OP­ER­AT­ING MOD­ELS

Ser­viced apart­ment com­pa­nies come in a va­ri­ety of forms, but all are work­ing to make book­ing easy

The 2018 Guide to Serviced Apartments - - CONTENTS -

Dif­fer­ent own­er­ship, one goal

Op­er­at­ing mod­els in the ser­viced apart­ments sec­tor have long been a bone of con­tention, although an un­der­stand­ing of op­er­a­tors, agen­cies and hy­brids grows as more com­pa­nies add apart­ments to their cor­po­rate ac­com­mo­da­tion pro­grammes.

Op­er­a­tors own and sell their bricks and mor­tar and are in­creas­ingly rare birds, as they spread their wings and sell in­ven­tory in ar­eas where they can’t or don’t own prop­erty.

An ex­am­ple of this is Che­val Res­i­dences, which owns its UK port­fo­lio but was forced to set up a part­ner­ship with Qatar In­dus­try Man­u­fac­tur­ing Cor­po­ra­tion to open in Doha since for­eign own­er­ship is not per­mit­ted. Che­val will man­age the re­sult­ing 350key, four-star apartho­tel un­der con­tract.

“We would also con­sider act­ing as an op­er­a­tor for prop­er­ties that re­flect our brand stan­dards to look af­ter cus­tomers in ar­eas where we are not rep­re­sented,” says di­rec­tor Ge­orge West­well. This would fall into the hy­brid model, where owner/op­er­a­tors are also act­ing as agents for other com­pa­nies’ stock. But hon­esty is not al­ways seen as the best pol­icy. “If sup­pli­ers do not have in­ven­tory in a des­ti­na­tion but say they will look af­ter you any­way, most of them do not tell buy­ers it is not their in­ven­tory,” says global ac­com­mo­da­tion man­ager for AIG, Jan Ja­cob­sen. “In the ho­tel world that would never hap­pen. Un­for­tu­nately – pos­si­bly due to lack of time – buy­ers have al­lowed it. They should ask more ques­tions.

“An apart­ment man­age­ment model, as we have, is bet­ter con­trolled: the ser­vice providers and the qual­ity of ser­vice you re­ceive meet the stan­dards you ex­pect, and the com­mer­cial re­la­tion­ship en­sures the cost of the trans­ac­tions falls within agreed pa­ram­e­ters.”

TAS man­ages AIG’s apart­ment pro­gramme, mir­ror­ing what AIG has in the ho­tel world with a TMC, and built a book­ing por­tal for the com­pany, pre­clud­ing the need to go through ex­pen­sive in­ter­me­di­aries.

TAS Al­liance fills gaps in TAS’s port­fo­lio, of which Ja­cob­sen says: “I don’t use TAS Al­liance as my pri­mary source but that is some­thing I think is miss­ing in the ser­viced apart­ments world be­cause sup­pli­ers pro­tect their in­ven­tory.”

Spread­ing the word

In Fe­bru­ary this year, BridgeStreet launched its much vaunted OTA, aimed at the cor­po­rate mar­ket. This pulls to­gether more than 90,000 prop­er­ties world­wide and makes them avail­able to cor­po­rate buy­ers via GDS, us­ing cus­tomised por­tals that en­sure trav­ellers stick to com­pany pol­icy.

SACO is in­ves­ti­gat­ing mi­crosites to drive di­rect business. “We have done that with Le­man Locke and more than dou­bled book­ings from it,” says Stephen Han­ton. The Wit­ten­berg fol­lows.

Next on the agenda are plat­forms that talk to non-Euro­pean mar­kets such as China’s CTrip. “We want to build

tech­nol­ogy that un­der­stands the cus­tomer bet­ter,” says Han­ton.

Go Na­tive has pro­pri­etary tech­nol­ogy and does not of­fer long-term book­ings on­line. “Cor­po­rates are in­ter­ested in hav­ing us in­te­grated into the tools they al­ready have,” says di­rec­tor of sales and dis­tri­bu­tion, Paula Cullen. It is look­ing at changes that al­low cor­po­rate clients to be iden­ti­fied on its web­site and is test­ing a chat fa­cil­ity.

GDS has worked well for Go Na­tive, whose book­ings have grown by more than 50%, if from a low base; and from here, the com­pany plans to work with the GTMC and TMCs, “to en­sure their staff are com­fort­able with our prod­uct so that it is of­fered along­side tra­di­tional ac­com­mo­da­tion,” she says.

Ada­gio pig­gy­backs on ho­tel tech from Ac­cor. “But we are not see­ing a lot of PMS sys­tems or client in­ter­faces that are par­tic­u­larly well adapted to ex­tended stay,” says Karim Malak.

Co­tels uses on­line and off­line tools, in­clud­ing OTAs, re­la­tion­ships via a sales di­rec­tor and, “We keep in reg­u­lar con­tact with agents such as Sil­verDoor and The Apart­ment Net­work,” says man­ag­ing di­rec­tor Mar­cia Gómez.

Su­percity Aparthotels is re­vamp­ing its web­site, with up­dates to in­clude more con­tent and in­creased max­i­mum length of stay book­able from 30 to 89 nights. The new site will be launched with a re­brand in 2018. Mean­while, Su­percity’s cen­tral reser­va­tions de­part­ment went live in Septem­ber. “We are mov­ing book­ings away from the sites so that re­cep­tion teams can con­cen­trate on per­son­al­is­ing the stay for the guest,” says man­ag­ing di­rec­tor Dean Madge.

Easy sell

“Many op­er­a­tors have lim­ited stock which is man­aged too in­tri­cately to be dis­trib­uted on­line. It needs to be man­aged man­u­ally to al­low the flex­i­bil­ity to take long-term, qual­ity book­ings, as op­posed to a high vol­ume of short-term book­ings which you’re more likely to re­ceive on­line,” says head ac­count man­ager for Sil­verDoor Apart­ments, Martin Klima. “When you only have a few units, you don’t have the lux­ury of block­ing off avail­abil­ity to help jug­gle an off­line and on­line GDS-based ap­proach.”

Sil­verDoor is about to re­launch Or­bital Part­ner­ship. “It will be a game changer,” says se­nior part­ner ac­count man­ager, Kurtis Mur­phy. “It will al­low some op­er­a­tors to re­fer business they can­not ac­com­mo­date to other mem­bers of the part­ner­ship, while re­tain­ing their re­la­tion­ship with the client.”

SITU, mean­while, has in­tro­duced locked-in, long-lead prices on over­seas apart­ments, en­abling clients to bud­get more con­fi­dently.

Phil Stapleton, SITU Man­ag­ing Di­rec­tor, says: “A typ­i­cal trans­ac­tion for us could in­volve a cus­tomer in New York de­cid­ing in June that they want to book an apart­ment in Paris in Septem­ber. We will quote a price in June, but that could be sub­ject to fluc­tu­a­tions in the ex­change rate in the in­terim pe­riod.

“While we’d al­ways look to ab­sorb this cost, there comes a point where it has to be passed on. By work­ing with Fron­tier­pay to lock in the ex­change rate in ad­vance, that risk is re­moved. This means cus­tomers are guar­an­teed the price they are quoted.”

Book­ing tech­nol­ogy in the sec­tor has long been a prob­lem for buy­ers.

Thank­fully, sup­pli­ers are get­ting closer to pro­vid­ing all the in­for­ma­tion buy­ers re­quire in one place, along with the tech­nol­ogy that al­lows them to book on­line, ei­ther on pro­pri­etary web­sites or through clients’ book­ing tools.

"SITU has in­tro­duced locked-in, long-lead prices on over­seas apart­ments, en­abling clients to bud­get more con­fi­dently"

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