Since the sharing economy seems to be gaining ground with everyday travelers, should corporations take advantage, too? This article explores the benefits and challenges of the sharing economy as it relates to corporate travel.
What is the sharing economy?
The sharing economy refers to an economic system where access to goods and services is shared between individuals in the economy. The current peer to peer based market is valued at $25 Billion dollars and is only expected to continue growing. Contrary to popular belief, the sharing economy has existed for a long time through services such as Bed and Breakfasts. But the increase in individuals’ access to technology has prompted startup companies to rapidly grow the sharing economy as technology makes it easier and cheaper to share our valuable resources.
How does the sharing economy affect the travel industry?
While the rise of the sharing economy has had a widespread impact on almost every aspect of our lives, one industry that will continue to deeply be impacted is the travel industry. Sharing economy giants Uber and Airbnb continue to grow at an astonishing rate.
A large part of business revenue is spent on travel expenses. If businesses are to remain cost efficient and competitive in an ever changing landscape, it is time that they start incorporating new travel policies that take into account sharing economy options.
Data from Tnooz shows that 26% of travel managers have planned or implemented a policy in regards to sharing economy ground transportation, whereas a large 39% of travel managers still say that implementing the sharing economy into corporate travel policies is not on the agenda. Additionally, 21% of travel managers say that they plan to introduce sharing economy accommodation options within two years. Even though some travel managers have begun to incorporate sharing economy options, the large majority have not yet recognized this opportunity that can help cut down on costs.
Uber and sharing economy ground transportation
Employees working for large businesses have become very familiar with on-demand services like Uber; calling an Uber on their smartphone has become almost second nature to them. Apart from this, Uber cars on average are also cheaper than taxis or any business car providers that travel managers may currently use. If Uber is cheaper and more convenient for business travelers to use, then why not start incorporating them into corporate travel policies?
Airbnb and sharing economy accommodations
Furthermore, Airbnb has realized that the business travel market has huge potential; therefore, they are making it easier for business travellers to book suitable accommodations. At the latest Airbnb open conference, the company announced that they will now give some hosts a “businesstraveller ready badge.” This badge will make booking Airbnbs easier for both business travellers and hosts who earn this badge. Earning this badge means that the accommodation will have wifi, workspace, an iron, and also strict cancellation policies. Thus, making it much easier for business travellers to identify which accommodations are suitable for them.
Challenges for the corporate travel industry
However, one main concern to businesses that are considering sharing economy travel options is duty of care. From the perspective of the businesses, ensuring that employees are safe while travelling is the main priority. When companies employ the services of sharing economy travel options, this becomes much more complicated as there is a lack of a screening process that is employed by large travel management companies. So this factor must be carefully weighed in when choosing the best travel option for the company.
Ultimately, the business travel industry is in for a big shift. Once companies start to identify how much cheaper it is for them and easier for their employees to use sharing economy options, they will slowly start to implement new corporate travel policies that accommodate this. Even though initially businesses may be hesitant to do so because of their long-standing relationship with hotel and travel services, they will realize that this will reduce costs drastically in the long run and will welcome this with open arms.