|Skyline - The Tower|
Back in 2013, we forecasted 'The Rise of Serviced Apartments' based on the success of the industry in the US, increased consumer awareness of the sector and increased demand from business travellers. So far in 2014, we're already seeing some big changes.
As well as a general growth in the number and popularity of London serviced apartments as the city's demand catches up with the rest of the world, providers have been responding to the needs of their guests by becoming more flexible and looking carefully at how they intend to grow within the industry.
Here's just a few of the main themes we've seen developing in the serviced apartment sector so far this year:
1. Tapping into the Short Stay Market
Buying Business Travel recently reported about the growing movement from serviced apartment providers away from the long-stay corporate market and towards more short-stay business travellers. As the concept of serviced apartments becomes more familiar to consumers, there is an opportunity for providers to tap into the market for short stay business and leisure lets which otherwise would have been serviced by hotels or private rentals.
This growing demand for short and medium stays has been recognized by serviced apartment suppliers and, as referenced from the Savills Serviced Apartment report Q4 2013, they have reponded by 'splitting larger units, traditionally more attractive to the longer staying guest, into one bed and studio apartments'. The future expansion of serviced apartments into a wide range of different target markets will require a greater variety of offerings to choose from to cater for different needs.
An example of this can be seen in the rebranding of BridgeStreet Global Hospitality before it was acquired by Versa Capital Management. Properties have been split into six different categories ranging from six-star luxurious accommodation to two-star basic apartments aimed at students and interns. This increased classification simplifies their services and helps different target markets to find the accommodation which caters for their specific needs and preferences.
|View from Cheval Three Quays|
2. Serviced Apartments vs. Aparthotels
With less and less travel buyers relying on travel management companies, it is important that providers work to develop branded products that make the serviced apartment concept more familiar to consumers.
This has created a movement away from operators taking on units in existing blocks and towards more branded developments and aparthotels. We can certainly see the effect of this in recent developments, such as the opening of Cheval Three Quays and also Skyline's The Tower, which is the company's first serviced apartment development in central London. Both of these developments work as strong stand-alone buildings with unique USPs which will help to get the product noticed in the short stay market. The Buying Business travel report confirms this trend stating that 'the number of internationally branded serviced apartments across Europe is set to double over the next two years'.
3. More relocation clients
Offering value for money, more space, self-catering facilities and inclusive services, serviced apartments have always been a great option for relocation guests. However, due to the longer stays that relocations require, Relocate Magazine documents how more providers are targeting this specific market by training staff to provide solutions to accommodation problems.
With relocation clients, there is an increased requirement to support guests and for packages to be tailored to individual needs. This means a greater need for flexibility, such as flexible sleeping arrangements for those travelling with family. If guests' needs can be catered for, this ensures a shorter settling in period which is essential for relocation. The Ascott Limited go one step further to keep their relocation guests satisfied by allowing pets in all of their London Citadines Aparthotels and even creating personalised housekeeping programmes to keep the dissruption to the pet's routine minimal!