Up until recently, business travel and hospitality would take a few general forms.
Perhaps a fancy hotel downtown. Or less fancy digs near the airport. Or maybe a relatively bland extended-stay operation right off the interstate.
But digital technology and the sharing economy, already the disrupters of so much, are now challenging the status quo when it comes to corporate housing. To learn more about the trend, PYMNTS recently caught up with Kulveer Taggar, co-founder and CEO of Zeus, a digital and mobile-focused operation that puts business travelers into furnished housing that Zeus rents from owners.
Backed by Airbnb, Comcast, Bowery and Initialized Capital, Zeus has raised $90 million in funding. The company is based in San Francisco and operates in the Bay Area, Los Angeles, New York City, Seattle and Washington, D.C. To date, Zeus has hosted more than 17,000 residents for over 500,000 nights. House owners sign a two-year master lease with Zeus, collecting rent on those properties while Zeus handles furnishings, provisions and bookings.
Indeed, in early December, news broke that Zeus had raised $55 million in a series B funding round, according to a blog post by the company. The round was led by TI Platform Management with participation from Airbnb, Spike Ventures, Comcast, CEAS Investments, NFX and Initialized Capital.
“Having Airbnb as one of our investors is great validation for us,” Taggar told PYMNTS. “They obviously have a lot of data and understand the market and how it’s evolving. They want to have a healthy ecosystem around what they do.”
Indeed, that ecosystem, including the parts backed by Airbnb, a sharing economy giant, is expanding, a trend that looks likely to continue into the 2020s.
As PYMNTS has covered, Airbnb earlier in 2019 acquired corporate client-facing extended stay company Urbandoor in a bid to expand into that market. Urbandoor was started in 2015, and it mostly focuses on corporate travelers and work relocation-related activities. However, Urbandoor does business directly with real estate companies, instead of renters, so it is able to get places with amenities that corporate clients would want, like gyms and doormen.
Another company that follows this approach is Greystar, which also works with building owners on creating extended stay experiences for workers.
As for Zeus, the company has grown from a team of three people in 2015 to more than 200 employees throughout five cities on both coasts. According to Taggar, the path to more growth involves significant investment in technology over the short term. Areas of investment include data science and analytics, he said, along with software that makes the onboarding experience more efficient and faster, and improving the search process for potential users and clients. The idea is to remove friction — as much as possible.
“In traditional corporate housing, there is a lot of back and forth [with messages and such],” he told PYMNTS.
Keeping abreast of regulations and local compliance laws is also a prime focus for any company operating in this general space.
The sharing economy is increasingly gaining the attention of politicians and regulators, and not always in ways sharing economy supporters could consider positive. For instance, New Orleans is the site of one of the most significant and ongoing backlashes against the sharing economy, a global trend that probably won’t kill off Airbnb and other major players, but could create more hassles and pressures for some companies struggling to make it in this big, crowded market. Earlier this year, city officials there banned short-term rentals of homes “in historic residential neighborhoods, [with] none at all [allowed] in the Garden District and the French Quarter,” according to a local news report.
Proponents of the ban said such rentals contribute to higher rents for locals and an overall lack of affordable housing. Opponents said short-term rentals, such as those offered via Airbnb, help bring more tourism dollars not only to the city at large, but also to neighborhoods that tourists might not otherwise visit — resulting in local property owners getting a cut of that tourism pie.
“Compliance is of absolute importance to us,” Taggar said.
That could be one of the ongoing challenges for Zeus and other companies. But no matter what, you can bet that corporate housing will get ever more digital and friction-free in the coming years.