amongst the other findings in “A Market Transformed.” Urban-based rentals are typically shorter with lower average nightly rates, but they still account for 18% of total rental revenue in 2016. Here at Travelers Haven, we also see a similar trend with a bulk of our bookings made at properties in urban areas. Phocuswright expects urban rentals to rise to nearly one-fourth of the U.S. private accommodation market in 2018.
Corporate housing isn’t just for business travelers anymore.
While relocation, training and projects still dominate the top reasons for corporate housing, the fourth-largest category is now owned by interns, according to CHPA’s 2017 Industry Report. We also see that a growing portion of our travelers are those on secondment, training trips, temporary projects, internships and fellowships, and they often receive a housing stipend. These travelers can directly book their own accommodations through Travelers Haven without the help of a travel or office manager.