How serviced apartments are tuning into modern traveler needs
As the line between work and leisure trips continues to blur, serviced apartment operators are both fuelling and catering for this growing ‘b-leisure‘ market.
More than two thirds of business travelers tag on extra days before or after meetings on at least one trip a year, according to Egencia. Combine it with changing traveler preferences for home-style accommodation in convenient locations, and serviced apartments are an increasingly popular choice.
“Many of today’s travellers want to stay somewhere where they tend to have more space and greater independence than in traditional hotels,” says Eva Chan, vice president of JLL Hotels and Hospitality EMEA research. “That’s also being met by a greater number of people who want to mix business with leisure, whether that´s bringing a partner along for the leisure portion or spending the weekend sight-seeing in a new city.”
It’s something that accommodation operators are aware of. New lifestyle brands such as Zoku, Locke by SACO, Wilde Aparthotels by Staycity, Adina and Bridgestreet’s Stüdyo are providing comfortable, high-quality apartments while big name hotel groups such as Adagio, Novotel, Hyatt and Marriott are also adding their own offerings to the mix.
As a result, it’s creating the fastest growing sector within the hospitality industry, with more than one million serviced apartments globally in operation at the end of last year, according to research by JLL.
While serviced apartment guests are looking for a different type of accommodation experience to that of a traditional hotel, they’re still looking for the human touch, albeit at a time of increased technology.
“This is not just keys in a lockbox,” says Chan. “Having a point of contact is still an important element of the serviced apartment concept. Check-in, for example, does not necessarily require the personal touch. But that’s not to say that guests do not value service or interaction – far from it.”
For serviced apartment operators, the need for less staff – given the absence of a breakfast kitchen area and accompanying staff for example – may prove to be a step in the right direction of efficiency, as well as changing the use of ground-floor space.
“Lobby areas are evolving into more communal areas where guests can interact and socialise,” says Chan.
Safety, meanwhile, is an area where serviced apartments have an advantage over the home rental market, where there’s no consistency between properties listed on the sites and quality levels are harder to gauge. Any issues are also more easily addressed, for example, by having an apartment manager available and back-up service in the case of a plumbing or electrical fault.
“If you’re offering a better, certified product, then companies will feel more relaxed about their staff staying in a serviced apartment,” says Chan. “That´s a clear differentiator from the private short-stay apartment product offered directly by an often-absent landlord.”
A growing market
Serviced apartments brands are expanding rapidly in Europe, says Chan, who points to “new names” such as Canadian investor Brookfield´s SACO in Europe, Adina in Germany – part of Australia’s TFE Hotels – and Dublin-headquartered StayCity, which in May announced plans to expand into Germany. The firm has 4,500 apartments either in the pipeline or already in operation in 10 European cities, and is aiming for 15,000 apartments by 2022.
The UK accounts for a large part of the growing market. Regional cities, such as Edinburgh, Manchester and Liverpool, are seeing more apartments, up 23 percent over 2017. But the sector is largely still in its early years.
“The sector is still quite fragmented and run independently,” she says. “You could argue that more branding is needed if these operators are to reach a bigger audience. A brand is almost like a service guarantee, boosting familiarity among guests.”
Around half of Europe´s serviced apartments are branded, according to JLL´s report, yet there’s room for more with the serviced apartment sector set to grow at a faster pace than hotels over the next few years amid rising traveler demand.
“Hotels need to diversify more and see the benefit of serviced apartments which drive a much higher margin than traditional hotels,” says Chan. “The demand is there from today’s travelers – now it’s up to investors and operators to provide more quality supply.”