Business Lodging Takes On a Savings Trend : Executive Travel

By CAROL SMITH

Dec. 8, 1993 12 AM PT

CAROL SMITH <i> is a free-lance writer based in Pasadena</i>

In today’s cost-conscious travel climate, a new breed of corporate traveler is emerging. Instead of racking up frequent-flier miles traveling back and forth to cities for a few days at a time, more travelers are spending a few weeks or even a few months at their destinations.

It can be cheaper for a company to have someone stay for a longer period and get all business finished rather than fly the person in and out, said Cliff Lavin, vice president and general manager of Oakwood Corporate Housing, a Los Angeles-based company that arranges housing for traveling executives. As travel patterns change, the lodging industry is having to change too. Two of the hottest growth segments in the market reflect these changes.

Corporate Housing

“Five years ago when I said I was in corporate housing, people didn’t have a clue what it was,” Lavin said. “Now it is starting to emerge as a major player” in the lodging market.

Indeed, demand was so great that the company was beginning to run out of room at its 40 apartment complexes around the country. Last year, it started a custom corporate housing division, through which it will find and set up housing for people traveling on business anywhere in the country.

The extended-stay corporate housing industry is so new that there are no formal numbers documenting its growth, Lavin said. Oakwood has 29 branch offices nationwide and plans to open another 19 next year. It is also planning an international expansion.

The cost of a stay at an Oakwood apartment is typically half that of a downtown luxury hotel, Lavin said. However, to get the rate, guests must pay for a minimum of 30 days.

Oakwood apartments offer amenities not found in typical apartment complexes, such as on-site car rental offices, convenience stores and dry cleaners. Otherwise, the apartments have the types of services found in hotels, including fitness centers, pools, tennis courts, spas and maid service.

For more information on Oakwood Corporate Housing, call (800) 888-0808 or (310) 478-1021.

To capitalize on the growing corporate customer base, many smaller apartment owners and managers have linked forces through the National Interim Housing Network, a Dallas-based organization that represents more than 3,100 apartment buildings across the country.

“We refer business to one another,” said Cindy Gould of TLC Executive Suites, a member of the network based in Pasadena.

TLC Executive Suites will find temporary housing--whether it be apartments, houses or condominiums--for travelers who want to stay a week or more in an area. Prices are comparable to a stay in a Holiday Inn, Gould said.

For more information on the National Interim Housing Network, call (214) 385-7357.

All-Suite Hotels

Of course, many business travelers still prefer the ambience and versatility of hotel settings. It is this travel segment that is fueling a surge in the all-suite hotel business.

All-suite hotels are just what they sound like: hotels where every unit has at least two rooms, said Pamela Lanier, who writes hotel and travel guides distributed by Berkeley-based Ten Speed Press. She recently updated her “All-Suite Hotel Guide,” now in its sixth edition. Six years ago, there were about 600 all-suite hotels included in the guide, she said. Today there are well over 1,200. “It’s an incredibly fast-growing area,” she said.

Although they serve different segments of the market, all-suite hotels and corporate apartments have one thing in common: They enable travelers to conduct business in their rooms conveniently.

Suites typically cost 10% to 15% more per night than a traditional business hotel room, but companies find that the suites can be more cost-effective. Suites can double as meeting rooms and even display booths, eliminating the need to conduct business over expensive meals or rent halls.

Lanier said she recently attended a trade show where presenters set up displays in the front suite rooms. People wandered from room to room gathering information without feeling as if they were in someone’s hotel room, she said.

Suite Conversions

While chains such as Embassy Suites, Residence Inns and Homewood Suites now offer all-suite hotels nationwide, another trend is the small downtown residential hotel or apartment complex that has been converted, Lanier said.

Many of these converted apartment buildings have the advantage of being located in prime downtown areas within walking distance of main city attractions or convention halls. The Elles’mere in San Francisco, for example, is a 1923 former residential hotel that has been converted to suites and is within walking distance of Union Square. Across the country, Manhattan East Suites has redone buildings in nine locations.

Because real estate in those areas is so expensive, Lanier said, developers have found it more economical to take an elegant old residential hotel and refurbish it as a suite hotel, rather than knocking it down and building something new. In contrast, most of the chain all-suite hotels are built near airports and new industrial parks.

The average stay in suite hotels is three to five days. Most offer free breakfasts and a cocktail hour. For more information on the “All-Suite Hotel Guide,” call (510) 644-8018 or write P.O. Box 20429, Oakland, CA 94620. The guide is available in bookstores.

Business Travel Facts Companies are apparently faster at reimbursing travel expenses than employees are at submitting expense reports, according to a survey of corporate travel managers by Runzheimer International, a management consulting firm based in Rochester, Wis. It costs the majority of companies $25 or less to process a single expense report, Runzheimer found. * How soon do business travelers submit expense report:

Within a week: 45%

Within a month: 47%

After a month: 8% * How son do companies reimburse travel expenses?

Within one week: 56%

Within two weeks: 37%

More than two weeks: 6% * How do companies reimburse employees?

Check to employee: 96%

Electronic deposit to employee personal account: 13%

Electronic credit to employee credit card: 3%

Reimbursement in paycheck: 2% * The cost of processing expense reports: Per report: Percentage of companies

Under $10: 18%

$10-$25: 43%