CHPA, or the Corporate Housing Providers Association is the international trade organization for the multi billion dollar industry of corporate housing or more simply temporary living. Recently CHPA asked several corporate housing providers to clarify common questions of corporate housing guests. We thought this was great information for both corporate housing providers and tenants to know. The following excerpts have been approved for re-print by CHPA.
Question 1: Temporary Living
The industry average for temporary living is $140 per day. This equates to a $4200 per month apartment and seems expensive. What comprises this rate?
When seeking quotes for corporate housing, guests are often tempted to compare this lodging option to extended stay hotel rates. While rates may be similar in some markets, they are vastly different in many others. Be sure to analyze that you are comparing like items. Simply comparing daily rate is comparing apples to oranges. Think beyond just a roof and a bed, and includes all the items that make a house a home.
Included in the rate are current housewares, linens, furniture, electronics, décor and lighting, and a single source for all utilities and customer service oversight. Other common and readily available services are cable television or satellite service, movie options, wireless internet and even local phone service and housekeeping. Corporate housing also includes many upscale amenities and services expected in how we live today as this housing is in a residential setting. Services such as grocery shopping, business centers, fitness centers, car services and pet-friendly properties are readily available if needed in this temporary space.
When breaking down the cost of corporate housing even further to illustrate how all of the additional costs and expenses are factored into the price of the accommodation, the profit margins are very small and getting smaller as rents continue to increase. Outside of rent, the additional costs can be 50% or more of the total cost.
“Factoring in all of the housewares and furniture plus the utilities, the net cost is more than double the base rent per month,” Gavan James, CCHP, President and CEO of Nomad Temporary Housing explains. “Finally, they must have staff to administer their business, sell, set-up, clean and service the apartment and factor in vacancy cost for when the apartment is not rented. The net result is often a 5% profit margin on that apartment.”
With more square footage, more residential-type rental amenities, as well as access to all resident functions, corporate house guests can participate in a community rather than just pass through a transient environment.
If you have more questions you can always visit CHBO’s FAQ Page.