Rising Hotel Rates Spur Interest In Interim Housing

Just as business travel buyers increasingly are employing extended stay properties as an alternative to both full-service and midprice, select-service accommodations, they also are raising their use of corporate interim housing as another long-term option, providing corporate travelers with more comfort, familiarity and flexibility at digestible rates.

As hotel rates continue to swell, especially in major markets, corporate interim housing is providing a reprieve for corporate travel managers.

"If you look at a per-day rate—a hotel being $200 a day, extended stay $120, then corporate housing maybe being $800 for a month—it makes it a bit more palatable," said Jan Freitag, vice president of Smith Travel Research. "All you're really doing is foregoing some of the amenities that a hotel offers."

Though a complimentary breakfast is not a standard offering in a corporate interim housing set-up, most corporate housing brands, like Oakwood Worldwide and Marriott ExecuStay, have units with full kitchens stacked with cookware and dishware. Also, like many extended stay properties, high-speed Internet access is provided free of charge.

As the demand for corporate interim housing continues to rise, and average stay lengths on business trips further escalate, corporate travel managers are beginning to recognize the value of corporate housing, sometimes in lieu of traditional extended stay brands.

"Any traveler staying over 30 days is a prime candidate for a corporate apartment," said Kevin Maguire, director of global travel services at Applied Materials. "Corporate apartments are usually less than extended stay, especially now since extended stay is suddenly the hot button in corporate travel."

To help facilitate its relationships with corporate travel buyers, Los Angeles-based Oakwood Worldwide, a company specializing in corporate interim housing, has dedicated systems in place to negotiate directly with travel managers as well as tools that manage the entire process.

"We welcome the relationships with corporate travel managers and work with them to ensure that their needs are met," according to Chris Ahearn, senior vice president of worldwide sales and marketing for Oakwood. The chain offers corporate travel managers a consolidated reporting and guest-tracking system through which they can access their company's housing information at any time.

Ahearn also said that many of Oakwood's locations can be booked through global distribution systems. Oakwood's rates start at $89 per day, depending on locations, and can go up to $250.

One interim housing provider offers short-term rentals in the U.S. market with the highest daily rates: New York City. AbodeNYC offers housing in Manhattan and, unlike most lodging choices in the city, rates that begin as low as $145 per night for a fully furnished apartment.

"A hotel is expensive in New York and our rates are less expensive," said Shelli Leifer, president of AbodeNYC. "It feels like home—there is no checking in, no front desk. People consider these like their homes when they are in New York." Leifer also said that a further discount kicks in if a guest stays longer than 30 days.

Marriott International is one of a handful of hotel companies that has a dedicated national extended stay sales team, according to Karen Blair, senior vice president of Marriott ExecuStay, which, along with Residence Inn and TownePlace Suites, rounds out Marriott's extended stay portfolio. Corporate travel buyers, she said, increasingly inquire about ExecuStay.

"While working through our requests for proposals, more travel managers are asking for pricing for all three of our extended stay brands and, depending on their needs, are putting their travelers in corporate apartments," said Blair. "We're up 34 percent in sales from corporate—there is big interest."