Ex­tend­ing a Wel­come

Long-term guests want a place more like home

Business Traveler (USA) - - FRONT PAGE - By Keith Lo Lo­ria

In the af­ter­mat aftermath of the Great Down­turn of 2009, the life of the long-term cor­po­rate gyps gypsy has re­bounded – but has taken on a dif­fer­ent cast. What has changed in the post-re­ces­sion en­vi­ron­ment, exp ex­perts say, is an in­creased use of con­sul­tants for longer-term cor­po­rate projects projects; a re­turn to re­lo­cat­ing key, usu­ally ex­ecu ex­ec­u­tive-level em­ploy­ees as com­pa­nies ex­pand; and projects or train­ing that re­quires em­ploy­ees to spend weeks or months away from home but with­out ac­tu­ally re­lo­cat­ing to a new city.

Of late, there’s been a sig­nif­i­cant in­crease in the num­ber of ex­tended stay guests, ac­cord­ing to Bill Dun­can, global head, brand man­age­ment at Home2 Suites by Hil­ton and Home­wood Suites

by Hil­ton. Dun­can says ex­tended stay has be­come much more a strate­gic pri­or­ity for com­pa­nies and or­ga­ni­za­tions be­cause so many of cor­po­rate teams and in­di­vid­u­als are on the road for greater pe­ri­ods of time.

“People could be on the road au­dit­ing, for new prod­uct launches or a va­ri­ety of dif­fer­ent ‘trip­ca­tions’ with some very im­por­tant out­comes that are needed,” Dun­can notes.

The tech­nol­ogy and med­i­cal sec­tors in par­tic­u­lar are see­ing sig­nif­i­cant ex­pan­sion of ex­tended-stay cor­po­rate as­sign­ments, notes Robert Radom­ski, vice pres­i­dent, brand man­age­ment, ex­tended stay brands at In­ter­Con­ti­nen­tal Ho­tels Group.

“We are find­ing more com­pa­nies mov­ing away from web-based train­ing they pre­vi­ously hosted based on ef­fi­ciency and cost in fa­vor of in-per­son train­ing events, which re­sult in more cor­po­rate ex­tended stay book­ings, ”he says.

Stay­ing the Same

De­spite the up­turn in the mar­ket and the chang­ing de­mo­graph­ics, many fun­da­men­tals of cor­po­rate apart­ments and the ex­tended-stay ho­tel mar­ket have not changed much post-re­ces­sion. Ac­cord­ing to The High­land Group, a trade con­sul­tancy, 30 days re­mains the typ­i­cal min­i­mum stay re­quired to get the lower costs and greater ameni­ties of a cor­po­rate apart­ment. The aver­age stay in the short­ert­erm ex­tended-stay ho­tels is about two weeks, but many guests choose to check in for a month or more and oth­ers for just a night or two.

The largest seg­ment of the cor­po­rate hous­ing mar­ket continues to be com­pa­nies re­lo­cat­ing em­ploy­ees, fol­lowed by hous­ing in­terns, and con­sult­ing or train­ing as­sign­ments.

The oc­cu­pancy rates in 2012 for US cor­po­rate apart­ments was 88.6 per­cent, a level that tra­di­tion­ally has re­mained rel­a­tively flat, helped in part by build­ing and com­plex own­ers bal­anc­ing their in­ven­tory of units be­tween those avail­able for short- and long-term leases. Up­ward pres­sure on rates and oc­cu­pancy has also come from the lin­ger­ing ef­fects of the hous­ing de­pres­sion, which has filled more apart­ments with renters who used to be home­own­ers or with those not ready to move into home own­er­ship.

In the ex­tended-stay ho­tel mar­ket, oc­cu­pancy in 2012 was just less than 75 per­cent, com­pared with an aver­age for all ho­tels of 61 per­cent, ac­cord­ing to sta­tis­tics from Smith Travel Re­search. Econ­omy-priced ex­tended-stay ho­tels led the field, with a 79 per­cent oc­cu­pancy rate; mid­priced lodg­ings came in 71 per­cent and up­scale ex­tended-stays at 77 per­cent.

Com­pa­nies are look­ing for more op­tions, greater flex­i­bil­ity and in­creased value around busi­ness travel. Thus they are ex­pand­ing their op­tions by look­ing at ex­tended stay al­ter­na­tives, ex­plains David Holt, di­rec­tor of sales for Oak­wood, a global provider of cor­po­rate hous­ing.

“Over the past cou­ple of years we’ve seen more and more com­pa­nies ex­pand­ing out­side the borders of their home coun­try, ”Holt says. “Glob­al­iza­tion is driv­ing a de­mand for ex­tended stays in es­tab­lished and emerg­ing mar­kets. Re­cruit­ing, re­tain­ing, and de­vel­op­ing talent in a truly com­pet­i­tive en­vi­ron­ment means cor­po­ra­tions need an edge – es­pe­cially for global as­signees. We are hear­ing our clients use the phrase ‘over car­ing’ when re­fer­ring to their em­ploy­ees on ex­tended as­sign­ments. This rings true for the Mil­len­nial gen­er­a­tion who ex­pect an over­all stel­lar as­sign­ment ex­pe­ri­ence.”

Oak­wood is one of many cor­po­rate hous­ing providers who have ex­panded their foot­print in the ex­tended stay/ ser­viced apart­ment do­main. Oak­wood’s 2012 pur­chase of Mar­riott’s Ex­e­cuS­tay

cor­po­rate and tem­po­rary hous­ing di­vi­sion gave them fur­nished apart­ments in 700 lo­ca­tions across the US. This in ad­di­tion to its in­ven­tory of hous­ing so­lu­tions around the world.

Ser­viced apart­ments de­signed for longterm tem­po­rary stays is a global mar­ket in which Sin­ga­pore-based Frasers Hos­pi­tal­ity has carved out its own space. Frasers cur­rently has 77 prop­er­ties ei­ther open or in the pipe­line, fall­ing un­der one of five brands across a range of de­sign and ser­vice op­tions: Fraser Suites, Fraser Place, Fraser Res­i­dence, Mo­dena and Capri by Fraser. Frasers is found in far-reach­ing lo­cales from Bei­jing and Kuala Lumpur to Lon­don, Glas­gow and Paris – and of course, in the com­pany’s home­town of Sin­ga­pore.

An­other real es­tate and hous­ing de­vel­oper, Kor­man Com­mu­ni­ties, has three dis­tinct of­fer­ings in the ex­tended stay space; AKA is a brand of high-rise lux­ury fur­nished ser­viced res­i­dences in ur­ban set­tings; these in­clude four New York City prop­er­ties, two in Wash­ing­ton, DC, and one each in Lon­don, Los Angeles and Philadel­phia. Kor­man’s AVE com­mu­ni­ties of­fer fully fur­nished and un­fur­nished, one-, two-, and three-bed­room suites in mid-rise sub­ur­ban set­tings in New Jersey, Penn­syl­va­nia and Vir­ginia. ARK res­i­dences are gar­den style fur­nished and un­fur­nished res­i­dences in sub­ur­ban lo­ca­tions such as Bucks County and Mont­gomery County in Penn­syl­va­nia.

Gimme Shel­ter

The mark that seems to dif­fer­en­ti­ate one ex­tended stay of­fer­ing from an­other is the vari­abil­ity of the word “ex­tended.” While some prop­er­ties bill them­selves as ‘cor­po­rate apart­ments’ or ‘ser­viced apart­ments ,’oth­ers main­tain the ‘ex­tended stay ’moniker. And, in ad­di­tion to dif­fer­ences in the lengths of stay, there are sig­nif­i­cant dis­tinc­tions in ser­vice lev­els, ameni­ties, de­sign and dé­cor and lo­ca­tion.

But all these other fac­tors aside, one com­mon thread among all the dif­fer­ent fla­vors of ex­tended-stay prop­er­ties is the goal to give guests a home away from home to help them keep their rou­tines rolling on the road.

For ex­am­ple, says Chris Walker, Hy­att’s vice pres­i­dent of brands,“this in­cludes ev­ery­thing from res­i­den­tially-in­spired suites with full kitchens, laun­dry fa­cil­i­ties, real so­cial spa­ces, 24-hour work­out rooms, com­pli­men­tary WiFi and more that make it eas­ier to main­tain mo­men­tum and feel at home. ”Walker points to Hy­att House’s Hy­att Has It-Bor­rows pro­gram that of­fers “many for­got­ten items or things guests wouldn’t pack, and it in­cludes items with fam­i­lies in mind such as board games, pool noo­dles and night lights.”

“IHG of­fers two ex­tended stay brands de­signed specif­i­cally for trav­el­ers who spend weeks and months away from home,” says Radom­ski.

The Stay­bridge Suites brand pro­vides a com­mu­nity ex­pe­ri­ence and gives guests an en­vi­ron­ment where they have op­por­tu­ni­ties to so­cial­ize with other guests and ho­tel team mem­bers. Mean­while, the Can­dle­wood Suites brand of­fers a home­like at­mos­phere at a value price.

“Both brands of­fer more space than a typ­i­cal ho­tel room, along with fully equipped in-suite kitchens and ser­vices – in­clud­ing house­keep­ing – and ameni­ties for trav­el­ers, ”Rodom­ski ex­plains. “Un­like many short-term apart­ments, the brands re­quire no min­i­mum stay or lease de­posits for util­i­ties.”

BridgeStreet has taken the con­cept of brand iden­ti­fi­ca­tion a step fur­ther. Cit­ing a need to bring con­sumers a

clearer un­der­stand­ing of the of­fer­ings across the en­tire ex­tended stay sec­tor, the in­ter­na­tional provider of ser­viced apart­ments in Jan­uary re­branded it­self as BridgeStreet Global Hos­pi­tal­ity. The launch in­tro­duces six dis­tinct ser­viced apart­ment brands rang­ing from six- to two-star prod­ucts, all un­der the BridgeStreet sig­na­ture um­brella.

“The needs of the dis­cern­ing trav­eler about ex­pe­ri­ences and qual­ity have evolved in­cred­i­bly over the last cou­ple of years,” ac­cord­ing to Sean Worker, BridgeStreet’s CEO. Re­lo­cated trav­el­ers are look­ing for a “home,” he says .“We are about en­hanc­ing the ex­pe­ri­ence.”

At the other end of the brand­ing spec­trum, Ex­tended Stay Amer­ica has con­sol­i­dated their brand im­age. “We used to have a port­fo­lio of four dif­fer­ent brands, but we con­sciously con­sol­i­dated our brands last year as we re­al­ized from talk­ing with our loyal cus­tomers that some of the things we thought were dif­fer­ent re­ally weren’t that dif­fer­ent,” says Ex­tended Stay’s CMO Tom Seddon.

How­ever, Seddon notes, con­sol­i­dat­ing brands is not any in­di­ca­tion of a slow­down for the ex­tended stay mar­ket. He says half of Ex­tended Stay Amer­ica’s guests stay a month or longer and the growth of the ex­tended stay mar­ket continues each year.

More Than a Bed

Shift­ing cor­po­rate dy­nam­ics are only part of what’s driv­ing the changes in longterm lodg­ing. The guests them­selves – the busi­ness people who wind up liv­ing for weeks or months away from home – are are also cre­at­ing a new cli­mate, and a new set of de­mands for ex­tended stay ho­tel oper­a­tors and cor­po­rate apart­ment providers alike.

In par­tic­u­lar, younger trav­el­ers who are away on longer as­sign­ments are look­ing for a dif­fer­ent ex­pe­ri­ence from their digs. Yon Abad, a di­rec­tor for the Amer­i­cas in Carl­son Wagonlit Travel’s So­lu­tions Group, says these trav­el­ers pre­fer ac­com­mo­da­tions that in­clude com­mon ar­eas like a club­house for so­cial­iz­ing with fel­low lodgers. They also want fit­ness and other recre­ational fa­cil­i­ties on the premises or nearby, prox­im­ity to ur­ban ameni­ties such as good restaurants and re­tail stores, and WiFi and ba­sic ca­ble TV ser­vice in­cluded in the rent.

Ex­tended-stay ho­tels typ­i­cally of­fer those fea­tures, mak­ing sure they’re sit­u­ated where ser­vices are avail­able. Re­cently, cor­po­rate apart­ments have in­cluded the same ameni­ties as a way to at­tract both month-to-month and long-term ten­ants, Abad says.

In New York City, for ex­am­ple, The Wil­liam, a newly-ren­o­vated Mid­town property, has a dif­fer­ent take on the ex­tended stay story. Here guests are im­mersed in the life­style and cul­ture of the city around them. So they of­fer “cul­tural cu­ra­tors” who pro­vide ar­riv­ing guests a wel­come pass­port that points to­ward spe­cific restaurants, cafes, shop­ping, and must-see sights tai­lored to each guest’s per­sonal pref­er­ences, so they can live, work and play“like a lo­cal.”

Housed in two his­toric brown­stones and man­aged by Las Ve­gas-based Warner Hos­pi­tal­ity, The Wil­liam is a fresh, mod­ern, and tech­no­log­i­cally ad­vanced take on the ex­tended stay ho­tel.

“People now pay more at­ten­tion to de­sign,” ac­cord­ing to Hil­ton’s Dun­can. As a re­sult, Hil­ton’s Home­wood Suites prop­er­ties have fo­cused on up­scale home en­vi­ron­ment trends for its ex­tended stay prop­er­ties. These suites in­clude such HGTV-fa­mil­iar ameni­ties as gran­ite coun­ter­tops, stain­less steel ap­pli­ances and hard­wood floors.

In re­sponse to its own re­search which re­veals that people like be­ing around oth­ers when they are on the road, Home­wood has moved into of­fer­ing more com­mu­nal spa­ces with seat­ing in pub­lic ar­eas. In an­other move de­signed to min­i­mize the con­ven­tional con­straints of ho­tel life, Home­wood al­lows guests to pick the suite num­ber they want and is ex­per­i­ment­ing with let­ting them by­pass the front desk al­to­gether and go straight to the room.

Hy­att House of­fers a num­ber of ameni­ties and ser­vices that help guests feel at home and keep their rou­tines nor­mal, in­clud­ing a com­pli­men­tary Morn­ing Spread break­fast, which fea­tures a build-your-own omelet bar, a 24-hour work­out room, guest mar­ket and laun­dry fa­cil­i­ties. Ad­di­tion­ally, there’s a com­pli­men­tary evening so­cial with sa­vory bites, beer and wine.

Ex­tended Stay Amer­ica re­cently be­gan of­fer­ing free break­fast, un­der­stand­ing that some­times you just want to grab a cup of cof­fee and a bagel on the run.

Can­dle­wood Suites fea­tures a Gazebo Grill and a 24-hour Can­dle­wood Cup­board, where guests can pur­chase a va­ri­ety of bev­er­ages, break­fast items, snacks, frozen en­trées and sun­dries on the honor sys­tem.

Three nights a week Stay­bridge of­fers the com­pli­men­tary so­cial

Op­po­site page: Frasers Hos­pi­tal­ity This page: Home­wood Suites, Oak­wood Cor­po­rate Hous­ing

Above: Hy­att House Be­low: BridgeStreet Global Hos­pi­tal­ity

Above: The Wil­liam Op­po­site page: Can­dle­wood Suites, Ex­e­cuS­tay

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