• How Uber & Airbnb are Changing the Transportation and Hospitality Industry

     
    FROM THE Spring 2015 ISSUE
     
  • How Uber & Airbnb are Changing the Transportation and Hospitality Industry

     
    FROM THE Spring 2015 ISSUE
     
  • How Uber & Airbnb are Changing the Transportation and Hospitality Industry

     
    FROM THE Spring 2015 ISSUE
     

AS PEOPLE CONTINUE TO SWIPE AND TAP THEIR WAY THROUGH THE DAY, new community-fueled options for transportation and accommodations have started to popularize. In particular, two San Francisco-based companies, Uber and Airbnb, have exploded into the marketplace with a presence in virtually every major city (and even smaller towns, too). While Uber allows regular individuals with cars to act as private drivers, Airbnb is a portal for homeowners to rent out rooms or units in their living quarters to travelers. Both are accessible through smartphone applications that allow users to travel quickly and comfortably.

In a new twist, business professionals have started to become customers at both individual and corporate levels. Since many events include lots of commuting and resting, these new options work for both event planners and participants and will undoubtedly affect getting to and from event destinations. Illinois Meetings + Events looks at the trend and explores just how it might impact the traditional transportation and hospitality industries in the future.

Uber
Uber launched in 2009 with an emphasis on black car service in major metro areas like New York City. After a series of angel investments, it expanded internationally by 2012. The company is now present in more than 70 countries and is valued at approximately $40 billion. According to co-founder Travis Kalanick, there have been distinct growth opportunities he refers to as “accelerants” that have recently propelled Uber past 72 percent of all Fortune 500 companies. These categories are restaurants, nightlife, holidays and events, weather and sports. Planners in all these sectors have traditionally taken transportation into consideration when putting together an agenda, whether in selecting a venue, sending an invitation, drafting a manifest, scheduling a shuttle or tipping off a taxicab company. Since Uber has taken the marketplace by storm, however, attendees have more options than ever to get to and from events, giving planners a boost in providing a fluid system. As consumers become more and more familiar with the service, planners have begun to directly integrate services like Uber and its competitor Lyft into their operations, which has proven to be quite useful. They can easily send clients (or talent) home or dispatch production staff out on errands using the automated account that eliminates the need of a physical credit card. While Uber is incredibly convenient, the downsides include surge pricing during busy times, expensive habit building for consumers, possible passenger mix-ups and additional coordination required for planners. 

Yet Uber has made a valiant effort to engage event audiences through a variety of partnerships and promotions. The basic Uber Event Package includes customized discount codes to give to guests, with VIP options too. Planners can simply fill out an event sponsorship request form online.

By having regional teams on the ground in local markets, Uber also aims to align with geographical happenings—especially for large festivals. For example, the company posts travel tips on its website for the some 300,000 Chicagoans and Chicago visitors who attend Lollapalooza each year. When usage surges in a concentrated area for events such as this, event organizers must plan ahead.

Kyle Casey, senior production manager at AEG Live, one of the country’s largest concert organizers, says, “For large music festivals we create separate pickup and drop-off locations for taxi cabs and Uber riders. For the Uber lot, we map out alphabetical zones to best match drivers and passengers efficiently.”

Sarah Novosad, corporate events manager at Chicago History Museum, says, “If the capabilities of this service can be harnessed for moving large groups of people, we may see a decrease in the need for shuttling guests and providing secure parking—especially for off-the-beaten-path venues previously considered too inaccessible for certain demographics by planners.”

As Uber expands beyond its audience of early adopters and into mass consumption, its impact on the event industry is bound to unfold as busy planners and participants speed from one meeting or event to the next.

Airbnb
Airbnb was founded in 2008 as a direct result of a San Francisco hotel shortage during an Industrial Design Conference, but it really picked up momentum after the 2008 Democratic National Convention caused an even greater demand for local accommodations. Co-founders Brian Chesky, Nathan Blecharczyk and Joe Gebbia were broke and unemployed when they decided to blow up air mattresses in their loft and rent them out online. By spring 2011, over 1 million nights were booked on the platform, mostly by young travelers vacationing and seeking cozy alternatives to cheap hostels.

According to Airbnb, more than 10 percent of users travel for business. This prompted the company to launch a new Business Travel Program aimed at making consumers feel like they’re home away from home while having the most optimal proximity to destinations available. The company partnered with Concur, a business expense tracking system, to help accommodate business travelers who want to immerse themselves in a unique local experience. Furthermore, the platform’s new neighborhood guide allows travelers to search key phrases like “Trendy,” “Peace & Quiet” or “Loved by X” (New Yorkers, for example). The trade-offs include sacrificing room service, housekeeping, business centers and other amenities found in most hotels. As well, most hotels have held room blocks for large groups for both corporate and social affairs, which is especially practical when the event itself is scheduled on the hotel grounds.

Hanson Ansary, president of Allied PRA Chicago—a top destinationmanagement company—says, “Clients with limited budgets for hotel accommodations and/or those that want to make their event more family-friendly are increasingly letting participants choose where they stay, and more and more are looking to Airbnb as an option for multiple-day stays.We are seeing this trend in particular in the FIT business.”

Planners, both professional and personal, can also use the Airbnb platform to seek locations for actual events, too. For intimate occasions, venue sourcing can be done on the website by clicking “suitable for events” under the amenities tab. Though many hosts restrict guests from throwing parties in their residences, some (primarily affluent) homeowners have utilized the platform for renting out their homes for events. This often comes with a required deposit, pay-per-head guest overage and cleaning service, but it just might be worth it.

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