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July 15, 2004 - domain
Stay a little bit longer
What does a company or family renovating their home do if they want accommodation for just a month or two?
The choice is between a hotel or serviced apartment or taking a three- or six-month lease on a house or unit. The first option is expensive, the second may be longer than needed.
In Sydney, the market for short-tem executive stays is dominated by serviced apartment providers, such as Medina, Quest and Waldorf.
But a company that started as a backyard operation in Melbourne five years ago with a bankroll of just $5000 is now turning over millions of dollars a year by offering a third alternative, corporate housing.
Not surprisingly, it is an idea borrowed from the United States. There, corporate housing is the fastest growing segment of the hotel/lodging industry, with more than 500 providers turning over about $3 billion a year. It is based on the principle of “providing more than double the space of hotel rooms at less than half the cost”.
In Australia, Corporate Housing was founded by Kay Barney in 1999, when her husband Craig was transferred from Sydney to Melbourne. “We lived in a tiny services apartment for a few months. There was nowhere for our one-year-old to play or for us to entertain. Craig’s company was paying a very high nightly rate for accommodation totally inadequate for an extended stay like ours,” Barney says.
The company lets short-term apartments in the capital cities, usually for one to three months, to companies with staff relocating or on short-term assignment, and to families wanting a place to live while renovating or between homes. A single fee incorporates accommodation, water, electricity and housekeeping.
Corporate Housing says its rates are a saving of more than 50 per cent against hotels and 40 per cent against serviced apartments. Typically, a three- or four-star hotel will cost $1500 a week and a Corporate Housing apartment about $700.
Local clients include some big corporations – among them Deloitte, Ernst & Young, Oracle, PeopleSoft, ANZ, Australia Post, Smorgon and KPMG.
In its first three years, Corporate Housing’s turnover increased 150 per cent a year. Last year, a former chief executive officer of food manufacturer Simplot, Chris Miller, helped plan national expansion and now it has hundreds of properties in Melbourne, Sydney, Canberra, Perth, Brisbane and New Zealand. See www.corporatehousing.com.au for more details.
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