Accommodating short-term business visitors

Will the rise in short-term business visitors help serviced apartment providers and HR global mobility managers to ride the waves that are being thrown up by the choppy conditions of Brexit, the global economy and currency turmoil?


See more features about serviced apartments in the Autumn 2016 issue of Relocate magazine on our Digital Issues page.

At the end of December 2013, PWC Law Firm Services helpfully clarified the definition of short-term business visitor (STBV) in response to HM Revenue & Customs’ (HMRC) change of approach (UK Position on Short Term Business Visitors, PWC Law Firm Services, December 2013).In summary, the new position was that “where employers accurately identify those employees exempt from UK tax under a treaty, HMRC have indicated that they may still apply PAYE penalties for failure to withhold. HMRC’s view is that, although a treaty protects an individual from income tax, it does not affect an employer’s PAYE obligations.”This stricter approach had some upsides, with UK-resident individuals now able to be included in STBV agreements with an Appendix 4 Agreement in place.

Appendix 4

For Appendix 4 to apply, the individual must be:
  • Resident in a country with which the UK has a double taxation agreement under which the Dependent Personal Services/Income from Employment Article (Article 15 or the equivalent) is likely to be competent 
  • Coming to work in the UK for the benefit of a UK company or a permanent establishment (PE) of an overseas company
  • Expected to stay in the UK for 183 days or less in any 12-month period/UK tax year
Another key factor is that HMRC expects companies to have in place robust tracking systems that allow them to confirm the whereabouts and movements of their STBVs.
  • Staff of all grades will periodically report days spent in the UK on business to the central point controlling this arrangement
  • Staff should not spend more than 30 days intermittently in the UK in any 12-month period without reporting to that central point
Companies may track their STBVs using the following methods:
  • Security passes
  • A separate signing-in book
  • An expenses system
  • Timesheets/work reports
  • Computer log-on activity
  • Online diaries/calendars
  • HR database systems
It is, therefore, not surprising that consultants, tax advisers and relocation management companies have worked feverishly to develop their global mobility reporting systems to be ever more sophisticated, and that a tranche of helpful apps from all manner of suppliers, from healthcare companies to destination service providers, offer options to support easy tracking.The rise in the importance of the Relocate Awards technology category, with the strength of entries, is testament to this. See the winner of the 2015/16 Relocate Award for Technological Innovation.

Serviced apartments 

The part that serviced apartment providers can play in this is significant. They tick the boxes on helping minimise such compliance risk, and the big players, who know and understand the global mobility and relocation market well, will ultimately be the winners.Those who couple their depth of knowledge with a real understanding of duty-of-care issues will be set to succeed and capitalise on the tide of movement that is inevitable as the implications of Brexit become clear. 
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The new crop of industry surveys out for 2016 is already confirming that the length of international assignments continues to get shorter and that short-term assignments and business travel are on the increase.What is really interesting about the current situation is that it is all coming together. Increasingly, it makes sense for HR global mobility managers and HR relocation specialists to embrace the STBVs to ensure that mobility is firmly under their control. Not to do so is a huge risk for organisations.The art will be for HR global mobility professionals to see this as a strategic advantage and a chance to support their organisations as a business partner – not to lose the opportunity and become bogged down in the minutiae of the administrative aspects.Business travel departments in many large organisations are well equipped to shoulder the burden.

The business perspective

At the recent Serviced Apartment Summit, during a session exploring how the role of the travel buyer may change in the future, Helen Jefferys, from PWC, Kevin Carr, from UBS, and Steve Proud, from Citi, illustrated how financial services and banks were already firm fans of serviced apartments.PWC strongly recommends the use of serviced apartments for stays of more than four or five nights. UBS has a mandated policy over six nights. Citi no longer has a minimum stay requirement. With high volumes and the average length of stay growing, it is seeing a shift to serviced apartments.Citi has large regional service centres in Poland, Nashville and India, where people are doing training or project work. PWC’s requirement for serviced apartments in London has grown hugely. The company has set up an extended arm out of Belfast, and sends teams to work out of London. It now has an apartment group that is growing all the time. Eighteen months ago, following an RFP, it took the decision to use two new providers working closely together.When asked to what extent UBS was synchronising with relocation, Kevin Carr admitted that, although they did have a partnership, they could do more to leverage it. Steve Proud explained that requirements of 90 days or more sat with Citi’s mobility department. Asked what would stop people choosing to stay in a serviced apartment, the requirement for a reception, a lounge and a bar was flagged up. Helen Jefferys felt it was still easier to book a hotel, and that there wasn’t the knowledge of serviced apartments, which could be addressed. Employees, she said, liked the loyalty points offered by hotels.The panel acknowledged that all corporates were potentially looking at Airbnb, but said there were still challenges, particularly around robustness of safety and security. 
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Some employers, such as Google, are more open to the peer-to-peer economy than others. There is also interest from smaller independent companies, which want the flexibility and a competitive price but don’t have enough volume for a travel programme.As Shaun Hinds, of BridgeStreet Global Hospitality, pointed out in another session, employers are realising they can’t stop Airbnb because it delivers what some employees (often the younger generation, who regard peer-to-peer services as normal rather than disruptive) want. Via its partnership with Airbnb, BridgeStreet is also picking up independent business travellers wanting stays of 18 days plus who are not big enough for a travel programme but want professionally managed accommodation. Although currently minor, the flow is becoming more rapid.Shaun Hinds also touched on the shift towards short-term stays and the response by some serviced apartment providers to become more like a “hospitality-based” company than a property developer. This change in proposition, he said, offered a more viable option against traditional hotels. The new BridgeStreet Mode product was designed with this in mind. The SACO Locke product also more readily fills the short-stay space. No doubt potentially easier planning consent for shorter stays will also be a consideration. Equally, more hotels may look to move into the aparthotel sphere.

Aparthotels on the rise

This brings me to the rise of the aparthotel. The large operators, such as The Ascott, winner of the 2016 Relocate Best Serviced Apartment Provider award, offer seamless tracking as part of their service. With coverage in global regions, including fast growth in APAC, the mechanisms are there for Ascott to give employers exactly what they need.The Citadines apartments currently being refurbished at the Barbican capitalise on the buzz of the creative industries and the tech companies and easy access to the city Fintech (financial technology) companies. The new, welcoming receptions and drop-by catering from the restaurant will give a vibrant atmosphere and pull in the local workers popping by for a morning coffee, a healthy bite, or, throughout the day, a welcome juice or salad break.BridgeStreet Global Hospitality has introduced its new aparthotel brand Mode Aparthotels, and is responding to shifting travel trends by targeting global hotspots and retrofitting existing buildings, offering a 24/7 front-desk concierge, community areas for gatherings and the space of an apartment to live and work in.
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“We are here to be a part of the community, work with the local vendors, and recommend the best establishments,” notes Sean Worker, BridgeStreet’s president and chief executive officer. “Each Mode Aparthotel will offer a bespoke, unparalleled experience to our guests by providing them with high design and comfort.”Three to five Mode Aparthotels will be developed in California over the next four to six years, and ten to 15 in key cities throughout India over the same period, helping to meet demand in relocation hotspots. The mood may be relaxed, but for corporates there is reassuring reporting wherever a guest chooses to stay, even if it is for a few days’ business trip or a long weekend seeing the sights while working in a particular region. Safe, secure, trackable, but free to choose the style of accommodation that suits the context.In October, SACO will launch Locke, its new aparthotel brand. Tellingly, new general manager Ashley Ely and commercial manager Samantha Sheridan come from hospitality and hotel backgrounds. The new brand is described as combining the best aspects of boutique hotels and serviced apartments. Leman Locke will open on London’s Leman Street in Aldgate in October, with further properties due to be rolled out across the UK and Europe from 2017 onwards.Consisting of a total of 168 apartments divided into 105 studios and 63 one-bedroom suites, Leman Locke will also offer guests two Sky meeting rooms, a gym, two bars, all-day dining and spacious indoor/outdoor lounge areas, with ultrafast wi-fi throughout to accommodate the modern business traveller.

Australian brand making a mark

Now on the scene, Australian big brand Quest Apartment Hotels is here to do serious business. As a major player in Australia, where serviced apartments occupy 25 per cent of the market compared with 5 per cent in the UK, the company has knowledge to share. It also operates in New Zealand and Fiji.Andrew Weisz, Quest’s director of UK development, spoke at a session at the Serviced Apartment Summit. He made the point that the more brands in the market place, the more people are aware of the sector’s existence, resulting in growth for everyone. In Australia, there is a sophisticated accommodation-franchising model for the sector, he explained, with a track record that is accredited by all top banks. Here, they are creating a market.
Mr Weisz was appreciative of the welcome from the serviced apartments sector, and found the industry more sharing and open than in Australia. Relations may not continue to be quite so cosy as Quest starts to flex its muscles and aims to take a bigger market share.The two other brands well known to relocation users in the aparthotel space, Staybridge Suites and StayCity, also have expansion on the horizon.Meanwhile, new openings in London continue, with Oakwood Worldwide introducing three new locations: Canary Wharf, Kensington and the West End’s Fitzrovia.Says Debbie Lundon, Oakwood’s managing director for EMEA, “The demand for serviced apartments within London exceeds the current supply, so we are always looking for opportunities to expand our presence in key locations near where our guests work and want to live.”For the consumer, this can only be good. More choice, more properties and competitive pricing. We wait to see how things unfurl. Keep up to speed via the Serviced Apartments section of our website.

The following sections may also be of interest: International Assignments, Culture and Language

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