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The corporate apartment alternative
Jan 05, 06 | 8:56 am
By David Grossman, USA TODAY
Farina prefers a corporate apartment to a hotel. "When you're here for more than a week, it's very nice to have a sense of home," says Farina, who hails from Maui. She likes the extra room, a full kitchen, and a washer and dryer in the apartment instead of continually sending clothes out for cleaning. And it was especially nice to have the apartment when her husband visited several times during her extended stay.
For longer stays, a corporate apartment can be more economical than a hotel. For most clients the break-even point is 21 days, according to Jessica Shih, public relations manager for Oakwood Worldwide in Los Angeles. Oakwood is the largest corporate apartment provider in the world handling 75,000 move-ins per year and managing nearly 20,000 apartments in eight countries.
The U.S. Coast Guard began housing reservists in corporate apartments following 9/11. In the first year alone, the Coast Guard saved $3 million over hotel costs according to Kelli Neuharth, a chief warrant officer in the human resources department, located in Alameda, Calif.
Don Watson, vice president operations, at the Hollywood based House of Blues, uses corporate apartments primarily for transferees and new hires. "It's really about us trying to provide as close to homey environment that we can," says Watson. "We're asking people to uproot their lives for 30 or 60 or however long days to go somewhere else and leave their families."
But sometimes families and even pets come along. Watson had to evacuate 295 New Orleans employees and their families following Hurricane Katrina. Those who wanted were relocated to one of the other nine House of Blues locations around the country so they could be gainfully employed while waiting for the New Orleans club to reopen, according to Watson
Watson considers three determining factors for choosing a corporate apartment over a hotel: 1) cost, 2) amenities, and 3) length of stay. With a stay greater than 30 days, corporate apartments are not subject to hotel taxes which can be up to 25% of the room cost in some cases.
An Oakwood studio apartment in San Francisco might rent for approximately $2,400 per month while a deluxe two bedroom apartment lists for around $6,000. Watson often saves even more money by placing several employees in a multiple bedroom unit.
Parking is often included in a corporate apartment rate and there is usually an exercise facility and often a swimming pool. Some corporate apartment buildings even offer billiard and ping pong tables, says Watson.
The entertainment industry is a major customer of corporate housing, according to Kimberly Goodman, senior regional sales manager for Oakwood Corporate Housing, in San Diego. Oakwood provided housing for the filming of The Dukes of Hazard in Baton Rouge and The Grudge, which was filmed in Tokyo.
Corporate apartments may also be customized. When Jackie Chan stayed at an Oakwood apartment in Thailand he requested an extra bedroom solely for his exercise equipment. And when the crew of the Mars Rover mission stayed at a corporate apartment in Pasadena, Oakwood installed blackout curtains so they could conduct business on "Martian time," according to Goodman.
Of course, more traditional companies use corporate apartments, too. "We were one of the first major corporations to utilize corporate housing," says Kevin Maguire, manager of corporate travel and fleet services for Tokyo Electron U.S. Holdings in Austin, which makes machines used in developing and processing semiconductor chips. "We've had as many as 90 (corporate apartment) units at any one time," says Maguire.
Some companies actually own corporate apartments. The Bank of Hawaii owns two apartments in Honolulu, according to Jon Pevna, vice president and travel manager at the bank. The apartments are used by employees relocating or visiting from the bank's other locations in Guam, Saipan, American Samoa and Palau.
But Pevna rarely rents other apartments. He finds that many employees prefer the hotel experience and having someone else clean their room. Hiring a cleaning service for a corporate apartment can quickly add expense. And using corporate apartments can inadvertently increase the bank's negotiated hotel rates. "When we utilize hotels for long-term stays those room nights count towards our total room nights for the year," says Pevna. "So it really winds up being to our advantage to use them because it helps us justify the amount of business we are doing when we negotiate for subsequent years."
When Oakwood was founded in 1960, long-term corporate housing did not exist. But many hotel chains now operate longer term "limited-service" hotels like Marriott's Residence Inn and Hilton's Homewood Suites. Limited-service hotels usually offer a suite or at least a kitchen area with a refrigerator and a microwave. They also include maid service and often a complimentary breakfast and a happy hour.
But a corporate apartment often provides more space and comfort according to Jonathan West, Oakwood's senior vice president of sales and marketing. Corporate apartments often reside in quiet, residential neighborhoods where your neighbors may be permanent residents rather than transient hotel guests. For those who commute to work and return home each weekend, a corporate apartment eliminates the need to move in and out each week.
I once worked for a company with a dedicated corporate apartment suite at the Waldorf Hotel in New York City. Employees were allowed to extend business trips into a "free" New York weekend. It certainly didn't have the amenities of a true corporate apartment and it was always in high demand. But it sure was nice to have "a suite at the Waldorf" whenever I could commandeer it!
Source: USA TODAY, David Grossman
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