the MID­DLE ground

Apartho­tels are see­ing sig­nif­i­cant growth as a “step­ping stone” be­tween ho­tels and ser­viced apart­ments, writes Rob Gill

The Business Travel Magazine - - Hotels -

With the pro­lif­er­a­tion of dif­fer­ent ho­tel and ser­viced apart­ment brands, it was only a mat­ter of time be­fore a hy­brid of the two – the apartho­tel – re­ally started to take off in the busi­ness travel arena.

As the name sug­gests, the apartho­tel lies some­where be­tween a tra­di­tional ho­tel and ser­viced apart­ment, both in terms of the type of ac­com­mo­da­tion and the ser­vices and fa­cil­i­ties be­ing of­fered.

The con­cept is not par­tic­u­larly new – the first Res­i­dence Inn, pro­moted as an “ex­tended stay ho­tel” and now part of Mar­riott, opened more than 40 years ago – while fel­low ho­tel gi­ant Ac­cor owns the Ada­gio Apartho­tel brand.

On the other side of the equa­tion, ser­viced apart­ment providers are join­ing the fray with their own apartho­tel brands, such as SACO’S Locke and Stayc­ity Group’s Wilde prop­er­ties fo­cus­ing on a more “de­sign-led” ethos.

But what can buy­ers and their trav­ellers ex­pect to get from these apartho­tel brands and, per­haps more im­por­tantly, where do they sit in terms of prices com­pared with ho­tels and ser­viced apart­ments?

The As­so­ci­a­tion of Ser­viced Apart­ment Providers (ASAP) says that apartho­tels of­fer “con­tained apart­ments within a ded­i­cated build­ing with the added con­ve­nience of of­fer­ing ho­tel-type ser­vices to guests”.

“An apartho­tel is the per­fect com­bi­na­tion of both,” ex­plains Eric Ja­fari, Locke’s Cre­ative Di­rec­tor. “Guests can en­joy the homely com­forts of an apart­ment such as a liv­ing space and func­tional kitchen while still hav­ing ho­tel ameni­ties.”

Ser­vices typ­i­cally in­clude a 24/7 re­cep­tion, house­keep­ing, com­mu­nal or so­cial spa­ces, and of­ten fa­cil­i­ties such as a gym and break­fast bar. Apartho­tels gen­er­ally of­fer stu­dios or one-bed­room apart­ments with a kitchen or kitch­enette, whereas a ser­viced apart­ment com­plex of­ten fea­tures larger units with up to four bed­rooms. So what’s driv­ing the surge in apartho­tels? Part of the rea­son is con­sumer de­mand, par­tic­u­larly with all the pub­lic­ity gen­er­ated by shar­ing econ­omy groups such as Airbnb. Caro­line Saun­ders, Group Head of Mar­ket­ing at Sil­ver­door Apart­ments, says: “For years, peo­ple didn’t re­ally know what a ser­viced apart­ment was. Now, with com­pa­nies like Airbnb and One­fines­tay prov­ing so pop­u­lar, peo­ple are more aware they can book a whole apart­ment. An apartho­tel is a nice step­ping stone for

peo­ple who would tra­di­tion­ally book a ho­tel as it of­fers all the ser­vices typ­i­cal of a ho­tel but with the ben­e­fits of an apart­ment.”

Anja Muller, Di­rec­tor of Eu­ro­pean Op­er­a­tions for Ada­gio, agrees the shar­ing econ­omy is help­ing to drive a change in “life­style and travel be­hav­iour”.

But apartho­tels are also prov­ing at­trac­tive to prop­erty in­vestors be­cause they are more prof­itable than ho­tels and can eas­ily be con­verted into pri­vate homes or for other uses, if nec­es­sary.

The in­creas­ing trend of “bleisure travel” – com­bin­ing busi­ness trips with leisure time – could also be help­ing to push the apartho­tel rev­o­lu­tion, par­tic­u­larly with mil­len­ni­als.

“Apartho­tels are per­fectly placed to help busi­ness trav­ellers make the most of their time away from home and ex­plore the city they’re visit­ing,” says John Wag­ner, Co-founder of Cy­cas Hos­pi­tal­ity.

“Younger ex­ec­u­tives will ex­pect the same con­ve­niences that they’ve come to en­joy on their hol­i­days and the de­mand for these styles of al­ter­na­tive ac­com­mo­da­tion will con­tinue to in­crease,” he adds.

Is the price right?

As with all types of ac­com­mo­da­tion, prices for apartho­tels are af­fected by the usual com­mer­cial forces such as de­mand, avail­abil­ity, time of travel, length of stay and lo­ca­tion. Apartho­tels gen­er­ally of­fer more spa­cious ac­com­mo­da­tion than ho­tels, but they also have the po­ten­tial to save money on longer stays.

Tom Meertens, Oak­wood World­wide’s Man­ag­ing Di­rec­tor for EMEA, says: “Apartho­tels tend to of­fer up to 30% more space while be­ing more cost ef­fec­tive. On av­er­age they are 15% to 30% cheaper than a full-ser­vice qual­ity ho­tel.”

Ada­gio, for ex­am­ple, of­fers a “de­gres­sive” pric­ing model – as of­fered by most ser­viced apart­ment op­er­a­tors – with the rate fall­ing from the fourth night on­wards and drop­ping as much as 40% for a stay of sev­eral months.

James Foice, CEO of ASAP, adds: “As with tra­di­tional ser­viced apart­ments, it will cost less the longer you stay as you pay per apart­ment not per per­son, while VAT also re­duces to just 4% af­ter 28 nights.

“A key way to save money is by hav­ing the use of your own kitchen so you don’t have to dine out each night and can have break­fast, a drink or snack in the apart­ment.”

Sarah Gaze, Di­rec­tor of Busi­ness De­vel­op­ment at Na­tive (for­merly Go Na­tive), agrees food and bev­er­age costs can “re­duce dra­mat­i­cally” by us­ing apartho­tels.

“And av­er­age daily rates will come down for longer stays, which are not typ­i­cally of­fered as a stan­dard by ho­tels,” she adds. “Larger cost sav­ings for cor­po­rates can also be achieved if guests are shar­ing, say, a two bed, two bath­room apart­ment.”

Fur­ther growth ahead

With all these fac­tors in play, we should ex­pect to see a sig­nif­i­cant in­crease in the num­ber of new apartho­tels ap­pear­ing in the next few years in the UK and fur­ther afield.

SACO is due to open its third Locke­branded apartho­tel in Manch­ester later this year, in ad­di­tion to its ex­ist­ing Locke prop­er­ties in Lon­don and Ed­in­burgh.

In ad­di­tion, the first of Stayc­ity’s Wilde Apartho­tels opened on Lon­don’s Strand in March, and will be fol­lowed by prop­er­ties in Ed­in­burgh and Manch­ester in 2019 and 2020 re­spec­tively.

Stayc­ity Group’s CEO Tom Walsh says the first Wilde prop­erty in Lon­don has re­ceived “ex­tremely pos­i­tive” cus­tomer feed­back and was “very com­pet­i­tively priced for such a cen­tral lo­ca­tion where four or five-star ho­tel ac­com­mo­da­tion is the norm”.

Na­tive is also due to open three apartho­tels in the UK this year: in Lon­don’s Bank­side dis­trict and Glas­gow this sum­mer, fol­lowed by Manch­ester later this year.

Apartho­tels are not just a UK phe­nom­e­non, with Stayc­ity plan­ning to open two Wilde prop­er­ties in Berlin over the next cou­ple of years, while SACO’S Locke has se­cured fur­ther sites in Berlin, Dublin and Paris.

Wilde by Stayc­ity

Locke by SACO

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