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Expert Interview: Temporary Corporate Housing

Everybody within the relocation industry knows that temporary corporate housing plays a major role in transferee Kelly Reganexperience. Finding a new home at destination isn’t always a cake walk and for many, temporary housing is a vital benefit. A couple of weeks ago, I had the privilege of picking the brain of Kelly Regan, Executive VP of GO Furnished Housing. It’s so valuable to gain insight from our trusted vendor network here at XONEX and I knew that her experience in the corporate housing world would be valuable to not only those on the RMC side, but also those of you in HR and procurement.

 

Kelly Regan, Executive VP of GO Furnished Housing, has been in the corporate housing industry since 1985 and considers herself a pioneer in the industry. She owned a corporate housing company in Hartford, CT and sold in late 90s, held a number of positions within the industry and started with GO in 2011 after its one year anniversary. She is a former Board of Directors member of the NIHN, the National Interim Housing Network and served on the founding board and President of the Corporate Housing Providers Association CHPA.

 

 

  1. Please provide an overview of the term “Corporate Housing”.

The term corporate housing in the travel industry means renting out a furnished house, apartment, or condo on a temporary basis.  Corporate housing companies negotiate directly with apartment communities to lease apartments (for both long and short term leases), furnish and equip them, then sublease them to corporations and individuals in need  of a place to stay for 30 days or longer. Sometimes the leases are matched directly with the need of the client, sometimes they are leased longer and clients are rotated thru the apartments on a continuous basis.  Corporate Housing gained its popularity as a support to the relocation industry back in the 1980’s. According to the Highland Group Survey, relocation is the #1 market segment for corporate housing in the US and the second largest segment in Canada.

 

  1. With the housing crisis of 2008 and the increased need for extended corporate housing for relocation programs, do you see that slowing down or is it the new norm?

 

As corporate housing becomes more recognized as a viable alternative to hotel stays, the industry will continue to grow.  The housing crisis of 2008 coupled with the tightening in the rental market had an impact on corporate housing in a couple of different ways. Number one: Supply and demand, economics 101 – Increase in demand and with an increase in demand comes an increase in rate. Number two:  In 2008 when we went through the mini recession many of the property management companies that had new housing development on the forefront stopped building and that, coupled with a need for more rentals, created the perfect storm of high demand/ occupancy /high rents nationwide.   We have moved past that in some areas but in others it continues to squeeze the availability of rentals therefore a tightening on availability of corporate housing and continuing increases in rate.

 

  1. Some corporations are moving towards a partial lump sum program for some of the benefits which could include home finding, temp living, final move, and misc. allowance as part of a relocation policy. What are your thoughts/comments pros/cons on this?

 

Lump sum programs are not new and we have all had an opportunity to study them for some time.  In life, the three most stressful situations you will encounter are death, divorce and moving.  Why would you want your valuable employees managing this process during one of the most stressful times of their lives?  Study after study shows the stress of moving in relation to job performance which should outweigh the idea of an employee managing even a small piece of their relocation.

 

  1. When should corporations use hotel stays rather than corporate housing?

 

Corporate housing is ideal for stays of 30 days or more and with the demand for an alternative to hotels rising, some major markets will do stay of less than 30 days.  Even with a business traveler that goes home on weekends, the ability to leave your things behind without checking in and checking out, coupled with the comfort of coming back to the same apartment/second home week over week, with groceries in the fridge and a coffee table to put your feet up on, makes corporate housing ideal for the business traveler as well.

 

  1. What is the future of corporate housing? 

 

One of the major hotel chains did a study a short time ago where they surveyed guests that had stayed at their various hotels for more than a week, over a six month period of time.  Only 21% of the surveyed guests were actually staying in the product they should have been staying in and over 50% of those surveyed should have stayed in an extended stay product.  That equated to 20,000 plus guests, most of which were not even aware that corporate housing was an option for them.  I would say we are going to be around for the long haul!

 

  1. Any cost saving tips you can provide for corporations who provide corporate for their transferees?

 

The biggest expense to the corporate housing provider is rent.  And rent is what drives the rate.  The longer you can commit to a lease, the better the price will be.   Everything has a price to it, size, length of stay, location, availability; if you can be flexible with us, we can work our hardest to get you the best terms, rate and community possible.

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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