Ser­viced apart­ment de­vel­op­ers are tak­ing a part­ner­ship ap­proach to in­no­va­tion and new open­ings

The 2018 Guide to Serviced Apartments - - CONTENTS -

Forg­ing part­ner­ships and in­no­va­tion

"The de­mand is there. Peo­ple love to try some­thing new and the big com­pa­nies are try­ing to de­velop brands to meet that need"

The ser­viced apart­ment mar­ket is still small com­pared to the global sup­ply of ac­com­mo­da­tion, but as sup­pli­ers take on new in­ven­tory in cities as dis­tant as Sao Paulo and Southamp­ton, it is ap­par­ent that the model works any­where.

To fa­cil­i­tate this growth, new business types are com­ing into play. Che­val Res­i­dences has tra­di­tion­ally owned its apart­ment build­ings in Lon­don but has a man­age­ment con­tract on its forth­com­ing Qatar prop­erty and is look­ing at oth­ers.

BridgeStreet has a man­age­ment con­tract on the forth­com­ing Stow-Away near Lon­don’s Water­loo and, “We are look­ing at fran­chised and man­aged op­er­a­tion mod­els to help de­velop our brands; fi­nan­cially it makes sense,” says man­ag­ing di­rec­tor EMEA and APAC, Steve Burns.

As­cott is also con­sid­er­ing this route: “In Europe we are pre­dom­i­nantly an owner-op­er­a­tor be­cause real es­tate value is sta­ble but we have just started a fran­chise agree­ment in France and are look­ing at agree­ments in Brazil. In the Gulf, where as a for­eign com­pany we can­not own prop­erty, we will have more man­age­ment con­tracts, and the same in Asia,” says area man­ager, Marc Sand­fort.

This flex­i­bil­ity will help sup­pli­ers set up eas­ily to fill gaps in lo­ca­tions, no­tably in Liver­pool, Leeds, York, Brighton, Bournemouth and Ox­ford. Sup­ply is also lack­ing in Lon­don, some­thing Ur­ban Stay hopes to help ad­dress with a planned ex­pan­sion from 62 to 100 apart­ments by the end of 2018.

And in­creas­ing em­pha­sis on cus­tomer ex­pe­ri­ence means there will be in­vest­ment in any­thing that fa­cil­i­tates that – cre­ativ­ity, tech­nol­ogy and staff in par­tic­u­lar, with con­tin­ued em­pha­sis on safety and se­cu­rity.

“De­vel­op­ers and de­sign­ers are com­ing up with an ever more di­verse se­lec­tion of ac­com­mo­da­tion types to pro­vide a

fu­sion be­tween home, ho­tel, apart­ment, ware­house, re­treat and loft styles,” says head of cor­po­rate sales & re­la­tion­ships EMEA and APAC for Q Sky­line, Lorna Keen. “The de­mand is there. Peo­ple love to try some­thing new and the big com­pa­nies are try­ing to de­velop brands to meet that need.”

Shared am­bi­tion

Oak­wood pre­dicts a growth in al­liances and part­ner­ships be­tween sup­pli­ers in re­sponse to economies of scale and an in­crease in busi­nesses send­ing em­ploy­ees on in­ter­na­tional as­sign­ments.

“As mil­len­ni­als en­ter and lead the work­force, re­search shows that more ex­pect an over­seas place­ment at some point dur­ing their ca­reer,” says Tom Meertens, re­fer­ring to the PwC Global Mo­bil­ity Re­port 2020. And de­mand will con­tinue to grow: “In EMEA dur­ing 2016, we saw a 19% in­crease in move-ins com­pared to the pre­vi­ous year and we ex­pect this trend to con­tinue,” he says.

Dual-branded prop­er­ties will also pro­lif­er­ate. “For the in­vestor/hote­lier, one of the main at­trac­tions is the po­ten­tial to utilise land more ef­fi­ciently,” says Cy­cas’s John Wag­ner. “Where it may not be vi­able to have one 400room ho­tel, two 200-room ho­tels of dif­fer­ent brands and vary­ing in price is much more fea­si­ble in terms of fill­ing rooms. And the guest ben­e­fits from a choice of two brands and a range of shared ameni­ties that are of­ten of a higher stan­dard due to the cost­ef­fec­tive na­ture of be­ing able to share.”

If growth in in­ven­tory is matched by growth in de­mand, the sec­tor will be hard pressed to stay ahead of the game. In­ter­est­ing times.

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