American Express Business Travel gave me a call because their client wanted to know the positive ROI / Return on Investment they would get by having their travelers stay in a corporate housing residential rental vs staying in a hotel.
Great question! Of course there is never a simple answer. I have previously served on the US Advisory Council for ERC / Employee Relocation Council the association for workforce mobility and a study was presented that stated employees who had bad corporate relocations were 50% more likely to get divorced!
As we know, corporate housing is an essential element of a successful corporate relocation. When a company invests in transferring a valuable and talented employee from one market to another the transferee must get to the new city, get settled and be productive at work, as quickly as possible. This is accomplished through immediately having them comfortable in their new local living arrangements and corporate housing provides this. So the question is how do you calculate ROI on this?
If you would rather look at the pennies – let’s choose Downtown Denver as an option.
According to the 2018 Corporate Housing Annual Report by CHPA
1 Bedroom Corporate Housing property = $123.92 per night
2 Bedroom Corporate Housing property = $146.47 per night
3 Bedroom Corporate Housing property = $177.69 per night
I just ran a Google Search for Downtown Denver, CO Hotels and this is what I got:
$149 per night = Embassy Suites – 3.5 Stars
$223 per night = Crawford Hotel – 4.5 Stars
$400 per night = Four Seasons – 5 Stars
In the corporate housing industry we spend a lot of time talking about the “soft” benefits of staying in a corporate housing property, but the reality is the “hard cash” benefits are even greater.
Next time you need a place to stay connect with AvenueWest Managed Corporate Housing 303-825-0000 or search for your next great corporate housing rental to better understand the huge ROI of staying in a corporate housing.
Atlanta Housing Special!
2 Bedroom Townhome in Vinings – Atlanta, Georgia
Close to Cumberland Mall and Dobbins Air Reserve Base – This 2200 sqr feet 3-story Brownstone executive townhome in Vinings Overlook has beautiful finishes and is professionally decorated. The first 2 levels have hardwood floors. The home has plenty of windows with plantation shutters that can be adjusted to let in lots of light. On the main level there is an office, half bathroom, and a large 2 car garage. The second level has the living room, dining area, kitchen and another half bathroom.
The kitchen features custom cabinets, granite countertops, stainless steel appliances and an extended counter with four counter-height stools. The natural wood dining table seats 6. The living area has leather seating, a gas fireplace, a large wall-mounted flat screen TV and a sound system with built-in speakers. Off the kitchen, there is a private balcony with table, chairs and outdoor grill. the 3rd level has two bedrooms, both with private en-suite bathrooms. There is also a laundry room on this level. Both bathrooms have custom cabinets and granite countertops. The master bedroom has a king bed and flat screen TV. The master bathroom has 2 sinks, a soaking tub and a separate stand-up shower. The second bedroom has two twin beds and lots of play space. Its en-suite bathroom has a shower/tub combo. Both bedrooms have large walk-in closets. This is a pet-free, no smoking property.
This home is conveniently located near the I-75 and I-285 (Perimeter highway). It is close to Cumberland Mall, Cobb Galleria, the new Atlanta Braves stadium (Suntrust Park) and Dobbins Air Reserve Base. There is plenty fine shopping, dining, entertainment and arts and recreation very nearby.
Call now to speak with a Property Specialist: (404) 618-4665
Or Click Here Complete a Housing Request Form
A major player in the corporate housing space, Bridgestreet, just launched their brand new site which has the potential to offer instant booking – something that has since been obsolete in the corporate housing sector. The corporate housing industry has been avoiding this technology shift for quite some time since it takes away the qualities and values we strive for: outstanding customer service and satisfaction, attention to detail, and quality control. According to Skift Megatrends 2017, corporate travel is shifting with all of the changes in leisure travel, causing business travelers to expect more instant booking tools and intuitive management portals.
Sites like AirBNB, HomeAway, Expedia, Booking.com, etc. all have the capacity to allow instant bookings which ultimately gives the consumer access to more lodging choices on the extended stay spectrum:
- Hotel Room: An open room with generally a king sized bed or 2 double beds, usually with a desk space, dresser, closet and a separate full bathroom. Ideally for short-term stays of 1-2 nights.
- Hotel Suite: A larger hotel room usually with a separate bedroom and bathroom, living area with desk, mini fridge, microwave, and coffee maker. Ideally for short-term stays of 1-5 nights.
- Extended Stay Hotel: An extended stay hotel room has all of the hotel suite but also offers a kitchen and dining area including pots, pans, dishes, silverware, and other very basic kitchen necessities. Typical extended stay rooms are designed for stays of 3-7 days though they can be utilized for longer stays as well.
- Corporate Housing: A fully furnished apartment with a full-size kitchen, all appliances, and a minimum of 60+ household items. Most apartments also offer on site amenities such as fitness centers, business centers, pools, etc. Offered for 30+ day stays.
- By Owner: A privately owned property either managed by the property owner or a property manager. The By Owner segment on the lodging spectrum offers a variety of different types of property options from condos to single family residences. Think AirBNB or Home Away – individual property owners don’t necessarily understand the corporate housing industry and might not offer full kitchens, housewares, or amenities like a traditional corporate housing apartment does or a CHBO Complete or Managed Corporate Housing property offers. Depending on where the property is located, there will be different requirements for the minimum length of stay required.
- CHBO Complete: A privately owned property (condo, loft, town home, house, etc.) either managed directly by the property owner or a property management company listed on CorporateHousingByOwner.com (CHBO) that follows all of the requirements set forth by the Corporate Housing Providers Association (CHPA). Usually offered for 30+ day stays but shorter term stays might be permitted depending on where the property is located.
- Managed Corporate Housing: A privately owned property (condo, loft, town home, house, etc.) managed by a licensed residential real estate property management brokerage following the minimum standards set forth by the CHPA and rented out fully furnished for 30+ day stays.
Ultimately, creating one platform that will allow consumers to choose the type of lodging they want for their specific needs would be the best solution, especially since there are very different types available. However, getting all online travel agencies, corporate housing providers, and private owners on one booking platform will most likely never be a reality.
The corporate housing industry is a service based industry, priding itself with superior customer service which is not readily available with instant booking. Today’s consumer still needs to be educated about their lodging choice and how one might be a better fit for their needs than another. This can only be done with person to person interaction. Sure, technology can provide today’s consumers with answers right at their fingertips but at what cost? As Millennials age and start taking over the majority of business travel in the next 5-10 years, how is this going to impact the various industries supporting lodging choice? How can we all work together to provide a seamless booking experience for the new generation? These are all questions that keep us up at night in the corporate housing arena and we as an industry are actively working to continuously improve our standards and offerings not only here in the United States, but Globally as well.
In a recent Zillow article by Amie Fisher “5 Rental Market Predictions: What to Expect in 2017 (and Beyond),” Zillow’s Senior Economist, Dr. Skylar Olsen, predicts 5 rental trends for 2017:
- Overall Rental rate appreciation will stabilize this year. While the overall United States rental rate appreciation is staying around 1.5%, many West Coast metropolitan cities (Seattle, Portland, San Francisco and surrounding Bay Area, San Diego and Denver) won’t see their rental rate appreciation yet below 5%. Overall, there is more rental inventory available which is a large contributing factor to rental rates slowing down.
According to Apartment List, Inc. and their February 2017 rent report, rents increased slightly this month nationwide after four months of rental rate decreases. In 2016, the rental rate was significantly lower and did level off from the dramatic increases in 2014 and 2015.
2. Homeownership Rate will increase slowly as Millennial’s get older. Many people have shifted to renting instead of buying since 2006. But, as Millennial’s get older and make more money, they feel that buying a home is an integral part of their personal freedom. Don’t worry, this shift is going to be gradual and over time so rental vacancies should not be affected yet.
3. Many renters are now being pushed to the suburbs. The Baby Boomers are looking to downsize from their larger homes, perhaps in the suburbs, and move to smaller homes in more walk-able neighborhoods. As a result, there is less inventory available in the urban areas and higher rental rates since there is not enough supply to meet the demand. More people are now looking to surrounding cities and suburbs to find lower rents and more options. Because of this shift, some of the fastest growing rental rates in the nation are in smaller cities and suburbs outside of the Nation’s most expensive metropolises.
4. New home costs will increase due to rising construction costs. Most new home builders are moving their focus on high-end homes since the cost of construction and land is on the rise. This means that more people will still be forced to rent since the average person will not be able to afford the new home prices currently being offered.
Source: The Zillow Group Report
5. Interests rates will increase. Over the past couple of months, interests rates have already begun to increase due to the change in administration. If they continue to rise over the course of this year, individuals and families who might have been considering buying will instead remain in rentals until the rates go back down.
Overall, the cost of rent has started to mellow out a bit but there are still some major factors that are playing into the current rental market nationwide and why we most likely won’t be seeing any major decreases anytime soon.
Luckily, the majority of all AvenueWest Managed Corporate Housing‘s rental properties aren’t affected by the major rental rate hikes impacting apartment communities since our properties are privately owned. Rent like a local in one of our beautifully furnished or unfurnished properties. Call us today 1-800-928-1592.
Here are the nation’s 100 largest markets and their median rental rates and percent changes from Apartment Source, Inc.:
|City||Median 1BD||Median 2BD||M/M Price Change||Y/Y Price Change|
|San Francisco, CA||$3,420||$4,610||0.6%||-1.5%|
|New York, NY||$3,220||$4,110||-0.1%||1.0%|
|Jersey City, NJ||$2,540||$2,900||1.2%||2.1%|
|Los Angeles, CA||$1,870||$2,600||-0.1%||0.5%|
|San Jose, CA||$2,110||$2,600||0.3%||-1.4%|
|San Diego, CA||$1,530||$2,000||0.1%||1.9%|
|Long Beach, CA||$1,390||$2,000||0.8%||6.1%|
|Santa Ana, CA||$1,550||$1,870||0.8%||-1.5%|
|Fort Lauderdale, FL||$1,300||$1,700||-0.3%||2.2%|
|New Orleans, LA||$1,400||$1,600||0.0%||1.0%|
|St. Petersburg, FL||$890||$1,300||0.7%||2.4%|
|St. Paul, MN||$950||$1,200||0.6%||3.0%|
|Fort Worth, TX||$950||$1,170||0.3%||2.8%|
|Virginia Beach, VA||$900||$1,150||0.1%||3.2%|
|Corpus Christi, TX||$830||$1,020||-0.2%||-0.3%|
|San Antonio, TX||$850||$1,010||-0.2%||0.3%|
|St. Louis, MO||$830||$1,000||0.8%||0.5%|
|Colorado Springs, CO||$810||$1,000||-0.3%||4.9%|
|Baton Rouge, LA||$990||$1,000||0.4%||2.6%|
|Salt Lake City, UT||$790||$990||-0.2%||1.5%|
|Las Vegas, NV||$830||$980||0.1%||4.7%|
|San Bernardino, CA||$750||$950||0.1%||0.5%|
|Grand Rapids, MI||$810||$940||-0.1%||1.5%|
|Kansas City, MO||$780||$850||-0.6%||-0.9%|
|Des Moines, IA||$880||$840||0.1%||-2.5%|
|El Paso, TX||$620||$800||0.1%||0.6%|
|Little Rock, AR||$690||$800||0.6%||3.8%|
|Oklahoma City, OK||$650||$780||-0.2%||2.2%|
|Fort Wayne, IN||$490||$600||-0.9%||0.7%|
Millennials are a hot topic right now and have been for the past couple of years with the changing landscape revolving around Millennials in the workforce, talent management, and mobility.
In the November/December 2016 addition of Workforce Magazine, in the article titled “Mobility Needs a Makeover,” Millennials are recognized as great candidates for global assignments since their relocation packages typically cost less than the “older, more encumbered peers.” According to George Bates, the Senior Vice President of Global Marketing and Sales for Graebel:
…Today’s businesses have a lot of reasons for relocating employees, and many of them have figured out that younger staff don’t need the same level of support…Younger employees are more open to the adventure that comes with an oversees assignment, and are often willing to voluntarily go with few if any additional perks. ‘They are young and hungry and eager to learn about a new culture.’ Inviting young, highly skilled employees to voluntarily relocate for a challenging work assignment has been a growing trend…for the past few years…It’s one of the many strategies mobility experts are using to cut the cost and complexity of relocation assignments, while adding value for employees. ‘There is a pervasive assumption among this generation that if they want a strong career, they need this kind of experience.’
According to a study compiled by Brookfield Global Relocation Services, 11% of the employees taking relo assignments are ages 20-29 and when mobility and talent management are combined, the number increases to 22%. Companies are really focusing on getting younger employees into their global leadership roles.
The relocation industry is shifting because of this growing trend of sending younger employees on assignments. More relocation packages are being offered now based on the needs of the company and the value of the employee. Younger employees are also typically easier to relocate since they don’t usually have kids and families to relocate, and since most Millennials rent instead of own, no property managers to find. Millennials are craving these experiences and in exchange, aren’t necessarily looking for higher salaries and benefits to accompany their relocations.
Temporary housing is a large portion of relocation services. According to the 2014 Gen-Y Housing Survey conducted by the Urban Land Institute and UDR, there were some very interesting findings regarding what Millennials are looking for in their accommodations:
These figures represent what Millennial respondents chose in regards to housing. It is from the 2014 Gen Y and Housing Survey compiled by the Urban Land Institute and UDR.
So which cities are millennials relocating to here in the United States?
- Atlanta, GA
- Pittsburg, PA
- Memphis, TN
- Boston, MA
- Austin, TX
- San Diego, CA
- Seattle, WA
- Houston, TX
- Denver, CO
- Charlotte, NC
Good news, we have full-service, local offices in 4 out of these 10 cities and can assist our millennials with short-term, fully furnished temporary housing while they get settled into their new city. All of our properties include the features that are important to the Millennial respondents and even more!
For all of your relocation needs, your local AvenueWest Managed Corporate Housing office is at your service, providing exclusive residential properties including single-family homes, town homes, condos, and apartments. All offices are licensed real estate brokerages and can help you find your perfect home once you are settled. Most of our offices can also help with unfurnished rentals as well.
We are local and know the cities and neighborhoods our properties are located. Plus, we have properties not just in major cities, but in the surrounding suburbs as well.
Submit a housing request, Search for a Real Property in our actual database, or give us a call today 1-800-928-1592 and a local representative will be able to answer all of your questions. You can also Message us on Facebook or Tweet us on Twitter