How to cut your accommodation costs as a contractor

If you’ve decided to take a new contract job away from home, you will have to factor in the cost of accommodation when negotiating rates. But what are the typical costs you will face, and what is the most tax-efficient type of accommodation?

There are two main types of contractors; those who work within commuting distance to their projects or place of work, and those who don’t.

Those who commute face travelling costs, but if a project comes up and they’re away from home for a few days, it’s typically easy enough to find somewhere to stay for a few nights.

However, those who spend a large portion of the year on the road have to pay for accommodation for each of their projects, in addition to paying for a property that is occupied by their family – or left empty.

Of all the costs that travelling contractors face, accommodation is by far the largest, and each type of accommodation has its own positives and negatives, which we explore further in this article.

Types of accommodation

The type of accommodation you use will significantly influence your bottom line, which is why it’s important to calculate the total cost before committing to a decision, particularly a long-term one.

These are the most common types of accommodation available to contractors:

• Hotel – Hotels are the first thing that springs to mind when we think of an overnight stay, which is how large booking companies like Booking, Kayak, Late Rooms, and Trivago make their money. Primarily suited to holiday makers and short-term business travellers, they are usually located in city centres and business hubs, and almost always have availability. Whilst some hotels offer kitchenette facilities, a large drawback is that hotel rooms typically don’t include them, which means the cost of takeaway or eating out every night needs to be considered, and apartments offered by hotels are usually more expensive than dedicated serviced accommodation.
• B&B – One of the most cost-effective solutions for corporate accommodation is bed and breakfasts that offer private rooms with shared living and kitchen facilities. For an individual, these are usually cheaper than hotels and serviced accommodation, but they don’t provide the same privacy that serviced accommodation and rental property offer. For larger groups, it is typically more cost-effective to find an entire property, as the price per person per night drops with larger bookings.
• Airbnb – Unlike traditional B&Bs, Airbnb will often offer the greatest range of locations, however you aren’t likely to get the same experience and services as you will at a bed and breakfast or a hotel. Airbnb is currently the easiest platform to use, and although it’s a hassle to constantly move around to different properties, you’ll find the greatest amount of choice. One downside of Airbnb is it is considerably skewed to leisure guests and as such, not specialising in more complex business needs. For long-term stays and large contractor groups, ComfyWorkers provides a specialist alternative for businesses.
• Serviced accommodation – In general, serviced accommodation is the most cost-effective for contractors because it provides all the amenities of a home, but unlike rental properties, they don’t require the commitment of a minimum rental term. Serviced accommodation offers the greatest benefits for larger groups because often rooms feature different layout options that can allow for multiple rooms that not only lower price, but offer flexibility required for projects that involve contractors coming and going. Unlike the other providers, serviced accommodation providers also offer the option for Monday to Friday stays, and services such as housekeeping are often optional and can lower costs. Property sizes range from a studio apartment right up to large 5+ bedroom houses, perfect for larger groups of contractors making them ideal for a week all the way up to multiple months.
• Rental properties – Without additional expenses added on top, this is initially the most cost-effective form of accommodation. Unlike serviced accommodation, rental properties don’t have the same costs of housekeeping and this is often reflected in the initial price, but there are additional expenses that can often outweigh the lower starting cost. Rentals can also be tax deductible and efficient. If structured for long term projects that stretch for longer than a year, renting can provide an attractive solution for accommodation, but there are four issues that aren’t included in any of the other options: rentals require a deposit, are almost always unfurnished, you have to pay for bills which creates significant admin, and require a minimum stay that can be difficult for contractors who aren’t sure how long they’ll be staying for. As these costs can drastically affect your bottom line, as well as create a headache, it’s important to consider everything before getting excited about the lowest price.

7 Money-saving tips

Armed with a list of pros and cons for each, regardless of which type of accommodation you’re leaning towards, there are several factors which will affect your total expenditure:

• Timing – Booking early is essential when looking for the best prices for contractor accommodation. Contractors often have very little notice when starting a new project, and it can often be a race to find suitable accommodation. Especially when heading into the summer months, contractors need to contend with holiday makers, and for longer projects, this often breaks up a stay and involves moving once or more during the course of a project. The earlier you book, the fewer moves you’ll have to make. It’s worth noting that although serviced accommodation and rental property prices do fluctuate, hotel prices can often be more expensive when booking at the last minute.
• Duration – The longer you stay, the more you can negotiate. Even though accommodation hosts can often command a greater price for their properties in summer months, if COVID-19 has taught us anything, it’s that guaranteed occupancy at a lower cost is better than uncertainty, which is why you’ll likely get a lower price for a longer stay. Not only is it less of a hassle to not have to move, hosts are more likely to offer you a better deal if it means they won’t have empty rooms or an empty property.
• Per person – Price per person per night is the contractor’s best friend when booking accommodation. You might wince when you see a 4 bedroom property for £200 a night, but you’re better off working out your numbers per person rather than the total cost. Unlike a hotel room or a room in a bed and breakfast or guest house, serviced accommodation offers greater flexibility. If the £200 property sleeps 4, £50 a night per person works out much better than £80 per night for a room at a hotel.
• Knowing where to look – Knowing where to look is paramount to finding a property. If you’re looking for a last minute hotel, you’re likely to find a better deal on Late Rooms than Booking. If you’re looking for a very specific location, Airbnb is likely to give you more options than hotels. If you’re looking for serviced accommodation or complex needs with large teams, you’re more likely to find what you’re looking for on a platform like Comfy Workers that specialises in that type of accommodation.
• Use a partner agency – if you are booking for multiple individuals or teams you can quickly realise how much time coordinating and managing this is. Working with a partner agency that specialises in this can help reduce the admin and coordination time internally, not to mention negotiate on your behalf at favourable rates to save you money as well.
• Loyalty schemes – if you stay away overnight with work frequently, find one provider and use them wherever possible. The savings add up and you’re likely to receive additional perks and discounts on your stays as well.
• Book direct – Whilst online platforms offer a range of discounts and deals, often finding providers and talking directly you’ll find the best rates in the properties that you are looking for. Large chains have little flexibility here, but serviced accommodation providers, especially for medium to long staying guests will be helpful to accommodate you in the right property at the best rates.

Summary

There is a wide range of accommodation choices to suit different needs, but for the specific requirements of contractors, there are two winners: For short term stays of up to three nights, Airbnb offers the broadest amount of choice, coupled with the largest price range to accommodate all budgets. For stays of a week and longer, serviced accommodation comes out on top, due to flexibility, price, accommodation of larger groups, and the option to stay from Monday to Friday.

This guest contribution was provided by Greg Dorban, CEO and Founder of ComfyWorkers, a specialist provider of contractor and corporating housing.