Interview: Furnished Quarters' Craig Partin, Business Travel News
Oct 19, 2011 14:06 PM
Corporate housing supplier Furnished Quarters recently hired Craig Partin as its director of sales. He spoke recently to BTN lodging editor Michael B. Baker about recent industry growth trends as well as the potential to make online booking more widely available across the industry.
How is the corporate housing industry faring overall?
Last year when things were still economically not doing super-great for most businesses, the corporate housing industry in general—not just Furnished Quarters—grew 12 percent. The business is growing dynamically. Hotels can't build because of construction costs, their inability to get loans and other various reasons. It's actually pushed corporate housing further to the forefront. People are using it more and understanding it more. We have a lot more international travelers who are coming from around the globe to New York City. You're also finding that people are not only staying with us more, they're staying with us longer. This is true for the entire corporate housing industry. The average stay used to be about 45 days. It's now moved up to about 125 days. What's also happening throughout the entire United States is that the rental rates for the vacant apartments that rent, furnish and then sublet, the vacant rents are skyrocketing in virtually every market. As individuals are not able to buy houses, more people are renting. You've got vacancy rates in some cities that are less than 1 percent, and rent increases for those apartments at 12 or 13 percent. The increased rental rates are passed along to corporate housing providers, and this affects pricing in the marketplace.
Are any segments rebounding faster than others?
The international travel segment, where you have people coming for short-term assignments of 12 to 24 months, has grown dramatically. Companies in general are becoming more global and bringing people from other cultures to cross-train. The financial companies are slowly starting to come back. That used to be, especially in New York City, absolutely enormous. The AIGs of the world and the Morgan Stanleys of the world are building back their business that used to be with us. Entertainment is very big in the Northeast. Lots of city governments are offering tax rebates to production companies for filming in the cities, so it brings extra income into the cities themselves. We're seeing a ton of films being filmed in New York City and Boston. Those are our strongest segments.
What will your role be at Furnished Quarters?
I've been brought on board to further develop their sales program and assist developing their marketing program. They have a very strong presence with web and individual booking and corporations, so my job is to further all of that along. My experience brings to them a little bit more ability to connect with people who have been in the corporate housing industry a long time. There are lots of opportunities for us to grow the business.
Has Furnished Quarters been adding rooms?
We have grown in the last 24 months by about 25 percent. We right now are hovering around 1,000 units in four states: Connecticut, New Jersey, New York and Massachusetts. We founded an organization called Go Furnished Housing Network. It is a conglomeration of providers like us throughout the United States and the world that are the best-in-class local or regional providers in their areas. If we have one of our clients who primarily uses us in Boston and wants to be in Dallas, we partner with other members in Dallas to provide a one-stop shop for that company. That has grown dramatically as well.
What are the trends related to booking corporate housing?
There is a trend for corporate housing companies to become more involved in the global distribution systems. It's a bit harder for the GDS service providers to do that, because we're not site-specific. We have in Manhattan, for instance, 52 different buildings. We might have five apartments in one building, 10 in another, two in another, so for the GDSs, it becomes a different location for each one of those and very difficult to be booked that way. About 95 percent of our business is booked either direct by phone call or email. That's even true for travel agents. They'll call us and make the bookings. A lot more is done the old-fashioned way. Furnished Quarters specifically is relaunching its website. Part of what we're rebuilding is going to be a facet of the booking tool, an automatic booking situation not only for individuals, which is what we have now, but also for corporations and travel agents to do it.
I recall talk in New York a few years ago about lengthening minimum-stay requirements for corporate housing providers. Is that still an issue?
It was 90 days, which would absolutely have damaged the corporate housing industry. That is dead. We have a pretty strong lobbying group. The Corporate Housing Providers Association lobbied pretty hard to not let that happen, and we're very glad they did. In most cities, there's usually a minimum of 30 days, and that's driven by local governments.