The lodging platform Airbnb has been vying for a share of the trillion-dollar global business travel market since 2014, when it first launched “Airbnb for Business” and began advertising houses and apartments with desks, Wi-Fi, and other essential amenities to users traveling for work. Since then, the service has been rebranded as “Airbnb for Work,” and on Monday, the company announced that it was growing exponentially, with almost 700,000 companies having employees sign up and book travel through Airbnb. That’s up from 250,000 as of April 2017. Business travel bookings tripled from 2015 to 2016, then tripled again from 2016 to 2017, Airbnb boasted.
In its blog post announcing these new user numbers, Airbnb also highlighted some fun facts about how people are using Airbnb for Work:
- Bleisure (combining business trips with leisure stays) – we continue to see people tack on weekend days to explore the cities they’re traveling to. More than 30% of Airbnb for Work bookings in the past year include at least one weekend night.
- “Traditional” business trips – a year ago, the average trip on Airbnb was six nights or more; today, the average stay with Airbnb for Work is about five days, and the fastest growing segment of trips is three nights or less. Business travelers are increasingly using Airbnb for shorter trips, which they may have booked hotels for in the past.
- Collaboration – nearly 60 percent of Airbnb for Work trips in the last year had more than one guest. Of the 60 percent of Airbnb for Work trips with more than one guest, nearly 40 percent of had three or more guests. Teams are traveling together to bond and collaborate.
- Mobility – we’re seeing extended stays and relocations being booked on Airbnb for many different reasons and lengths of time — ranging from long business trips or training sessions that require several weeks away, to on-site projects that can last several months to a year. In the past year alone, we’ve seen stays with Airbnb for Work 14 days or longer grow nearly 3X.
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Toronto is the crown jewel of Canada’s growing tech sector and a centerpiece of Prime Minister Justin Trudeau’s ambitions to make the country a leader in emerging technologies like artificial intelligence. The city boasts a high-quality research university and a highly educated talent pool. Unfortunately, it’s also starting to experience the same problem faced by other major cities in North America: a shortage of housing, leading to high living costs for young professionals.
The Toronto Region Board of Trade has warned that rising housing costs and a short supply of decent apartments in the greater Toronto area risks harming the city’s ability to attract and retain talent, according to the Star’s real estate reporter Tess Kalinowski:
A survey by the business group last year shows 42 per cent of young professionals would consider leaving the region because of the high cost of housing. That has prompted the board to publish a Housing Policy Playbook in advance of the June provincial election with five recommendations for how the next government should tackle the housing crunch. The proposals range from building condos over transit stations to expediting construction permits. …
On July 7, Facebook announced it would be “Investing in Menlo Park and the Community” by expanding its headquarters with a mixed-use village called Willow Campus that will have grocery stores, a pharmacy, and even housing.
John Tenanes, Facebook’s VP of Global Facilities and Real Estate, wrote in a post at Facebook’s news blog that the former Menlo Science & Technology Park, a 21-building property purchased by the company in February 2015, will become 135,000 square feet of retail space and 1,500 housing units by early 2021, all open to the public. Recode is reporting there will also be 1.75 million square feet of office space, though it is uncertain whether that will be just for Facebook or also leased to other organizations.
“We found a home when we moved to Menlo Park in 2011,” the blog post opened. “We are part of this community, and being here makes it possible for us to work on our mission to bring the world closer together.”
Tenanes added that 15 percent of the housing units will be offered at below market rates, which should help an area in dire need of affordable housing, and housing in general. Demand has risen considerably since Facebook moved into town, causing rents to skyrocket while creating shortages in supply and displacing lower-income households. Even Facebook employees have had trouble finding affordable housing near headquarters; the company introduced a housing benefit in late 2015 to help staff live closer to high-cost Menlo Park.
Facebook also plans to invest in Menlo Park’s infrastructure, including “tens of millions of dollars” to improve local highway US101, Tenanes wrote, adding that “Willow Campus will be an opportunity to catalyze regional transit investment by providing planned density sufficient to support new east-west connections.”
Last year, Indeed.com analyzed its job search data and found that a remarkably high proportion of technology workers in the San Francisco Bay Area were looking for jobs in other parts of the US. Marketwatch passes along some updated findings from Indeed showing that this trend hasn’t changed:
From October 2016 to January 2017, more than 38% of technology job seekers in the San Francisco and San Jose area have clicked on postings outside of the area, up from just 27% four years ago. That trend stands out especially among mid-career employees between 45 and 54 years of age: Half of the Silicon Valley technology job seekers in this age group have been looking for opportunities beyond the border.
And it’s not the only study to suggest tech workers are looking beyond San Francisco. The Federal Reserve’s most recent regional economic round-up on the San Francisco district said that talent shortages in the technology industry have both increased the time required to fill positions and the cost per hire.
Indeed attributes tech workers’ desire to get out of Silicon Valley primarily to the high cost of living there, noting that the median monthly rent for a one-bedroom apartment is $3,000 in San Francisco and $2,500 in San Jose, or more than twice the national average of $1,200 a month. The Bay Area isn’t the only metropolitan area where high housing costs are making talent think twice about settling there—business leaders in Los Angeles, for example, recently identified housing costs as a barrier to attracting talent to the city—but it draws the most attention given Silicon Valley’s importance to the US economy today.
In fact, Elaine Ou argues at Bloomberg View, the sky-high rents in the Bay Area may be a bigger factor in the tech sector’s talent shortage than the skills gap. The industry, she writes, “doesn’t have a skills shortage so much as a shortage of employees who can afford to live within commuting distance of their jobs”:
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A new report from the University of Southern California and the Los Angeles Business Council warns that the high cost of housing in Los Angeles is making it harder for employers there to attract and retain high performers. Business Insider outlines the report’s findings:
For the study — which was led by Raphael Bostic, a USC Price School of Public Policy Professor and the newly appointed head of the Atlanta Federal Reserve — USC surveyed 14 of Los Angeles’ largest employers, which account for nearly 200,000 jobs in the region. Nearly 60% of the employers say Los Angeles’ high cost of living impacts employee retention, with 75% naming housing costs as a specific concern, according to the survey results. Further, 10 employers (71%) view high housing costs as “a barrier” to hiring new mid- and upper-level employees. …
Southern California’s real estate market has been red hot for a few years now, thanks to low mortgage rates, a strengthening economy, and dwindling home supply. Zillow pegs the median home value in Los Angeles at $616,900 and the median rent at about $2,860. That’s compared to $195,700 and $1,500 for the US as a whole.
The City of Angels is not the only US locality where workers and employers are facing this challenge. Further north, exorbitant rents in the San Francisco Bay Area are one factor making tech talent think twice before taking a job in Silicon Valley, and even encouraging some employees there to seek out opportunities to relocate to less expensive cities last year. Housing is also a key contributor to the high cost of living in other major metropolitan areas such as New York, Boston, and Washington, D.C. That reality has motivated some companies to experiment with housing benefits, offering employees money to help them buy or rent homes closer to an office located in a high-cost area, or to give cost-of-living raises to employees in these cities, as REI did last year.
Workplace Insight’s Sara Bean flags a new report from property consultancy Lambert Smith Hampton, which predicts that many UK businesses will move out of London in favor of cheaper locations in other parts of the country over the coming decade:
For cities such as Bristol, Manchester and Birmingham, staff and premises costs (including rent, business rates, day-to-day running costs etc) for a new-build office collectively amount to just over £50,000 per workstation. Measured on the same basis, a workstation in London’s Midtown area carries an annual cost of well over £80,000. In practice, this means that the overall cost of occupying a new-build office in a location such as Bristol for 500 staff stands at £27m per annum; in Midtown, the total cost would be over £13m higher each year.
Data from the job-search site Indeed.com indicates that many tech workers currently living in Silicon Valley are trying to relocate to less expensive parts of the country, Quartz’s Ashley Rodriguez reports:
Indeed.com found that the share of searches from within the Bay Area for tech jobs outside of it is on the rise. As of Feb. 1, 35% of tech job searches on Indeed.com from the region were for jobs elsewhere, data from the company shows. That share, which is based on 30-day averages and adjusted for seasonal factors, was up about 30% year-over-year.
The portion of searches for work outside of the Bay Area—which has the most expensive rents in the US—was also highest among people ages 31 to 40, suggesting that people are leaving to find better opportunities elsewhere or to settle down in more affordable areas where they can improve their quality of life.