As companies search overseas for new markets, launch new products and learn to operate in leaner, more agile ways, the way they deploy talent is changing, and so are the solutions for accommodating their staff on assignment.Two key trends are emerging in the market – a focus on lifestyle and community to enhance the quality of the experience for guests; and a move towards luxury, which is being driven by the growth of Branded Residences at the very top end.The Knight Frank Branded Residences Report 2019 reveals there are now more than 400 branded residences across the globe, the majority ofwhich are hotel branded. The sector has seen strong growth, with hotel branded residences present in over 180 locations and 64 countries globally.

Hotels dominate the sector

The traditional branded residence concept is a hotelled development with integrated or linked residences. They benefit from the hotel brand, management and services, combining the comfort, space and permanence of a home but with the full benefits and luxury of a five-star hotel.The demand has come from global ultra-wealthy clients ($50m+ in net assets). According to Knight Frank’s Wealth Report, the ultra- wealthy grew by 18% in the five years up to 2017 and is forecast to increase a further 40% over the next five years.The latest example is London’s Four Seasons Residences at Ten Trinity Square. These luxury apartments include views overlooking the Tower of London and Tower Bridge from their private terraces, with interiors featuring the capital’s top designers, including Martin Kemp Design, Linley, Richmond International and Fox Linton. No 41 is the largest apartment with an internal area of 447 square metres over two floors and an external area of 175 square metres. Aimed at the corporate sector, high-net worth individuals, the entertainment industry and diplomatic staff, the residences show that London is in demand despite concerns over Brexit.The trend shows little sign of abating. Marriott alone has more than 60 branded residential projects in the pipeline and plans to open 19 branded residential projects in nine countries in 2018 to 2019, the report says.Together Marriott, Four Seasons and Accor Hotels represent over half of all hotel branded residences, with Marriot alone accounting for three-quarters of these. North America is the most developed market, followed by Asia. Dubai and London are showing strong growth, and since the opening of One Hyde Park, the first European residences at the Mandarin Oriental, the London market has seen an increase in branded residences at the top end of the market.

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SilverDoor Apartments, provider of serviced apartments for business travel, says global mobility makes up about 25% of its business.

• The average length of stay for all bookings over the past two years is 50 nights.
• London is the most popular location with 34% of all global mobility bookings being for apartments in the UK capital.
• International hotspots include Luxembourg City (18.3%), Dubai (10.3%) and Dublin (8.2%).

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Market trends for next year include new offerings and technologies to cater for different demographics, with options for millennial families; more experiences such as wellness facilities, and a greater focus on eco-design and operation. Other hotel brands such as Firmdale, Jumeirah on Park Lane at Grosvenor House Suites, and Mandarin Oriental’s plans to create a hotel with 80 residences in Hanover Square by 2021, are catering for the most discerning clients.

The rise of the mid-market apartment

While branded residences appeal to the ultra-wealthy, the trend towards a more immersive experience, rather than just a hotel stay, is filtering down to the mid-market as well. What are the emerging trends in the serviced apartment sector?For many staff, feeling part of the community while they are living and working while away from home is part of the experience of the assignment.“People are interested in more of a lifestyle approach to where they live and work,” says Stephen Hanton, chief executive officer of SACO, The Serviced Apartment Company. SACO, newly acquired by US investment giant Brookfield, has recently launched Locke, a brand which aims to combine the best aspects ofboutique hotels and serviced apartments and is designed to appeal to workers in the tech and creative industries.“While people are on assignment they might want to join a yoga class, a running club, attend a TED talk, or a cocktail party for other residents in the block. That lifestyle approach sits well with serviced apartments and an extended stay,” he explains.Marc Sandfort, area manager UK at The Ascott Limited, says the sharing economy is continuing to influence the sector by opening travellers’ minds and new brands such as Ascott’s Lyf have developed to respond to this emerging trend with millennials in mind.Authentic experiences within the new city have become more important to those looking to move, with the idea of living like a local and fully immersing yourself in the heart of the culture being a major factor for those looking to move, he points out.

Duty of care

At the same time, employers are under increasing pressure to comply with health-and safety-regulations and ensure staff are safe. They need to know that employees can be located and evacuated quickly if necessary, something which is particularly important in new or emerging markets. They also need to keep an eye on budgets while making sure staff are happy and performing well.For many companies, serviced apartments and aparthotels provide that long-term flexibility and security, and fill the gap between the convenience and safety of a short-stay in a hotel and the flexibility of a flat. Serviced apartments also offer more space and can be used for business meetings as well as a place to sleep and eat.Savills, the international property manager, estimates that the number of purpose-built serviced apartments across Europe will expand by over 50% during the next two years driven by the limited supply currently seen across crucial gateway cities (London, Paris, Frankfurt, Amsterdam, and Belgium).The Annual Global Report & Forecast by the GBTA Foundation, the education and research arm of GBTA, predicts global business travel spend to advance 5.8% on average over the next five years reaching $1.6 trillion by 2020.

The global workforce

In a global marketplace, the best employee for the role may not be located in the same country, or even the same continent.PwC predicts that by 2020 there will be a 50% increase in overseas assignments undertaken. Its data indicates that assignee levels have increased by 25% over the past decade, and by 2020 multinational companies will have, on average, assignees in 33 different countries.“There will be more assignees, more business travel, more virtual tools, and especially more quick, short-term, and commuter assignments,” it says in its report Talent Mobility 2020: The next generation of international assignments.With this shift comes additional responsibilities for companies and, in particular, HR and business travel departments. Managers have a duty of care to their employees – in an insecure world, staff security and being able to locate and evacuate people with very short notice is essential. So, too, is personal security, particularly when pushing into new or unexplored markets where the local culture may be unfamiliar.The Global Serviced Apartments Industry Report 2018-2019 estimates that growth in serviced apartments has risen to 1,096,547 worldwide, while the number of desinations in which serviced aparthotels are located has risen by 22%, which shows that operators are expanding in both new and esisting locations.

Staff preferences are changing – and so is technology

“Serviced apartments continue to be integrated into corporate travel and mobility programmes,” says Darin Karp, founder and CEO of ReloQuest. “The majority insist on being more involved in the procurement process, preferring to research their accommodation.”Mr Karp says there has been an increase in employees travelling overseas more frequently, and it makes smart business sense for companies to seek less expensive ways to accommodate them. Also, when families travel with the assignee, their preference is to choose a different environment than that which hotels offer.

Business or pleasure?

Airbnb has led the expansion of the short-term rental market, disrupting business models and alerting both leisure and business travellers to the benefits of stay somewhere other than a hotel.“In recent years, the serviced apartment sector has grown more than any other temporary accommodation class in Europe,” says Mr Karp. “A new trend that has been receiving attention within the sector is the growing ‘bleisure’ market – an evolved segment of the travel industry. The bleisure market is where business travellers extend their business trips into a leisure holiday. Millennials in the workforce are said to be driving the bleisure trend popularity, as they seek more flexibility.”James Foice, chief executive of ASAP, the Association of Serviced Apartment Providers, says that in the UK the sector is showing strong growth, with 2,000 new units this year in the UK despite the uncertainty of Brexit.For business travel and HR departments, apartments provide security and a way to control costs.“You pay for the apartment and not per person,” he says. “You can add on services you need - if you want the fridge stocked for an employee who will be arriving on an overnight flight from Japan, then that is an option. It’s a way of keeping the base concept affordable and you are not paying for services you don’t need,” he added.From September 1, ASAP has become an accredited-only membership association, collectively operating over 100,000 apartments around the world. This gives companies the reassurance that the accommodation they book has been checked for health-and-safety regulations, is properly insured, and that the website is delivering what it says and is not overpromising. It means when a booking is made, managers can be sure that the place they are sending staff to exists and is genuine, safe and fit for purpose.While Airbnb has shown leisure travellers that apartments have more space, are comfortable and a more interesting place to stay than a hotel room, many corporates would not consider it as an option for relocating employees due to quality and security issues, says Stephen Hanton.

Demand for social and communal spaces

At the other end of the market, aparthotel rooms are becoming more compact, but communal space is increasing. This in turn is pushing communal space as the way to socialise and entertain, rather than the old extended stay sales-pitch of being able to do this in your own private apartment. New brands have entered the market – SACO’s new Locke aparthotel brand, along with Wilde Apartments by Staycity, Citadines, Ascott and Supercity’s rebranding of its aparthotels.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Access hundreds of global services and suppliers in our Online Directory _{©2018. This article first appeared in the Summer 2018 edition of Relocate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.}