There are several reasons you might be able considering corporate apartments such as, employees traveling between office locations, long-term client projects, or employee relocation. While not all companies can afford to build their own apartment complex like Facebook, they do need to consider how to accommodate their traveling employees while minimizing spend.
One of the obvious considerations is a corporate apartment. But is this the right choice for your organization? We’ll be diving into things to consider when making that decision and alternatives if it’s not the right choice.
Things to Consider
When making a decision about corporate housing, you’ll want to know what the ROI is going be first and foremost. Decisions like this are made around convenience and lowering costs, so it makes sense to figure out cost effectiveness. However, the common mistake here is that context is left out and only numbers are considered.
The context is what will shape the numbers so that you can compare apples to apples. Start with these questions:
- How much travel is happening to this one spot – are multiple employees going at the same time or just one? Is it multiple trips back and forth or a long-term stay?
- What is driving the travel – did you open a new office? Take on a long-term client project?
- Is there a change in the hotel rates for seasonality? If so, what are the rates for the seasons travel is happening?
Next, gather together the costs… all of the costs. This might include things outside of the apartment or hotel itself. Such as:
- Apartment cleaning costs
- Stocking the apartment (food, supplies, etc)
Once you have the costs, break them down into like-buckets. One time costs versus recurring costs, long-term versus short-term costs. Then you can figure out what the cost per time period will be.
Here is a simple, quick example to demonstrate.
Company Beta has been constantly sending employees to Manhattan because they recently opened a new office there and want to fold the new team into the existing culture and processes. They are considering a corporate apartment because they expect travel to the office to continue.
Currently they send one employee once a month for a week. To determine ROI, they are comparing the average cost of a hotel stay year round for one week a month (12 weeks a year) versus the cost of renting a corporate apartment for one year. They found an apartment on the same block as the new office, but the hotels in that area are pricier than other areas, so they are factoring the cost of a taxi two ways for 5 days a month into the cost of the hotel room.
The apartment is all inclusive of cleaning and stocking with supplies, making it pricier but easier to manage.
Their ROI calculation will be:
[(Average Hotel Stay per week x 12) + (Taxi to office x (10 x 12))] vs [Monthly rent of apt x 12]
This calculation will vary depending on the context specific to your situation, so it’s important to list them all out and do your research for the area.
Alternatives to Corporate Housing
If the calculation is close, it might be worthwhile to consider alternatives until you’re sure that taking on the liabilities of renting a corporate apartment are the right choice.
Contact local hotels in the area to see if you can create a corporate account and lock in more favorable rates. You can often work out other expenses such as parking and meals as well.
Sometimes staying in a hotel for a few weeks isn’t really comfortable for employees, so something like an Airbnb which provides the comforts of an apartment without the long-term commitment is a good choice. With their recently launched For Business model, booking and billings are easier making it a more convenient option for companies.