Airbnb, Uber causing a seismic shift in business travel
Monday, April 13, 2015
From paper maps to electronic GPS, from phone reservations to mobile apps, travel has evolved in more ways than one. The biggest change in recent years has been the rapid rise of the sharing economy and how it is changing the way we travel for business.
According to the Global Business Travel Association (GBTA), U.S. business travel spending is projected to top $310 billion this year. This comes after a record-spending year of $292 billion in 2014 — even in the face of external issues in foreign economies in Europe, Russia and Asia.
"This is a significant and encouraging sign of confidence in the strength of the U.S. economy," said Michael W. McCormick, GBTA executive director and COO.
Sharing economy companies such as Airbnb and Uber are taking advantage of the increase in business travelers. Travel management company Concur reported that Airbnb usage among business travelers tripled from 2013 to 2014 — making the company one of the fastest-growing lodging options.
"What's been most amazing is the awareness (of Airbnb) in the corporate travel space and how it's changed," said Airbnb business travel lead Marc McGabe.
Partnered with Concur, Airbnb's business travel program allows participating companies to search through a unique listing of places tailored to their business. The program does not offer a corporate discount, but Airbnb provides companies with tools such as tracking their business traveler use and invoicing services.
"Typically, it was completely out of bounds for corporate travelers; it had no visibility to the corporate travel manager, who wants to know ahead what they'll spend," Concur's Executive Vice President Mike Koetting said when explaining how Airbnb has changed the business travel mentality.
Along with Airbnb, Uber is another sharing-economy company bringing changes to travel. Certify, an expense management system provider, recently released a report showing that more business travelers are choosing Uber over other ground transportation means.
According to Certify, 46 percent of its rides were made with Uber in the first quarter of 2015. That figure was only at 15 percent during the same time last year. The rides in taxis, limos and shuttles fell from 85 percent to 53 percent during the same time.
"While we often see noteworthy market shifts — leading restaurant chains and hotels exchanging leadership positions, for example — it is unprecedented to see one vendor grow to take such a commanding market share within one year's time," said Certify CEO Bob Neveu in an interview with The Associated Press.
Even though taxis, limos and shuttles still dominate ground transportation business, Uber has surpassed taxi rides as business travelers' preferred means of ground transportation. Cities such as San Francisco, Dallas, Los Angeles and Washington, D.C., have seen an increase of Uber users and a decline in taxi users.
As Airbnb and Uber continue to see a rise in numbers, both companies still continue to face scrutiny.
Airbnb continues to battle not only the hotel industry, but also cities such as New York and San Francisco where governments are trying to figure out ways to tax and regulate the sharing-lodging company. As for Uber, they face concerns regarding the screening of their drivers to make sure they have a clean record and drivers accessing customer’s data without permission.
One thing is for certain, both the hotel and ground transportation industries will have to look for new ways to bring in business as the sharing economy continues to climb.
"Travelers and companies are always looking for creative options," McCormick said. "From that perspective, everybody's intrigued."
- Travel, Hospitality & Event Management
- Business Management, Services & Risk Management
- Science & Technology
- 10 negative employee behaviors that undermine success
- Selling your business? What tenants need to know about their lease
- 13 ways to screw up your RV
- Back to the future with Ford bioplastics
- 7 key elements of an effective new employee orientation program
- 101 bad business buzzwords — and why you should avoid them
- Can solar energy compete with fossil fuels?
- 6 All-American Roads that you simply can’t miss
- Adjusting budgets impacted by crisis
- COVID-19 fallout hits California’s wine grape growers and wineries
- A guide to the haunted South
- Send me flowers now — don’t wait for my funeral
- Hospitality industry copes with unprecedented times, massive layoffs
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How