2nd Address

5 Differences Between Corporate Housing and Airbnb

By David Adams

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Airbnb is one of the biggest phenomenons in the lodging industry in the past 10 years. I have written about their history and made predictions on what Airbnb will do in the future. Airbnb signifies a major shift in the travel industry and they are truly disrupting hotels. Not only are they disrupting the hotel industry, they are disrupting how we talk about lodging.

It used to be that lodging definitions were simple. All lodging was professional and renting out your personal residence was limited to the fringe on websites like Couchsurfing and Craigslist. You had hotels that were nightly in urban and transit areas. You had vacation rentals that were nightly in rural areas. Anything over 30 days was a completely different category.

Now Airbnb is conflating all those definitions by overlapping with all of them. First, Airbnb made it possible to rent out an extra room in someone’s house or rent their whole house when they were not there. Second, Airbnb brought the vacation rental to urban and transit areas (they got started in New York and San Francisco). Now they operate in urban, transit and rural areas and are even often moving beyond short term to renting out monthly rentals. Airbnb is overlapping with everyone and making definitions tricky.

Can Airbnb be used for all of the use cases? What is the difference, if any, between these different types of lodging?

Given that Homesuite focused on monthly rentals, I would like to shed some light on the key differences today between the two.

Professional vs private

Airbnb positions themselves as being about belonging when you travel. The idea of Airbnb is that you can live like a local. Based on this, they do not want to have professional landlords on their platform. They have gone so far as to enforce one host, one listing, even removing hundreds of listings from their platform that violate this policy. Even Airbnb hosts that offer a full listing normally are only renting that listing for part of the year and living there the other part of the year, according to AirbnbCitizen. This means that Airbnb is about experiencing a local destination by staying in someone’s home - it’s private in nature.

Corporate housing is definitionally professional. These are not people’s home or sublets. They are apartments that are owned or rented by a company that is furnishing them and renting them out full time as a business. This type of housing will not have anyone else’s belongings in the rental, since it is a full time rental.

Service

In Airbnbs the service is provided by the private individual. The benefit of this is that you will get a personal experience and learn about a local’s life and perspective. However, a private individual may not be trained or capable of providing a quality hospitality experience. This means that you will get a very personalized experience, but there may be hiccups or idiosyncrasies during booking or during your stay.

Corporate housing is focused on providing service like a hotel. Good companies of this type will have high, consistent service standards: seamless move in and move out, 24 hour service and fast response to maintenance requests. You may not become friends with your provider, but you will get the consistent, high quality service.

Liability

Airbnb is cruising in uncharted territories. This raises many insurance questions. If there is an issue in an Airbnb, who is liable for the issue? Insurance sometimes has exceptions from coverage for home sharing - so will insurance cover an issue? Airbnb provides some insurance product, but there are many questions about what that product actually protects. There have not been any high profile liability cases with Airbnb yet, so the risk is low, but personal injury attorneys are excited about trying such cases. The NY Times recently wrote an article on Airbnb and liability.

Corporate housing is an established business model with clear insurance coverage. Issues happen that raise liability, but companies in this space carry insurance and corporate and personal policies also cover this kind of stay.

Pricing

Airbnb is priced nightly with a monthly discount. Corporate housing is often priced monthly. Even with the monthly discount on Airbnb, often it is more expensive. For more information on pricing, you can read about how Homesuite compares to a hotel in terms of pricing

Hotel vs rental laws

Since Airbnb is short term, booking is designed to be as hotel-like as possible. Often you will message first with the host before booking, but the actual booking is carried out online. For stays less than 30 days, hotel law applies to the booking. Hotel law means that you may need to pay hospitality tax on your stay. If you stay longer in an Airbnb, rental laws will apply - see below.

Since corporate housing is monthly, a different law applies. For any stay over 30 days, tenant-landlord law kicks in and real estate law applies. There are several implications. Landlords are not legally allowed to discriminate against tenants. If a landlord wants a tenant to leave, they must follow eviction law to remove a tenant. This means that background checks are important, since evictions are very difficult and costly. Lastly, a lease is required to cover all of the special liability and laws around 30+ day stays and protect both the provider and their tenant.

I hope this helps you when deciding when to use which kind of housing for your loding needs! Best of luck with your search! If you're a corporate travel manager, we've got a ton of resources for you here.

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