The serviced apartment industry is not only keeping up with the times but is highly optimistic about further growth. Nicole Holgate asks some of the key players to reveal the secret to their success.
A survey just conducted by the Association of Serviced Apartment Providers (ASAP) reveals that among its 56 members, 74 per cent expect their business to increase overall during 2013. Of those, 50 per cent forecast an increase in business of up to 10 per cent, while 19 per cent anticipate it will stay the same.
This optimism seems particularly surprising considering that over the past year the Olympics strongly affected the serviced apartments industry. Typical patterns for bookings weren’t followed, as corporates made a conscious decision to stay away from city centres. Meanwhile, apartment providers had to run deals to attract tourists and ensure rooms stayed filled.
Last October delivered the best occupancy for the final quarter of 2012: 89 per cent for London and 82 per cent in the regions. Bookings are now returning to their regular pattern, but as the industry is relatively new there is constant change and a clear desire for expansion.
Several ASAP members have plans to expand their portfolio of properties into areas such as Greater London, the Thames Valley, Cambridge and Derby. ASAP Chairman David Smith comments: “The majority of our members are expecting a good level of growth for their business in 2013 and are finding new ways to deliver additional value to clients.”
These added-value measures include earlier check-in and later check-out times; discount vouchers for local restaurants, bars or tourist attractions; continental breakfast, gym membership or access to a local gym; free parking; free movies; and complimentary wifi.
There are a number of enticing schemes for regular bookers, such as loyalty programmes or a butler service. This is exemplified by Deep Blue Apartments, which has recently launched a Flying Butler service that includes a choice of grocery deliveries, transfers from any London airport or train station, additional housekeeping and dry cleaning. The attention to detail works because “blocks usually [consist of only] eight apartments, 12 at most,” explains Deep Blue’s MD, Avril Larner, adding that another service they might provide is preparing an itinerary for the visitor’s family.
In fact, providers are increasingly aware of the use that families and non-business travellers can make of serviced apartments. Tom Walsh, CEO of Staycity apartments in Dublin, thinks branching out from the business market is inevitable, although it’s not something that will happen overnight. Families on holiday, regular travellers, those who move around a lot for work and people simply away for the weekend are all potential customers, although he believes the market doesn’t serve them well enough yet.
“Hotel corporations in Europe have only delivered [around] one per cent of room stock in the form of serviced apartments, so many of the above have no choice but to stay in hotel rooms,” he explains. He goes on to add that hotels may in future buy and rebrand existing apartment properties.
According to Walsh, a recent phenomenon is the proliferation of smaller operators. He expects that “as the sector grows in popularity… predictions that the micro-players will lose ground to the larger players will come true. But there should always be space for niche players offering something special and less uniform,” he stresses.
Deep Blue Apartments is a further example of this, acting as an agent for other providers while keeping its original number of properties small, with no intention of expanding into Europe. “A few [other apartment providers] are much the same as us,” adds Larner. “We are containing ourselves.”
One trend that is increasing year on year is the need for technology, remarks Susan Cully, MD of Marlin Apartments. Corporates are aggregating and centralising their bookings and want to do it all online: many of the inclusive perks mentioned above are only available through the online booking process. Even decentralised SMEs prefer to focus on online travel agents that provide convenient booking and ease of process.
This, coupled with the demand for access to information on mobile devices, has prompted companies such as Executive Serviced Apartments to launch a website for mobiles. Customers can browse locations, access apartment and company information, view typical rates, keep up to date with the latest news and submit enquiry forms, all from the convenience of their mobile devices.
Booking portals, adds Cully, will “make life even easier for guests by letting them book extras from within the apartment, via the same booking portal that they used to choose the room.” The idea is to encourage the customer to treat the apartment as they would their own home and be wholly independent.
Business travellers also expect robust internet access with few added fripperies such as cable TV in their rooms, points out Cully, in order to concentrate on work. As an alternative, Deep Blue Apartments will be providing a fully kitted-out business centre in each of its buildings, while the living space remains more of a family area.
Alongside technological requirements, personal needs have changed as well. Lead times are much longer and stays are briefer, says Cully. Corporations that previously held an apartment for months at a time will now only book the days they require, and the length of stay overall is shorter too – businesses are only spending what they need to. As booking portals allow easier direct comparison and costing of services, there is a stronger focus on overall value than ever before.
This could prove important, says Larner of Deep Blue Apartments, when it comes to quality control. “There are no ratings within the industry,” she comments. “It needs regulation, so people know what they are getting.”
Whether you feel that mainstream hotel chains will take over the majority of properties, or think that a tailor-made, private service is what matters, serviced apartments are here for a long-term stay.
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