Of age

The Business Travel Magazine - - Serviced Apartments -

Sup­plier con­sol­i­da­tion, new tech­nol­ogy and in­creas­ingly di­verse prod­ucts are the hall­marks of a ma­tur­ing in­dus­try, says Cather­ine Chetwynd

For the bur­geon­ing ser­viced apart­ment sec­tor, high de­mand and low sup­ply made 2017 a good year for op­er­a­tors, while their cor­po­rate guests ab­sorbed ris­ing rates.

“The hos­pi­tal­ity sec­tor over­all is grow­ing in the UK and that af­fects ser­viced apart­ment and ho­tel per­for­mance,” says Di­rec­tor of Busi­ness De­vel­op­ment for data and an­a­lyt­ics com­pany STR, Thomas Emanuel. “Op­er­a­tors were able to con­tinue to push av­er­age rates, lead­ing to REVPAR in­creases; and for the most part, the coun­try seems to be ab­sorb­ing new sup­ply,”

There were some 50 new prop­er­ties across the UK last year, bring­ing 1,000 ex­tra keys across the ser­viced apart­ment in­dus­try and oc­cu­pan­cies are av­er­ag­ing 81.7%. This is not the norm for most cities and in Lon­don, Ed­in­burgh and Manch­ester this is de­spite growth in sup­ply. Ser­viced apart­ments have yet to make their mark in se­condary or ter­tiary towns and cities but ho­tels in those lo­ca­tions are trad­ing at over 75% oc­cu­pancy, so ser­viced apart­ments will fol­low.

Sup­pli­ers are re­spond­ing to this: “We have seen an uptick in in­ter­est from cor­po­rate clients and we are adding more ser­viced apart­ment in­ven­tory at our deep­est cor­po­rate rates,” says Man­ag­ing Di­rec­tor for HRS UK & Ire­land, Douglas Green.

“The de­mand from busi­ness trav­ellers for more flex­i­bil­ity and choice has been a ma­jor boost for play­ers like Airbnb and ser­viced apart­ments,” says Se­nior An­a­lyst for Euromon­i­tor, Miles Ag­ban­rin. “Airbnb is now the largest player to make a dis­tinct move into busi­ness travel and own ser­viced apart­ment prop­er­ties.”

Many busi­ness trav­ellers are keen to have Airbnb prop­er­ties in their pro­gramme and IMG is re­spond­ing to that: “We are talk­ing to Airbnb be­cause trav­ellers want to book this sort of ac­com­mo­da­tion but it is against pol­icy cur­rently as our risk peo­ple don’t like the thought of our peo­ple stay­ing in homes that don’t have strict safety checks in place,” says Global Travel Man­ager, Hero Trew.

PWC brooks no ar­gu­ment: “We do not pro­mote Airbnb through PWC,” said Sam van Leeuwen, Head of Ho­tels and Venues, at the ASAP con­fer­ence. “Our global se­cu­rity teams see it as an un­mit­i­gated risk and that mes­sage has gone out glob­ally.”

Mean­while, ASAP, the As­so­ci­a­tion of Ser­viced Apart­ment Providers, con­tin­ues to em­pha­sise and pro­mote mem­bers’ point of dif­fer­ence, with a move to be­ing an 100% ac­cred­ited-only or­gan­i­sa­tion.

“Our key fo­cus for this year is get­ting cor­po­rate buy-in for duty of care and qual­ity ac­cred­i­ta­tion,” says Mar­ket­ing Man­ager Joyce Cawthorpe. “We are in dis­cus­sion with Re­view­pro, which ag­gre­gates cus­tomer re­views, and that will give us real-time feed­back about how ev­ery­one is per­form­ing – it re­ally en­hances the qual­ity ac­cred­i­ta­tion pro­gramme,” she adds.

Mar­ket con­sol­i­da­tion SACO’S re­cent ac­qui­si­tion by Brook­field is the lat­est in a raft of move­ments in the sec­tor. Last year alone, Hua Kee in­vested in Cy­cas, Choice Ho­tels pur­chased Wood­spring Suites, The As­cott raised its stake in Quest Apart­ment Ho­tels to 80%, Q Apart­ments bought Sky­line In­ter­na­tional and Maple­tree bought Oak­wood World­wide.

“We are at the very begin­ning of the growth of the sec­tor – there is def­i­nitely po­ten­tial for fur­ther ac­qui­si­tions,” says Man­ag­ing Di­rec­tor of Hos­pi­tal­ity for JLL, Max Thorne. “Those busi­nesses that have in­vested in prop­erty and in tech­nol­ogy to en­hance their op­er­a­tion will be of par­tic­u­lar in­ter­est. I see 2018/19 be­ing an op­por­tu­nity, largely in the Brexit tur­moil, for cap­i­tal in­vest­ments to take ad­van­tage of for­eign ex­change rates and con­sol­i­da­tion.”

Tom Meertens, Man­ag­ing Di­rec­tor of EMEA for Oak­wood World­wide, says: “Our ac­qui­si­tion by Maple­tree In­vest­ments has helped ac­cel­er­ate the growth of our port­fo­lio and we have more than 20 Oak­wood branded prop­er­ties in the global pipe­line.”

Chair­man of Quest, Paul Con­stanti­nou, adds: “This type of in­vest­ment is good for the in­dus­try as it will see the mar­ket share of ser­viced apart­ments grow. They still com­prise only 5% of the ac­com­mo­da­tion mar­ket in the UK, whereas in Aus­tralia, for ex­am­ple, apart­ments make up 25%.”

And re­gard­ing As­cott’s in­vest­ment:  “Quest is now able to com­pete on a global scale. We are able to es­tab­lish stronger re­la­tion­ships with cor­po­rate clients lo­cated in key geo­graphic hubs where As­cott’s brands op­er­ate such as Sin­ga­pore, In­dia, China, UK and Europe, which is hav­ing a flow-on ef­fect to our prop­er­ties in Aus­trala­sia,” he says.

The book­ing bug Tech­nol­ogy con­tin­ues to be a con­tentious sub­ject in the ser­viced apart­ment sec­tor and de­spite in­creas­ing claims of live avail­abil­ity, as soon as a cus­tomer wants to ex­tend a book­ing, they need hu­man in­ter­ven­tion.

Habi­cus’ on­line book­ing tool Orbi has been in de­vel­op­ment for a year. It al­lows buy­ers to log in, book, man­age the reser­va­tion, see MI and pull off re­ports.

“We have cus­tomised the book­ing of ser­viced apart­ments for travel man­agers and guests, and travel man­agers can set ap­proved prop­er­ties so that they are high­lighted when users search for an apart­ment. The sys­tem shows live avail­abil­ity and we bring on­line and off­line, booked through ac­count man­agers, to­gether, re­duc­ing frag­men­ta­tion,” says Caro­line Saun­ders, Group Head of Mar­ket­ing for Sil­ver­door. The com­pany bought Ci­ty­base in 2016 and the two now op­er­ate to­gether un­der par­ent brand the Habi­cus Group. If a guest needs to ex­tend their stay, they are trans­ferred to their ac­count man­ager.

Bridgestreet’s tech­nol­ogy op­er­ates in a sim­i­lar way. There are more than 140,000 prop­er­ties on the site, with an­other 200,000 to load this year, and some of this is avail­able in real time, ac­cord­ing to whether the sup­plier has re­leased it. In ad­di­tion, “If some­one is ex­tend­ing a book­ing, they can re-book on line, via the call cen­tre or go through to the ac­count man­ager – there is al­ways the choice be­tween self-ser­vice and some­one to help,” says CEO Sean Worker.

Prompted by the dif­fi­culty of putting to­gether guest in­for­ma­tion at ser­viced apart­ment op­er­a­tor Lat­eral City, Julie Grieve founded Cri­ton Apps. It al­lows op­er­a­tors to turn guest in­for­ma­tion into an app and up­date it as re­quired. “Guests use the app to in­ter­act with guest tech­nol­ogy such as on­line check-in, con­trol­ling air con­di­tion­ing and or­der­ing room ser­vice,” says Grieve. PMS in­te­gra­tion fol­lows.

Cri­ton is build­ing an app to con­tain those for each of Mans­ley Ser­viced Apart­ments’ six lo­ca­tions. Guests can choose what is rel­e­vant to them and, “It will also al­low the op­er­a­tor to up­sell their lo­ca­tions,” says Julie Grieve. Mans­ley in­tro­duced apps to digi­tise book­ings and posted on it videos of staff demon­strat­ing how to use wash­ing ma­chines or change the heat­ing, for ex­am­ple, which is pop­u­lar with guests.

Pres­tige Apart­ments uses on­line book­ing plat­form Elina, which is de­signed for ser­viced apart­ments, hol­i­day ren­tals and lodges. “It shows live avail­abil­ity and you can add clean­ing, air­port trans­fers etc,” says Man­ag­ing Di­rec­tor Alex Wood. “We had to have con­sec­u­tive avail­abil­ity, so that the sys­tem did not split a book­ing be­tween apart­ments to fill avail­able space.”

And SITU, with a global net­work of 36,000 apart­ments, in­tro­duces book­ing with live avail­abil­ity this year; prop­er­ties of­fer­ing this will be iden­ti­fied with a light­ning bolt sym­bol. TMC Clar­ity has ap­pointed SITU as its pre­ferred apart­ment provider world­wide.

SACO’S mis­sion is to be­come a ma­jor op­er­a­tor of apartho­tels in Europe and use tech­nol­ogy to do it, ac­cord­ing to CEO Stephen Han­ton. This is partly driven by Brexit, which threat­ens a huge short­age of un­skilled labour. Ro­bot clean­ers are tak­ing over cor­ri­dors in SACO’S Am­s­ter­dam and

Bris­tol prop­er­ties and, in a trial at The  Can­non in Lon­don, guests have been us­ing a mo­bile app to check in on­line, ac­cess the build­ing and open apart­ment doors. Large num­bers of guests also used it to com­mu­ni­cate with staff.

SACO plans to de­ploy that and other tech­nol­ogy in its Manch­ester Locke apartho­tel, which opens with 160 rooms, four restau­rants and two bars. “We will have check-in kiosks where guests can ac­cess their reser­va­tion and cut their door key,” says SACO’S di­rec­tor of IT Dan Dick­in­son.

“We will also of­fer re­cep­tion but the au­to­mated el­e­ment will help re­duce the num­ber of peo­ple at the front desk, which is es­pe­cially use­ful at prop­er­ties where the num­ber of rooms and F&B out­lets means a lot of ac­tiv­ity in the re­cep­tion area.”

The com­pany will add al­most 1,000 units be­tween 2018 and 2020 and fur­ther aims to more than dou­ble its foot­print un­der its new own­er­ship with an ex­pan­sion pro­gramme tar­get­ing 12 ma­jor cities across Europe in­clud­ing Ber­lin, Dublin and Paris.

Stay­bridge Suites Am­s­ter­dam will have mo­bile check-in and As­cott has tri­alled this in France. It is also ex­per­i­ment­ing with mo­bile mes­sag­ing, al­low­ing guests to use What­sapp or Wechat to make reser­va­tions di­rect, for ex­am­ple. Chat­bot tri­als fol­low. Mo­bile check-in and room key are also avail­able at Lam­ing­ton Apart­ments’ Room2 prop­erty in Southamp­ton, where a self­check-in counter is an­other op­tion.

The spice of life The evo­lu­tion of the sec­tor con­tin­ues apace. Apartho­tel Ada­gio Ac­cess has ex­per­i­mented with mi­cro apart­ments – smaller rooms and a com­mu­nal kitchen – in Frank­furt and plans more. This year, Lyf en­ters the fray with two open­ings in China, and now Yo­tel is also a con­tender.

fa­cil­i­ties of­fered by a full ser­vice ho­tel  such as restau­rants and meet­ing rooms,” says Cy­cas Di­rec­tor John Wag­ner.

Ada­gio Birm­ing­ham re­flects the brand’s lat­est think­ing, with a com­mu­nal work­ing space and an Ob­ject Li­brary, al­low­ing guests to bor­row items such as a gui­tar, rice cooker or mo­bile charger.

Mean­while, with the im­mi­nent launch of three apartho­tels this year, Go Na­tive has emerged re­s­plen­dent un­der new brand Na­tive. Em­pire Ware­house opens this spring on Lon­don’s South Bank with 24-hour check-in, free Wifi, com­mu­nal work space and free pantry. The An­chor Line in Glas­gow opens in the sum­mer and Lon­don Ware­house in Manch­ester fol­lows.

Lam­ing­ton opens its first Room2 apartho­tel (com­pris­ing 78 units) in Southamp­ton in March. “We have been in­spired by Hox­ton and Ci­ti­zenm and the de­sign has ref­er­ences to cruise ships,” says Di­rec­tor Robert God­win, who is cur­rently in dis­cus­sions about a build­ing in Glas­gow.

Never short of dy­namism and cre­ativ­ity, the mar­ket is host­ing a new­comer in the form of MY Ser­viced Apart­ment Con­sul­tancy, which han­dles all as­pects of con­struct­ing a ser­vice apart­ment pro­gramme for those want­ing to take ad­van­tage of di­rect sourc­ing and pric­ing, with po­ten­tial for con­sid­er­able sav­ings over book­ing via a third party.

All prop­er­ties are as­sessed to en­sure duty of care, safety, qual­ity and com­fort, and client por­tals al­low buy­ers to book and cor­re­spond di­rectly with op­er­a­tors in their pro­gramme. “We be­lieve that op­er­a­tors are more ac­count­able if they own the re­la­tion­ship with the cor­po­rate, paving the way for greater client ser­vice,” says the con­sul­tancy's founder, Gary Hurst. The ini­tia­tive is one more sign of the ser­viced apart­ment sec­tor's mat­u­ra­tion.

A new-look prop­erty from top to bottom, Apartho­tel Ada­gio Ed­in­burgh Royal Mile is the first apartho­tel to fea­ture new apart­ment de­signs with lighter, brighter and al­to­gether more dy­namic liv­ing spaces. The pub­lic space is a wel­com­ing, com­fort­able and stylish liv­ing area where guests can meet, share and col­lab­o­rate. The de­sign is in­spired by the ar­chi­tec­ture and na­ture of the Ed­in­burgh land­scape. Lo­cated on the world-fa­mous Royal Mile, min­utes from Ed­in­burgh Waver­ley sta­tion, the apartho­tel is per­fectly lo­cated for busi­ness and leisure in Ed­in­burgh. ada­

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