Reacting to the changing relocation landscapeTuesday 18 April 2017 by Ben Harper Our commercial Director, Ben Harper, gives his thoughts on the changing relocation sector.
The Relocation Sector has played an important role in our business for many years, but four years ago we realised we could and should be doing more. We built a strategy, focussing on knowledge, profile, relationships and product/service improvement.
The first step was to ask key players the obvious question “what can we do better?”The response was unanimous: quick, accurate and relevant enquiry responses; high quality properties in strategic locations; good value; great service and issue resolution. Obvious stuff, so we took some quick actions: we grew our reservations and account management platform; invested in our supply chain; travelled more to strengthen global relationships and enhanced our technology. The results were good.
Four years on we asked the same question. It's clear that the landscape is changingfrom both a supply and demand perspective. Some of these factors are within our control, some are not. But we wanted to validate this and discuss further with the people who know.
The SACO Relocation Forum
22nd March saw the first SACO Relocation Forum, held at Treves Restaurant at Leman Locke - our new London aparthotel. This informal lunch event saw 20 representatives from 15 of the major relocation management companies come together in an informal setting to discuss three key themes:
1. New models: the impact of the changing landscape - aparthotels, serviced apartments, vacation rental websites (Airbnb).
2. The modern assignee: are they really that different? And how does this impact the product and service we offer?
3. Supply strategies: operators, agencies, hybrids, tech consolidators. Is this choice helpful or confusing?
It was a great afternoon and a lively discussion. One point agreed by all was that we cannot generalise - people, organisations, markets behave differently so the key is flexibility.
This lack of consensus is not helpful when trying to summarise our findings, but here are the highlights:
1. New models
- Airbnb is here to stay, one relocation company with a heavy footprint in the tech space mentioned up to 50% of temporary housing initiations ask for Airbnb or an equivalent.
- Those who are including vacation rental (VR) properties in the mix are doing so out of necessity – it’s still prohibitive from a compliance and process point of view. The overwhelming barrier is financial liability and payment terms / process.
- The answer to “is brand important?” (i.e new aparthotel brands) provided an interesting contradiction: yes, assignees are attracted to brands, and corporate buyers like the consistency/compliance elements, but these new brands must be authentic and feel independent - it’s the anti-brand movement that we keep hearing about.
2. The modern assignee
- Is this new generation of assignees younger or particularly different? We felt perhaps it’s just us getting older…
- What we do know is that the digital age makes everyone experts, so justifying cost/value has become a continuous task.
- The sharing economy has instilled a price perception into procurement, HR and assignees. There’s always a better deal out there. We see this particularly in the temporary housing space as rates are under scrutiny. But, when we wrap it all up, is a £10 per night saving worth the efficiency loss and duty of care risk? The group didn’t think so.
- We agreed that stereotyping assignees by age group isn’t the answer. However, the difference in corporate culture and buying behaviour is becoming more evident -two types of organisations have emerged, where policy is governed by:
a) Choice - which means lump sum policies are prevalent and alternatives to traditional models (such as Airbnb) are accepted.
b) Risk - where a more traditional, controlled approach to relocation policy still prevails.
3. Supply models
- There was a mix of opinion, some preferring a direct to operator approach and some preferring the service of an agent.
- There was, however, a general consensus that new technology providers can blend the best of both.
- After a year of political/economic unrest, demand will shift, so the relocation supply chain must react to more diverse requirements: for us this means regional UK and continental European growth as well as the ability to serve non-core/emerging markets. We have to be agile.
- All this gives supply chain management teams the opportunity to add real value, to take a strategic and commercial approach to the management of the temporary housing category. It’s become high profile, so we need the answers.
The event was wrapped up by Stephen Hanton (CEO, SACO) with a point that conveyed the sentiment of the group; "whilst we are innovating and adapting to a changing landscape, relocation is a people business. From our perspective, a focus on simple hospitality and great service will keep us on the right path."
Another big thanks to those who gave their time to be a part of the event. We’re keen to do more, so let us know if you’d like to be involved and if you have ideas for discussion points.
Ben joined SACO in 2013, bringing a wealth of experience from working in senior sales positions across the travel and serviced apartment sectors, including Go Native (serviced apartment provider), Eurostar and British Airways. Ben leads all the SACO sales activity (Business Development, Key Account Management, Online distribution and reservations) – driving the teams to deliver commercial growth through a balance of tactical and strategic initiatives. Ben is an eloquent speaker on the subject of serviced apartments – based on his knowledge, commercial approach and ability to cut to the chase and not mince his words.Read more articles by Ben Harper