Serviced apartment companies are introducing new brands to attract all breeds of business traveller, reports Marisa Cannon.
When you’re away from home (and not on holiday), space, privacy and the freedom to cook when you want can be the Holy Grail of a comfortable stay. Serviced apartments offer the allure of familiar creature comforts and the ability to live more like a local. The demand is reflected in the numbers – the sector has been forecast to double in size over the next two years, according to a 2015 Spotlight report by Savills and the Association of Serviced Apartment Providers (ASAP).
Still, there are plenty of people who wouldn’t automatically think about trying one. To make themselves more attractive to business travellers – and attract a wider variety of them, from all generations – serviced apartment operators are working hard to strengthen their branding.
That’s not only in terms of building recognition but, in a move that mirrors the hotel sector, in breaking their offering into different sub-brands. Saco is one example of an established operator that has recently introduced a new concept – Locke, a design-led aparthotel brand designed to “combine the best aspects of boutique hotels and serviced apartments” with communal spaces that “connect you to a community of like-minded locals and travellers”.
Russell Kett, chairman of hospitality consultancy HVS, says: “It has happened [before] in the hotel business, where you have a lot of niche products playing to an audience [looking] for something that isn’t necessarily cookie-cutter. You’re seeing this now with serviced apartment providers, too.”
A report last June from the consultancy highlights the number of new brands that will soon or have recently launched – there is Mode Aparthotel from Bridgestreet, the Prem Group’s Premier Suites and Premier Suites Plus, and Apple Apartments’ Exclusive brand, which features only luxury properties.
Such moves are no doubt also designed to respond to the threat posed by Airbnb, which facilitated 40 million stays in 2015. Airbnb isn’t just a home-stay platform for peer-to-peer transactions but a way of distributing serviced apartments. Last year, global operator Bridgestreet was the first to partner formally with Airbnb’s corporate programme, Airbnb for Business, which means its inventory can be booked by Airbnb clients.
Airbnb has had a positive impact on the sector in that it has made people more accustomed to staying in apartments for leisure, and so perhaps more comfortable doing it for business as well. This year’s Global Serviced Apartments Industry Report revealed that 88 per cent of companies now used apartments for “one business reason or another”.
However, it hasn’t been welcomed by everyone. Thomas Emanuel, director of business development at hotel data specialist STR Global, says: “Some [serviced apartment] brands are embracing it and others aren’t. There are areas that are concerning in terms of taxation, and health and safety, but ultimately operators will have to adapt.”
Overall, Kett believes that Airbnb has raised the sector’s profile. “In the same way that Uber and the black taxis of London are at loggerheads, it’s a similar issue with Airbnb,” he says. “The sharing economy is here to stay. It is bringing in new customers, and expanding the market. I think it’s a complementary opportunity, not a contradictory one.”
All the same, more still needs to be done to increase awareness. A survey conducted by market research company BDRC Continental earlier this year found that most operators, unless attached to a major hotel group, were largely unknown to the public. Many can be found through online travel agencies, but this year’s Global Serviced Apartments Industry Report estimated that 28 per cent of serviced apartment inventory was still not bookable online.
Visibility is where hotel groups with extended-stay products, such as Marriott, Accor and Intercontinental Hotels Group, have a clear advantage. John Wagner, founding partner of hotel management company Cycas Hospitality, which works with IHG’s Staybridge Suites, says: “[It] enables immediate awareness and recognition, particularly in areas where the sector is less well known.”
Kett cites the opening of properties by some large groups that comprise both serviced apartment and hotels in one. “There’s a good example in the combined Holiday Inn and Staybridge Suites development near the Olympic Park in Stratford,” he says. “They’re focusing on both aspects of that market; people that want a straight hotel and those that want a serviced apartment.” In April, UK operator Staying Cool partnered with luxury group Bespoke Hotels, announcing plans to open mixed-use developments that combine hotels and serviced apartments.
For frequent travellers, loyalty programmes are an obvious advantage of the big hotel names – and that’s something that some apartment providers are starting to think about. George Westwell, director of London operator Cheval Residences, says that customer feedback has shown that its guests would like a loyalty scheme. “We need a programme that has an international currency, such as airline miles. We are trying to find a solution that will be beneficial to our customers,” he says.
Still, Jason Delaney, director of brand, product and marketing at Staycity Aparthotels, doesn’t think the lack of a points system is a deal breaker. “While loyalty schemes are popular, we believe that guests are no longer booking specifically because of one. Booking the room they want, situated in the area [they want] is their key concern.”
As the sector continues to grow, maintaining consistent levels of quality remains a challenge. “From property to property and brand to brand, it’s hard to tell what you’re going to get”, Miles Agbanrin, a research analyst for Euromonitor says. “There’s extremely good quality, and flexible accommodation, but if you’re going to appeal to business travellers, standards need to be maintained. It’s important because the industry is in so much flux and there are so many options available.”
With 162 owners, operators and agents as members, the Association of Serviced Apartment Providers is well placed to measure quality within the industry. The association’s Quality Accreditation Programme ensures minimum compliance of health and safety and informs standards around bookings and facilities.
“Accreditation is flying in the UK, Norway, Switzerland, Holland and is soon to be in Barcelona and Madrid,” says James Foice, ASAP’s chief executive. He reports that participation in the accreditation programme has grown steadily since it was first introduced in 2014, and has now reached 75 per cent of its members. This means you can be confident that an apartment will meet your needs the next time you check in.
NEW UK OPENINGS
Saco
Saco’s first Locke aparthotel opened in London’s Aldgate last month. Housed in a new-build on Leman Street, Leman Locke has 105 studios and 63 one-bedroom suites, as well as two meeting rooms, a gym and a 24-hour reception. The brand’s all-day catering concept, Treves and Hyde, will feature in the ground-floor bar and terrace and in a Scandinavian-inspired restaurant and bar on the first floor. Dishes include buttermilk wood-roasted chicken, smoked lobster rolls, ceviche and slow-cooked brisket. Rooms start at 29 sqm and feature bespoke furnishings by New York’s Grzywinski and Pons, kitchens with Smeg appliances and Nutribullets, Hypnos beds, rainshowers, smart HD TVs, high-speed wifi and yoga mats. In April, Saco opened the Cannon, a 77-room aparthotel on Cannon Street, which has a 24-hour communal area offering free tea and coffee and a library.
Staycity Aparthotels
Dublin-based Staycity Apartments has this year expanded into York and Birmingham, and added new apartments to its Heathrow site. A further 125 one- and two-bedroom apartments were installed in the airport property in March alongside a new lounge, café and breakfast area. Located in York’s Barbican district, the new 197-apartment property has a mix of studio, one- and two-bedroom units plus a café, lounge, gym, laundry and locker room. The group has also launched 170 apartments in Birmingham’s Newhall Square, with plans to open properties in London’s Covent Garden, Liverpool and Manchester next year.
Apple Apartments
Apple Apartments has expanded its UK portfolio this year with new properties in London, Edinburgh and Newcastle. Part of the new Exclusive brand, the duplex penthouses on London’s Park Lane have a porter, daily cleaning, private outdoor terraces and Bang and Olufsen sound systems. Not far from Heathrow airport, Apple’s new Kew Bridge property has 14 units. Housed in a Victorian property overlooking the New Town, the Exclusive Edinburgh is the group’s first in the city. The Newcastle property has seven units.
Oakwood
This summer, Oakwood added three new London options in Canary Wharf, Kensington and Fitzrovia. Stylishly furnished, the Canary Wharf property offers studio and one-bed apartments within walking distance of South Quay DLR station. The Oakwood Fitzrovia is housed in a Victorian building just off Oxford Street and contains luxury studio, one- and two-bedroom units, while the Kensington property is within walking distance of Gloucester Road station, and has studios and one-bed units. All are cleaned weekly and come with wifi, Bluetooth speakers, toiletries, and a Sky TV package (on request).
Skyline
Global operator Skyline has launched a new property minutes from London’s Mornington Crescent Underground station, just north of the newly regenerated district around King’s Cross. Located in an Edwardian-era warehouse conversion, Carlow House by Skyline has a mix of art deco-themed studio, one- and two-bedroom loft-style apartments positioned around a four-storey atrium with a dome. Bright and airy, the apartments have wifi, a meet-and-greet service and weekly cleaning. The group also opened properties in Canary Wharf earlier this year.
