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TMC Carlson Wagonlit Travel shares their 10 potential advantages and disadvantages to consider when thinking about implementing a sharing economy provider in your travel programme.
While media coverage around the sharing economy suggests there is already extensive and broad use for corporate travel, the reality is usage is still a relatively minor portion of most corporate travel programs, it varies by company, and some companies still don’t allow sharing economy suppliers in their travel policy.
A 2015 survey from the Global Business Travel Association (GBTA) indicates 24% of companies do not allow their travellers to use ride-sharing suppliers. The GBTA study also indicates ride-sharing options as the least used by business travellers: 36% renting cars, 24% hailing taxis, 13% calling for a chauffeur, and just 11% using ride-sharing services.
More important than how well sharing economy suppliers are used currently is planning for how far the sharing economy will eventually penetrate corporate travel programs. Ultimately, buyers must remember sharing economy savings and traveller centricity should not come at the price of other program goals. There are several key considerations when determining if a sharing economy supplier is right for a travel program.
Below TMC Carlson Wagonlit Travel shares their top five potential pains and gains to consider when thinking about implementing a sharing economy provider in your travel programme:
1. Corporate Culture and Traveller Fit
Consider alignment between sharing economy purchasing and other travel program components, as well as with overall company philosophy, and the willingness of travellers, young and old, to try something new.
2. Duty of Care
Ensure uncompromised traveller safety. Travellers may or may not understand sharing economy properties and transportation are not always licensed, inspected, or regulated like hotels, chauffeured services and taxis. Buyers must ensure all approved properties are safe and secure.
3. Evolving Regulations
Understand current and changing regulations in key markets along with the related effect on pricing, ease of use, and flexibility. According to a 2014 report by New York’s Attorney General, nearly 75% of Airbnb’s listings between 2010 and 2014 were “illegal hotels,” violating state and city laws by renting out property for less than 30 days without the occupants also present. Officials are pursuing hefty fines from property owners accordingly.
4. Traveller Inconvenience/Cost Transfer
Weigh the potentially time-consuming selection of trustworthy vendors, additional logistics and additional expenses associated with sharing economy accommodations such as key drop services, meals requiring transportation, and other products and services typically provided by traditional hotels.
5. Program Cannibalisation
Analyse the point at which sharing economy usage jeopardises established discounts with other suppliers.
Analyse program options as the CWT Solutions Group study reveals companies can save up to 37% using Airbnb accommodations, depending on the number of nights. Uber for Business suggests fares average 40-60% less than a taxi in most major cities.
2. Traveller Experience
Get even more mobile as sharing economy providers transform the users’ experience pre, during and post trip through slick and simple mobile interfaces, cash-free transactions, feedback and ratings.
Consider additional supply as Airbnb asserts an estimated 550,000 accommodation options or inventory, which makes it in the top five for all hospitality brands considered. Uber is present in 330+ cities in 60+ countries with 100k+ driver partners. According to PKF Hospitality Research, Airbnb accommodations represent more than 5% of the total hotel rooms available in 19 markets in the US, and more than 15% of the total rooms available in Austin, New York City or San Francisco.
4. Central Billing
Review new functionality as key sharing economy suppliers now market a central billing option on their business travel platforms allowing corporations to streamline payment for all travellers.
Compare functionality as key sharing economy suppliers market a new offering with detailed reports on traveller usage, total cost and traveller ratings.
Read the full CWT view on “industry-shaping developments”