Serviced Apartment Summit: good news for global mobility?

With cost management and personalisation high on the agenda in the global mobility space, the latest benchmarking study for the serviced apartments sector – the Global Serviced Apartment Industry Report 2018/19 – is welcome news.  The GSAIR study shows a 23.7% increase in total global inventory over the past two years. Reflecting this at the Serviced Apartment Summit Europe was a dizzying array of terminology and concepts on the stands, in the conference hall and in conversations. Alternative accommodation, global housing solutions, urban tourism rerouted, design-led premium brands, micro-apartments, urban resorts and lodging partners were among the descriptors for the range of accommodation options on offer.

Serviced apartments: something for every assignee, commuter and business traveller?

Global mobility managers, who have long seen the virtues of serviced apartments for short-term and project-based assignments, but lamented the relative lack of supply compared to demand, will surely welcome this growth.Offering a safe, fully trackable and comfortable base for global mobile assignees and relocating employees in a wide variety of locations, serviced apartments fill a gap in the market that offers the flexibility to respond to the growing range of assignment types.The aparthotel, often co-branded to give that all-important hallmark of security and guarantee of positive guest experience, is becoming more commonplace for these reasons, especially as global mobility and business travel arrangements are starting to overlap. But is this increased inventory enough to reverse the plateaued growth from the relocation sector highlighted in the most recent GSAIR analysis?

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Other news and features from Relocate Global:

• First Wilde Aparthotel opened by Oscar Wilde’s grandson
• European based hotel operator continues UK expansion
• Short-term accommodation industry gets new trade body

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Where is the growth in the serviced apartment sector?

To explore the challenges in this maturing sector, Thomas Emanuel, director of business development for STR, a hospitality benchmarking company, analysed the data and confirmed that “from a demand perspective”, it “is great news.”He confirmed demand for this accommodation type grew 2.2% in Europe, according to STR’s analysis, against a supply increase of 0.9%. This story is repeated across Africa (5.3%), Asia (4.3%), Australia and Oceania (3.3%), South America (7.6%) and North America (2.7%). The only exception is Central America. Occupancy rates also remain well above 75% in the UK, UAE, China and Australia, reflecting this high demand.With relocation managers often citing a lack of supply as a challenge to accommodating assignees in second and third cities, for the UK at least, where serviced apartment supply is outpacing hotel growth, the medium-term looks more promising than the short-term.STR expects “triple-digit growth” in Glasgow, Manchester and Liverpool. York, Leeds, Edinburgh, Birmingham and Reading all have significant supply in the pipeline to complement serviced apartment providers’ existing inventory too, according to STR’s data. Overall. “there is lots of reasons to be confident,” said Mr Emanuel.

Current challenges and opportunities in the serviced apartment sector

With more supply coming on stream and in more widespread locations, will this maturing serviced accommodation sector connect with the needs of relocation and global mobility managers? Is it able to face down the concerns noted in the GSAIR report around quality, availability, security, location, legitimacy and consistent standards?Giving the buyer perspective on a panel of experts representing operators, travel buyers, distributors, technology and law, Jan Jacobsen, global accommodation buyer for international insurance organisation, AIG, said transparency, trust and speed are going to be key for the sector as it moves forward.

Building trust by getting the basics right

“Client expectations are broadening, so broadening distribution and the speed is the key,” commented Mr Jacobsen. “That is where we are going. Some are stuck in the Stone Age when it comes to distributing their inventory. Our challenge is to bring suppliers together into one platform and multiple channels and make it really easy to do business.”“GDPR has highlighted the importance generally of trust,” Mr Jacobsen continued. “We’ve always known trust is a fundamental for all aspects of success, but trust in the product and privacy of data, getting these basics right first and foremost is really, really important.“So is the speed of both response and booking vital. We have to reduce the turnaround time from days, to hours to seconds.”

Room for improvement in the serviced accommodation sector?

Jade Burke of PA magazine chaired an interesting conversation between Simon Morrison, CEO of Select Apartments, Elizabeth Da Silva of Barclays and Declan Halton-Woodward of Handelsbanken Wealth and Heartwood Investment Management, around guest experience – including their own experiences as bookers at the start of the process. Their experiences tied into the issues Mr Jacobsen highlighted.Overall, while the sector has been organising itself in the UK to provide consistent quality standards and ratings so guests know what product they are getting with transparency and consistency, panellists noted there are still many operators outside this. Check-in and booking also still has a long way to go to meet guests’ expectations. Similarly, real-time pricing and booking still lags behind that available in the hotel sector, making cost-projection, estimating and budget allocation a more painful process than necessary, especially when conducted over international time zones.

Is branding the key?

With the corporate sector now in competition for short-term rentals with leisure travellers, and advances in booking platforms, could branding – already important for the corporate market – drive further progress in this area? Three new operators in the market, Charlie Rosier of design-led apartments and co-working spaces with childcare, Cuckooz Nest; Vedrana Riley of Ciel Capital and tech-savvy aparthotel Stow-Away;  and Jonathan Humphries, of “Europe’s first luxury boutique aparthotel”, Alex Lake Zurich, presented their innovative new products.Each showed the direction of travel for this fast-growing sector – and the exciting possibilities for the globally mobile traveller and assignee as the sector continues to forge ahead.For related news and features, visit our Serviced Apartments section. Find out who won in this category in this year's Relocate Awards. 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

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