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