Mapping trends in the serviced apartments sector

In an increasingly digital age, employees’ expectations of overseas assignments have changed. Assignees want to be involved from the start in deciding where they will live and what facilities will be available.

The Four Seasons Residences 10 Trinity Square
For many, 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 of boutique 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.“Well known and trusted global hotel brands are incorporating the serviced apartment model in their own offering, giving the sector greater credibility,” he says. “Real estate and property investors are becoming more interested in the sector, because of the higher ROI of apartment models when compared to traditional hotels.”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 explains.

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 real estate advisor, estimates that the number of purpose-built serviced apartments across Europe will expand by over 50 per cent 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 per cent on average over the next five years reaching $1.6 trillion in 2020. 
Related articles from the Relocate website:For related news and features, visit our Serviced Apartments section.

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.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.PwC predict that by 2020 there will be a 50 per cent increase in overseas assignments undertaken. Its data shows that assignee levels have increased by 25 per cent over the last 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 estimates that there are in excess of 1,022,984 apartments worldwide – an increase of 23.7 per cent in the past 18 months and that the global sector has doubled in size over the last eight years.

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.”ReloQuest provides an independent online platform to global mobility clients and individuals in need of sourcing temporary housing, service apartments, and hotels, worldwide.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 staying somewhere other than a hotel.“In recent years, the serviced apartment sector has grown more than any other temporary accommodation class in Europe,” says Darin Karp. “A new trend which 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.”Joyce Cawthorpe, marketing and media manager of, the Association of Serviced Apartment Providers (ASAP), says that in the UK the sector is showing strong growth, with 2,000 new units this year in the UK in spite of Brexit.
Related articles from the Summer 2018 issue of Relocate Magazine

For business travel and HR departments, apartments provide security and a way to control costs.“You pay for the apartment and not per person,” she 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,” she added.From September 1, the 189 members of ASAP in 19 countries will be accredited under a new Quality Accredited Programme. 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 too exists and is genuine, safe and fit for purpose.Stephen Hanton of SACO agrees that this security element is important. “Airbnb has shown leisure travellers that apartments have more space, are comfortable and a more interesting place to stay than a hotel room,” he says. “It has stimulated demand and widened the appeal of apartments and shaken up the industry forever.”Yet while its popularity continues to increase for leisure stays, many corporates would not consider it as an option for relocating employees due to quality and security issues.

The rise of luxury

SACO’s new Locke aparthotel brand, along with Wilde Apartments by Staycity, Citadines by The Ascott Limited and Supercity’s rebranding of its aparthotels, have brought a fresh, modern image to the concept of apartment stays.Steven Thorne, an independent consultant with wide experience in hospitality, serviced apartments, relocation management and property letting and management says there is a crossover between hotels and serviced apartments at both ends of the market.“There has been a growth in service-lite aparthotel options focusing on smaller units with fewer amenities and less service,” he says. “This has been driven by the apartment operators targeting the revenue opportunities of the shorter-stay and hotel market.”At the same time, hotel operators are entering the apartment market at the top end, providing more full-serviced serviced apartments but at a level that only true and experienced hotel operators can deliver,” he says.Four Seasons Residences at Ten Trinity Square, London, for whom he is a consultant, offers ten serviced apartments with open-plan living areas, dining rooms, fully equipped kitchens and up to four bedrooms. Boasting the largest serviced apartments in the City of London, they are at the very top end of luxury, combining more space than a hotel suite. The apartments also come with the option for 24-hour service and access to all the hotel’s facilities including a gym, restaurants and club.

The Four Seasons Residences at Ten Trinity square

The luxury apartments include views overlooking the Tower of London and Tower Bridge from their private terraces, with interiors featuring London’s top designers, including Martin Kemp Design, LINLEY, Richmond International and Fox Linton. No 41 (pictured above) 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 worries over Brexit.
Steven Thorne points out that 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.

Demand for social and communal spaces

At the other end of the market, aparthotel rooms are becoming more compact, but communal space is increasing.“It is a hotel development trend which is influencing the new breed of aparthotels and giving developers another reason to maximise the floorplate of developments by reducing the size of individual aparthotel rooms,” says Mr Thorne.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.“Serviced apartments operators appear now to be less interested in offering the extended stay guest a large apartment and instead providing a more proactive mix of short and extended stay business,” he says.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global 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. 

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