How the Corporate Housing Market is Fairing
The corporate housing sector has been taking a serious hit in the years since 9/11; international travel restrictions and increased security measures hit the sector hard, especially the gateway cities of New York and San Francisco. The economy has declined severely shortly thereafter, culminating in the last year or so because of extremely harsh trading conditions that have hit the sector even harder.
Many national companies have withdrawn from providing corporate housing which has affected not just the major corporate housing markets but has spread across the nation. Chicago, Denver, New Orleans and many other cities have suffered a significant downturn in the corporate housing market, but this is not a cloud without a silver lining.
However, there are some parts of the market that are actually enjoying the down turn; that's because they are seeing benefits from it. Point in fact, in quite a few ways! Competition for business has increased with those players still active in the market offering extremely low rental bases to work from which, reduces the cost of companies using corporate housing. Those national companies who are still operating in the market are leaner and much more responsive to customer demands; they have to be because of the emergence of smaller “mom and pop” operations as well as a growth in mid-sized, regional providers.
The current economic recession is actually slimming the industry stock down, and what will emerge is going to be a much leaner, more profitable and more customer-orientated set of service offerings than has so far been experienced. As the economy goes through a bit of a baby recovery, we can expect very consequential pick up in the business going to corporate housing providers.
Let us not ignore another very important aspect. Since 9/11, homeland security has not just implemented restrictions on entry to the country and on travel itself, but has created a huge perception that it is much more difficult to travel – to enter the United States, to obtain the visas and permits necessary to work here. It has also engendered the perception that the cost has dramatically increased, which no longer makes it economically viable to pursue for employers.
There is an enormous difference between the perception and the reality, which is something the Obama Administration has been keen to demonstrate. Clearly, the administration is attempting to make a point by hosting the G20 Summit in Pittsburgh in September, 2009. In summary, the customer is getting an exceptionally good deal financially while the service offering (and how it is delivered) have both benefitted from a reinvigorated approach.
The corporate housing market can expect to grow significantly as the economic recovery takes place and as the reality of security measures for travel and entry to the US become more clearly understood.
This article has been provided by Mary Deutch Hopkins, an esteemed Richmond Va corporate housing woman at Dabneyproperties.com, a temporary corporate housing provider in the Richmond area and beyond.
