Serviced apartments have been around for years, providing a home from home for longer trips away, but interest in using them for shorter stays is on the rise. The economic crisis may well encourage this, as people shop around and find serviced apartments offer more space, more privacy and more facilities.

Hotel groups are aware of this trend – while careful not to dilute their traditional brands, many are opening serviced apartments (dubbed extended stay, aparthotel, corporate housing or residences). Dedicated serviced-apartment companies also say business has never been better, with plenty of new openings.

According to a recent survey published by the Institute of Travel Management, nearly 50 per cent of business-travel buyers have found that serviced apartments have become an increasing part of their accommodation management. When asked the reason for choosing serviced apartments, 42 per cent said they were being used in a traditional way (for stays of five days or more), 29 per cent were using them to reduce costs across all stay types, and 24 per cent as a direct alternative to hotels.

Travel management companies are also reporting more interest in serviced apartments. Margaret Bowler, director of global hotel relations at HRG, says: “The number of business travellers who are staying in serviced apartments is on the increase as they are often better value. They are also more convenient for travellers, especially business women, who don’t like eating alone in restaurants. More serviced apartments are becoming available, and we are receiving more enquiries for locations such as Dubai and Russia, where the hotel rates are particularly high.”

According to the Apartment Service’s annual survey, most operators are focusing on the upper end of the market, with the four-star category in the majority in all regions. Bard Vos, marketing executive at the Apartment Service, says: “The business community is really beginning to see the benefits that serviced apartments give over more traditional hotel accommodation, simply because they’re cheaper – for longer stays they can be as much as 30 per cent less than comparable hotel accommodation.”

North America

The serviced apartment concept was born in the US – the first branded chain, Residence Inn, coined the term “extended stay” in 1975 to describe its apartment-style accommodation. It is no surprise, therefore, that the region is one of the most mature and diverse markets; many large hotel groups have at least one serviced apartment brand (Marriott has three) and, according to the Apartment Service’s survey, it is also the region with the most two and three-star properties.

The Residence Inn brand is still around today, now owned by Marriott and minus the signature orange doors of the early years, with more than 540 properties in the US, Canada and Mexico. Marriott’s lower-tier offering, Towne Place Suites, can be found at 128 locations across the US.

Intercontinental Hotels Group also has a finger in the pie with the upmarket Staybridge Suites. Launched in 1997, the brand has experienced massive growth – in 2007 a 100th property opened in North America, and the first overseas one opened in Liverpool in 2008 (see for a review), plus 178 properties are in the pipeline.

Other established brands to look out for include BridgeStreet Worldwide, Extended Stay America, which has budget and deluxe options, and Hilton’s Homewood Suites.

New concepts are also coming on line. Starwood has entered the extended-stay market this year with the introduction of Element, inspired by the group’s Westin brand. The first Element opened near Boston in July.

Brian McGuinness, senior vice-president of Element, says: “It’s a place to spread out and be at your best. It offers eco-friendly living, lots of natural light, larger spaces and great kitchens… and I think that generally serviced apartments don’t offer that.”

The focus is on wellness, with large gym facilities, and socialising, with weekly barbecues and drinks parties. The environment is also important for the new brand – all new-builds are approved by the Leadership in Energy  and Environmental Design (LEED) and bathrooms have water-efficient rain showerheads, while guests have access to free bikes. More than 20 more Element openings are planned for the next five years, mostly in the US and Canada.

Middle East

Starwood is also intending to try out its new brand in the UAE, with a property in Abu Dhabi due to open in 2011. Serviced apartments are already proving popular in the Middle East, which is focused on the high-end market – it is currently the only region not to have any two or three-star offerings. Figures from the Dubai Department of Tourism and Commerce Marketing show that the average stay in hotel apartments is 4.4 nights, with occupancy rates at around 80 per cent, despite the number of apartments having risen by over a third since 2006, from around 8,700 to more than 12,800 in 2008.

With more growth on the horizon, the region is attracting investment in serviced-apartment developments from overseas, as well as regional players such as Jumeirah, Rotana and Emirates. The Jumeirah Group opened its first extended-stay “super-luxurious” residences in August 2008, launching the Jumeirah Living brand. Close to Dubai’s financial centre, the World Trade Centre Residence is spread over 40 floors and two towers, and has a mix of one and two-level apartments with between one and four bedrooms.

Julie Shields, group general manager of Jumeirah Living, commented on the launch: “A lot of the big hotel groups are now really driving the serviced apartment business. We’ve seen incredible growth in Dubai, and a huge amount of interest, very much driven by the corporate extended-stay customer telling all of us big hoteliers that this is what they’re looking for.”

Abu Dhabi-based hotel group Rotana opened its first Arjaan Hotel Apartments in Dubai in September 2008, in Arjaan Dubai Media City, a new complex with offices, shops, car rental, hairdressers and beauty salons. Emirates Hotels and Resorts, the airline’s hospitality branch, opened Green Lakes Serviced Apartments in May 2008, situated in the centre of the Jumeirah Lake Towers development, on the Sheikh Zayed Road and near the new light-rail system.

From further afield, American company BridgeStreet Worldwide has six new openings planned, totalling more than 1,561 apartments, and Asian-based company The Ascott Group has a new property in Bahrain opening in 2011. Frasers Hospitality, another of Asia’s heavyweights, plans to open serviced apartments in Dubai and Bahrain in 2009, plus Abu Dhabi, Doha and Kuwait to follow.


On home territory, Frasers, in the four to five-star bracket, has more developments planned. After launching in Singapore in 1998 with two flagship properties, the brand has since expanded into Australia, North and South East Asia, and Europe, and plans to open 5,000 new apartments worldwide over the next two years, taking the total to 9,000 apartments in 81 properties. Choe Peng Sum, CEO of Frasers Hospitality, says: “Demand for extended accommodation is seeing an increase in gateway cities of countries experiencing tremendous economic growth including China, India and Vietnam.”

In China, Frasers has properties in Beijing, Shanghai, Hong Kong, Shenzhen and Nanjing, and additional ones are planned for Beijing, Shanghai, Guangzhou, Tianjin and Chengdu. Frasers is also due to enter the Indian market by 2010, with seven projects in the pipeline for Bangalore, Hyderabad and New Delhi, in up-and-coming Gurgaon.

Gurgaon is also the location of choice for Leela, one of the top-end hotel groups in India, which is launching its first Leela Residences in January. According to Vella Ramasawmy, the general manager of the new property, Gurgaon is the new business hub for the region. “A lot of businesses are moving to Gurgaon from New Delhi because it is getting too crowded.” India is drawing a lot of attention from the serviced-apartments segment, with BridgeStreet Worldwide looking into new partnerships, as well as The Ascott Group.

British based Saco, which specialises in sourcing serviced apartments internationally, has seen huge growth in Asia, and according to Naomi Milne, Saco’s network relationship manager, the trend isn’t limited to capital cities, it is also evident in second and third-tier cities, especially in fast-growing economies such as India and China: “These third-tier cities have hardly any infrastructure in place but some kind of industry, such as mining or call centres, that is really starting to develop, hence they really need to bring in contract workers. Serviced apartments are now heavily competing, as much as hotels are, for the international traveller.”

Moving south, Quest, with more than 120 properties in Australasia, has new properties springing up in regional business locations. Paul Constantinou, chairman of Quest Serviced Apartments, says: “Quest aims to be everywhere the corporate traveller needs to be. Our properties are located conveniently near major airports, high business traffic suburban and regional locations, and central business districts, and our expansion plan is on regional hubs.”

The Ascott Group has three brands to suit different travellers’ needs. Somerset Serviced Residences is more family focused, while Ascott’s Residences and Citadines Apart’hotels tap into the higher and lower-end markets. Ascott and Somerset are widespread throughout Asia, with Citadines increasing its reach – a new property is set to open in Australia in 2010. The group has 16,000 apartments in Asia, Europe and the Gulf region, as well as more than 6,000 units under development.


The Ascott Group has a strong share of the European market as well, with the Citadines brand proving popular with travellers. Rebecca Hollants van Loocke, regional general manager of Ascott UK, says: “You can pick and choose what you want along the way and make your package what you want it to be.”

After the US, Europe is the most developed market for serviced apartments, and those stateside are keenly looking towards Europe, with IHG and Marriott already in situ. European-based companies are also investing in the model. Kempinski, based in Germany, is one of the hotel groups placing itself firmly in the serviced-apartment arena. There are six Kempinski Residences worldwide, with three in Europe and three in Asia, and another 15 in the offing.

Robert Curzon Price, vice-president of Kempinski Residences, commented on the serviced-apartments segment in Europe.

“In the last ten years it’s clearly been growing. In Europe we didn’t know much about serviced residences, and now many hotels under development have a residence section for longer stays – including 80 per cent of the new Kempinskis.”

After Beijing, the first European Kempinski Residence was opened in St Moritz, a prime leisure destination, but these days its business that’s the big earner. Curzon Price says: “90 per cent of our occupancy is made up of business travellers who usually stay in our residences for one month or more.” Price predicts that in the future, all business travellers will be using serviced apartments for stays of seven nights or more.

Eastern Europe also has plenty to offer, with brands like MaMaison offering serviced apartments in Moscow, Bratislava, Prague, Warsaw and Budapest. BridgeStreet Worldwide, is also a key player in Europe, as well as internationally. The serviced apartments segment has become more diverse and accessible, and the quality of the product and standards of service can only improve as brands seek both new and loyal business. Jo Layton from BridgeStreet Worldwide, with offices in three time zones, is clear about the global nature of the business. “You want to be able to have your reservations dealt with on your timeline.”

For business travellers, serviced apartments are now a key option to consider when planning a trip, whether it’s for one night, one week or several months, and the cost benefits could make all the difference. According to Margaret Bowler from HRG, it’s a model for success: “Due to the flexibility and freedom of serviced apartments, we anticipate that, for the right type of traveller, interest in them will continue to increase.”


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