The Board of Trade Building at One India Street in Boston is owned by Oakwood Worldwide and provides 94 one- and two-bedroom units for corporate travelers.

With many companies cutting back on travel and employee relocation, providers of corporate or extended-stay housing are feeling the squeeze.

Some providers of corporate housing in Massachusetts are reporting vacancies of up to 20 percent – a rate much higher than they typically would experience this time of year.

Others are offering special discounts and incentives to draw customers their way, particularly since hotels hurting for business are also promoting lower room rates.

It [corporate housing] is suffering as every other segment of the economy is, said Terry Flahive, president of Lowell-based Princeton Properties.

Corporate housing relies on special projects and relocations, said Flahive. Most companies today have curtailed those two areas.

For much of the late 1990s when the economy was booming, many companies relocating employees or embarking on projects in cities outside of their main operations turned to corporate housing. That’s mostly because extended-stay lodging is considered a cheaper and more comfortable alternative than staying at pricey hotel rooms for weeks and months at a time.

Many corporate housing companies work out deals with landlords to rent studios and apartments, and then take care of furniture rentals, utility setup and other accommodations for clients.

Princeton Properties, however, owns its units and furniture. One of the largest Massachusetts-based companies offering such lodging, Princeton Properties sets aside units for business travelers in typical apartment complexes it owns and operates.

The company has several hundred extended-stay apartments in Eastern Massachusetts, Southern New Hampshire and Portland, Maine. Fully furnished apartments range in prices from $1,500 to $2,500 per month.

Flahive said the company started to feel the effects of the economic downturn during the summer, but the Sept. 11 terrorist attack accelerated the whole process.

Today, Flahive estimates the company is dealing with a 20 percent vacancy rate. But Princeton is not implementing incentives like some other businesses. Instead, Flahive said Princeton will be reflective of the marketplace and competitive with our rates.

I’m not convinced that it’s incentives that will drive additional business, he said. I think there’s limited business in the marketplace.

Some companies started bracing for leaner times early. Oakwood Worldwide, a Los Angeles-based company described on its Web site as the largest temporary housing provider in the world, has cut leases to almost 100 apartments during the last year in Massachusetts, Rhode Island and New Hampshire.

Debbie Lundon, senior district manager for Oakwood Worldwide, explained that those cuts were strategically planned, because the company anticipated that business would be slower for some clients that had relied on corporate housing in the past.

With offices in Boston and Waltham, Oakwood has about 200 units in Boston and another 150 along Route 128 North and the MetroWest. It also has 35 units in Southern New Hampshire and Rhode Island.

Currently, Oakwood has only three vacancies in Boston and about 12 in the suburbs.

The suburban market is slower, according to Lundon, mainly because business there is tied into the high-tech industry that has been suffering since late last year.

Also, corporate housing has to compete with suite hotels that are much more common today in the suburban communities. Those hotels have been slashing daily room rates, sometimes in half, since the Sept. 11 terrorist attacks have made many apprehensive about traveling.

People are definitely looking at price and looking for deals, said Lundon.

Oakwood is willing to work with clients who are on a budget, she said, and in the past, has upgraded clients from one-bedroom to two-bedroom apartments if there were vacancies.

Smaller companies have also been hurting. Hemenway Corporate Housing in Milton, an 8-year-old company that in the 1990s handled about 60 apartment rentals at a time in Greater Boston, is now down to about 10 rentals.

Corporate travel has been cut back dramatically, said Margy Pepe, one of four employees at Hemenway.

Not only are we feeling the pinch, but our vendors are as well, said Pepe, referring to the furniture and appliance rental companies that Hemenway uses.

Equity Corporate Housing, which entered the Boston market a little more than a year ago, is pulling back some of its rentals north of the city. Equity has up to 85 apartments for extended stays in the area.

The company is not likely to renew leases at about 20 percent of its units in the Greater Boston area this winter, according to Gary Bacon, Northeast regional vice president for Equity Corporate Housing.

‘Necessary Promotions’
Bacon said business has been hit hard north of Boston, another area that is tied into the faltering high-tech industry. But Bacon said the slowdown also may be attributed to the upcoming holiday season – a time when many people do not want to relocate – and because people are hesitant to travel to faraway locations.

Starting in November, the company may start offering $500 off a month’s rent in the Boston area. Bacon said, We’re doing the necessary promotions to keep units filled.

Two sectors that will continue to be a good source of business for corporate housing providers in Boston are hospitals and colleges and universities.

Bacon said Equity still rents many downtown units to nurses employed by traveling nursing companies, doctors relocating to the area and patients.

Companies trying to increase business are advertising on Web sites, like www.corporatehousing.com.

Officials of the Web site, a division of www.forrent.com and Trader Publishing Corp., report that viewings and advertising have risen steadily. For one week following the attacks, visits to the site were down, but since then business has been increasing, according to Nancy Hackney, sales manager of corporatehousing.com.

Hackney said companies are realizing that the site offers a cost-effective, efficient and attractive way to fill vacant units.

The site, relaunched in June, is averaging about 41,000 page views per week with about 7,000 unique visitors per week, said Hackney.