Business class: Serviced apartments

Date: November 5 2010
Source: Financial Times
Website: http://www.ft.com/cms/s/0/f4f2881a-e86a-11df-b32f-00144feab49a.html#axzz15SHinjbv

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More executives are opting for the home-from-home experience offered by serviced apartments.

At the highest level, these combine all the comforts of home with the benefits of a five-star hotel. The best are lavish, fully equipped with high-quality kitchens, spacious bedrooms and spa-style bathrooms.

“There are lots of reasons to choose a serviced apartment,” says Ascott, one of the biggest global names in serviced apartments and corporate housing with a portfolio spanning more than 70 cities across 22 countries. “You can invite people in, have your family there and enjoy a flexibility that hotels can’t always achieve.”

Ascott, which also operates the Somerset and Citadines brands, has 20,000 serviced residence units in Europe, the Asia-Pacific region and the Gulf, with a further 6,000 units under development globally.

Ascott says flexibility is at the core of its culture. While some providers insist on long minimum stays, its clients can book any duration from one night to 10 months on a sliding rate scale. Last year, it launched a loyalty club for serviced apartment bookers which, it says, is a European first.

In the UK, figures from the Association of Serviced Apartment Providers show that demand continues to grow at an encouraging pace, with London occupancy averaging 90 per cent in the third quarter, 4 points up on the second.

For the rest of the UK, the overall occupancy in the third quarter was 75 per cent, a 5 percentage point increase on the second quarter. The average net weekly rental for London was £876 ($1,424), 2.5 points up on the previous quarter. For the rest of the UK, the average net weekly rental was £600, 1 point up.

Cheval Residences owns properties in London’s poshest addresses, including Chelsea, Hyde Park Gate and Knightsbridge. It says the year’s most obvious trend has been the short notice for securing accommodation.

It comments: “It is not uncommon now to receive calls from clients needing accommodation in a few days’ time for stays of up to six months.”

Go Native, provider of temporary housing solutions in the UK, Europe, the Middle East, Africa and India, notes in its 2010 London serviced apartment report that rising demand is being fuelled not just by corporate travellers; the sector’s profile is growing among leisure travellers.

It says corporate demand for serviced apartments is shifting from prime central to less expensive secondary locations in response to the need to reduce costs and is also moving towards smaller unit sizes and shared occupancy.

SACO Apartments, provider of 12,000 units in 35 countries, says it can foresee the time when apartments are as popular as hotels.

Jo Redman, its sales and marketing director, says: “In comparison to 2009, the market has seen tremendous buoyancy, particularly in London, where SACO has expanded rapidly to meet heavy demand.”

She adds that SACO has also seen growth in other UK cities, such as Manchester, Birmingham, Bristol and Glasgow.

Compared with the number of hotel rooms offered worldwide, the service apartment sector is still tiny. But a growing number of luxury hotel groups are choosing to build or manage serviced apartments alongside their existing hotels.

One example is the Leela Kempinski Gurgaon in Delhi, India, which opened 90 serviced residences last year. Its services include daily housekeeping, on-site parking, round-the clock security and maintenance, a babysitting service and an on-call doctor.

Residents have access to complimentary and discounted hotel facilities such as the fitness centre, spa, business centre and private meeting rooms.

Brian McGuiness, senior vice-president of Starwood’s speciality select brands, including Aloft, Element and Four Points by Sheraton, says: “Serviced apartments are a natural extension of our business. Apartment users need dry cleaning, laundry services, internet, and a place to sleep.

“In emerging markets, stays of 30, 40, 60 and 90 days still remain popular, but better connectivity and communication has reduced that length of stay in more mature markets.”