Serviced apartments: the guest experience opportunity

Could the serviced apartment sector, with a growing understanding of how to deliver guest experience, be the answer for corporate HR keen to meet employee experience expectations in a new location?

Autumn 2019 issue of Relocate magazine
This article is taken from the latest issue of Relocate magazine 
– the must read for HR, global managers and relocation professionals.There is never a shortage of new apartment openings to cover in the sector. Press releases from around the world announce new openings of gorgeous apartments and residences, as well as compact and purposeful studios in exotic locations, but what does this mean for the employer market? At its most basic level, business travellers, relocating employees and those on international assignment need somewhere to stay wherever they are going.With the growth of the serviced apartment and apart-hotel industry around the world, staying in this flexible accommodation offers more space and better amenities than a hotel, is better value for the employer and gives the employee a ‘home away from home’. Add to the equation a convenient location, plus the ability to balance timetable, lifestyle and work-schedule demands – serviced apartments are a perfect fit.Even though the employee can be tens of thousands of miles away from the office and their family and friends, this type of short-term accommodation allows them to feel as connected as they wish to be, thanks to state-of-the-art technology in the property, an increase in shared spaces and helpful pointers about what is going on in the neighbourhood for guests to enjoy during their stay.

The rise of the guest experience

This is all good news for the sector because companies are currently embracing the concept of employee experience more than ever before. The quest for better employee experience very closely aligns with the serviced apartment sector’s preoccupation over recent years with the ‘guest experience’. This is also well documented across the entries for Relocate’s Best Serviced Apartment Provider Award, including global winner SACO’s focus on connecting with clients on a human level and taking care of assignees, which includes the introduction of well-being and cultural initiatives.Global talent shortages across countless industry sectors, a huge change in markets and the increase of international collaboration on projects and complex supply chains mean that employers need to retain highly skilled and expensive talent. These professionals expect a smooth transition to their accommodation, which is safe, secure, convenient and trackable in the same way they expect their travel, immigration and tax and compliance information to be delivered by a mobile device on the move.Most international employers now manage global mobility by providing access to portals where the employer, relocation professional and employee share information and regular updates. There has been a huge growth in such technology and HR software development is in the final throws of joining up the dots to include all aspects of managing an international workforce, including the complexities of assignments and business travel. Expectations are high and systems are expensive.

Investment in technology

The serviced apartment sector is also investing hugely in technology. At the recent Serviced Apartment Summit, a vision of automated service delivery where facial recognition provides access to your apartment or a robot delivering a replacement iron is not far off. As the new Serviced Apartments 2025 innovations in technology report compiled by Travel Intelligence Network (TIN), sponsored by Maxxton, reveals in its ten key takeaways, “Technical innovation is essential to maintain competitive advantage”. But it cautions the sector, “There’s lots of technology out there; make sure you select the tools that add real value to the guest experience and don’t assume all guests have the same needs and tastes – be bold, be different and offer choices.” Its key recommendation, “Invest in purpose-built serviced apartment software.”Technology is already available that allows serviced apartment providers to better understand their guests’ travel needs and consolidate guest and accommodation data into an insightful live dashboard and this is set to get more sophisticated with advances in AI.The report recognises that business travel, assignment and relocation remain the core market for extended-stay products, but what is the serviced apartment sector doing to win the trust of the growing employer market? The corporate employer market, which encompasses booking via HR and global mobility departments, as well as the traditional business travel buyers, offers far better margins for the serviced apartment sector – if they get it right – than bookings via a third party Online Travel Agencies (OTAs) to resell their vacant accommodation.

Accommodation: a crowded marketplace

The serviced apartment sector continues to grow vigorously. Global business travel spending reached $1.4 trillion in 2018 and will expand to $1.7 trillion by 2022 according to the Global Business Travel Association (GBTA).But the serviced apartment market is getting more crowded and well-known brands are consolidating and changing hands and leadership teams. As was expected, the hotel chains are getting better established in the European market, with multiple apart-hotel brands on offer and luxury residences and suites for the top end of the market.As the report points out, the highly sophisticated booking and enquiry technology behind the big global operators such as Oakwood and BridgeStreet, Frasers and The Ascott Limited are making it increasingly difficult for the smaller operators to compete. This is compounded by developers and property-focused entrants to the serviced apartment market often offering no more than a weekly clean and pin-code entry to the apartment.However, the report sees huge opportunities for hospitality-focused providers who can optimise the guest experience. The emphasis is particularly on ‘Generation Globetrotter’ and the Gen Y business traveller market. However, from the employer market perspective, with more senior executives and families reluctant to go on assignment, the emphasis on tailored employee experience and bespoke relocation support to ensure talent is retained points to the importance of serviced apartment providers being able to enhance the guest experience at all levels – particularly in the relocation and assignment context.

A growing need for serviced apartments

In Europe, there has been a reluctance by the financial sector to commit to new Brexit locations in any numbers. However, this summer the European Bank laid it on the line stating, “we are looking for senior leaders and decision-makers to be represented...” Destinations the banks have selected include Amsterdam, Brussels, Dublin, Frankfurt, Madrid, Milan, Luxembourg, and Paris. Indications are that any group moves will be smaller than originally predicted, but there will inevitably be a trickle effect with more financial services following. Other sectors, from pharmaceuticals to the car industry and professional services and research, are making plans and will be potential users of short-term accommodation.Challenges to the sector are the volume of apartments available in the pipeline, locations and an understanding of what it takes to support a smooth transition to a new city for employees on assignment or the first phase of their relocation move, who expect seamless delivery and the personal touch. The serviced apartment providers who can get the guest experience pitch-perfect for these discerning professionals – in volume and possibly with partners and family accompanying – will reap rewards for their innovative approach and understanding of aligning the guest experience with the employee experience. To date, there not been much evidence that the European serviced apartment market is responding quickly enough to satisfy demand, as it catches up with the expertise of the more mature markets of the US, Asia and the UK.

Update from ASAP

James Foice, ASAP CEO outlined the latest Savills/ASAP Sentiment Survey, “Our members are showing ‘significant’ optimism for the coming 12 months, especially since a minor dip in demand from the leisure guest is countered at the moment by growth in the corporate market. Business travel now accounts for more than two-thirds of all stays – which are, themselves, getting longer all the time.“Many of our members are already reacting to this, stepping up their expansion plans worldwide. They say they expect demand will continue to grow from UK guests as the sector becomes more readily- understood as a popular, mainstream accommodation offering, and visits will also increase from across Europe, Asia-Pacific – especially China – and North America.”Foice went on to say, “Our plans at ASAP are now very much clearer following a recent strategy review. We are putting on hold some parts of our previous all-encompassing five-year plan, and focusing instead on the needs of our membership – making sure they’re the accommodation of choice for any travel buyer looking for options that offer the full package. That’s the flexibility of home, the experience of being embedded in the local community wherever you are in the world, and enjoying the professionalism and duty of care you’d expect from any responsible hotel provider.“Out ISAAP Accreditation is evolving and this will be rolled out over the coming year. It will offer a whole range of standards, from the entry-level of ‘Compliance’ – meeting all the legal and Health and Safety requirements of the property’s location – through those reflecting increasing grades of luxury.”Marie Hickey, director in the commercial research team at Savills, comments, “Serviced apartments have long been growing in popularity for corporate travellers, providing them with longer-term staying options and a stronger sense of autonomy than hotels. This return in demand against a backdrop of wider economic uncertainty will further bolster the operator’s existing expansion plans, reflected in the survey.”The demand from corporate guests is pushing up the length of average stay to 39.3 days. This increased to 43 days for those respondents who record more than 50% of their demand from corporate guests. For those with the majority of demand from leisure guests, the average length of stay was 23.8 days.
Front cover of Relocate Ultra

Read the Relocate Serviced Apartments Ultra 

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Making connections

The serviced apartment sector continues to be fast-growing and it must be connected with not only the global mobility specialists to be found in large international organisations, but with HR decision-makers in small and medium-sized organisations responsible for smaller numbers of mobile employees. It could be all too easy for the serviced apartment sector to miss an important part of the corporate employer story if they concentrate all their attention on the business travel need. Which serviced apartment brands will be able to match guest experience with the current employer interest in employee experience to retain top talent now and in the future.

New openings

The latest new openings in serviced apartments around the world

Quest, Liverpool City Centre

This autumn, Quest Liverpool City Centre
 opens, capitalising on the Northern 
Powerhouse project, which will further
 stimulate business travel and support the 
thriving leisure market. Liverpool is a centre
 for pharmaceuticals, health and biomedicine, 
as well as insurance and finance. Quest
is the largest and fastest-growing apartment hotel operator in Australasia, with more than 165 properties located across Australia, New Zealand and Fiji.Paul Constantinou, founder and executive chairman of Quest Apartments Hotels, said, “Our strong franchise model is also one of Ascott’s key drivers of growth. Bringing the Quest franchise to Liverpool is the first step of our international expansion plans.”

Native, Manchester City Centre

Also opening in the autumn is a new aparthotel from Native in Ducie Street, Central Manchester, close to Manchester Piccadilly station and the city’s historic Northern Quarter. This is Native’s biggest development to date, with 166 apartments including eight luxury penthouses with private outdoor terraces.The design by David Archer incorporates elements of the original cotton mill, including wide columns, wrought-iron girders and brick-barrelled ceilings. The apartments offer a taste of industrial chic and are in keeping with Manchester’s lively and confident business, conference, cultural and leisure market mix.

Citadines, Islington London

The Ascott Limited’s fast-growing Citadines brand operates 37 properties in Europe, with four more currently under construction. The latest addition is Citadines Islington London, which has easy access from across London and is close to the world-famous Sadler’s Wells Theatre and the beautiful Regent’s Canal. Housed in a former Royal Mail Sorting Office, which dates back to 1907, the aparthotel features four stylish contemporary apartments, each designed to appeal to the modern business traveller, while drawing on the property’s and Islington’s colourful heritage.

Oakwood, Asia Pacific

One of the longest-established serviced
apartment brands for the employer market,
 Oakwood is expanding into the Asia Pacific
market with two new upcoming launches.
Oakwood Suites Bangkok in Thailand is
scheduled to open by the end of 2019,
located within the popular Phrom Phong
district. While after 12 successful properties in Japan, Oakwood Suites Yokohama marks the brand’s expansion into Japan’s second-largest city opening mid-2020, ahead of the 2020 Tokyo Summer Olympics.“By expanding into Bangkok and Yokohama, we are greatly increasing Oakwood Suites’ footprint and bringing a new type of contemporary luxury to guests and travellers alike in both markets,” said Dean Schreiber, interim CEO of Oakwood and managing director of Oakwood Asia Pacific.

For more information, see our Serviced Apartments pages.

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