Serviced apartments are a fast-growing industry, largely due to employees needing long-term accommodation for corporate assignment work, and the popularity of Airbnb. The home-from-home experience is appealing to more business travellers than ever.
Serviced apartments is one of the fastest-growing segments of the global lodging industry. Availability has increased by 23.7% in just two years; twelve months ago there were an estimated 1,022,984 serviced apartment units worldwide. [Source: Global Serviced Apartment Industry Report 2018/19]
They are popping up in more and more places too. More than 13,000 towns and cities now have serviced apartments compared with 10,777 in 2016.
This growth is due in part to investors being attracted by the potential high yields; the explosion in corporate assignment working which sees key workers needing long-term accommodation away from home, and Airbnb which has raised consumer awareness of alternatives to traditional hotels.
As the sector has grown, so too has the number of products described as ‘serviced apartments’. From aparthotels (effectively self-catering hotel rooms), to serviced residences and corporate housing (private flats or houses on short term leases), serviced apartments can come in all shapes sizes – although the concept remains the same. For example, the Bridgestreet Stow-Away property in London’s Waterloo consists of 20 prefabricated modular micro-apartments.
What are serviced apartments?
A serviced apartment is effectively a fully-furnished apartment with hotel-style facilities such as a 24 hour concierge, housekeeping, laundry and so on. Usually more spacious than the average hotel room, good WiFi and a well-equipped kitchen or kitchenette combine to create a ‘home away from home’ experience for the occupant.
Business travellers like serviced apartments because of the extra space and the freedom to cook, entertain or eat out rather than trudge reluctantly to an over-priced and uninspiring hotel dining room.
A wide choice of serviced apartments
Serviced apartments increasingly offer communal spaces to enable residents to work and meet on-site. BridgeStreet’s Stüdyo brand offers rooms fitted with the essentials and shared common spaces (including kitchen). Ascott’s lyf (pronounced ‘life’) properties are managed by millennials acting as community managers, city and food guides, bar keepers and problem solvers. Vision Apartments’ Livinghotel concept combines in-room kitchens with access to large public spaces with a shared kitchen where tenants can eat together.
Marriott’s Element extended-stay brand is piloting an alternative communal living space that allows up to four guest rooms to share a large common space. The area serves as mini lobby of its own, enabling larger group meetings or providing a private space for families and friends traveling together.
For something a little more luxurious the Dolphin Square apartments offer a relaxed setting away from the hustle and bustle from London, yet minutes away from the city for ease of access. It’s a contemporary option with lots of space, whether you choose the studio apartment or the one or two bed apartment. For the traveller who is after exclusive onsite facilities, they can take advantage of their very own comprehensively equipped fitness club or their Moroccan Spa.
Premium provisions for the business traveller
The amenities in serviced apartments are often a step-up from hotels, and another reason business travellers prefer them. Connectivity is critically important to business travellers, and therefore a given for apartment operators. Other examples of enhanced amenities available in some serviced apartments include state-of-the-art lighting and home entertainment systems.
As the sector has matured, leading apartment brands have become better known amongst business travellers and have addressed user concerns over inconsistent standards by adopting the Association of Serviced Apartment Providers (ASAP)’s accreditation scheme which sets standards around the quality of products and services.
Business benefits of serviced apartments
It’s not only business travellers who prefer serviced apartments. Travel managers have embraced them too.
After crossing the Atlantic thirty years ago, the serviced apartment concept has really caught on in Europe over the last decade. Over half of corporates now book serviced apartments for business travel, with 40% of travel managers spending up to 20% of their accommodation budgets on extended stay products. [Source: Ibid]
As more serviced apartments appear on preferred programmes, especially for stays of five nights or more, travel managers are increasingly looking to their TMCs to source serviced apartments, thereby helping to drive adoption by making them easier for business travellers to book.
Travel managers also like serviced apartments because they are often cheaper than hotels, and the total trip cost is lower because there are less hotel overheads costed into the rate. An overnight stay of four nights in a serviced apartment can cost up to 40% less than the same stay in a 3-star hotel, with similar facilities, more space and a better environment.
Although cost is a key driver, guest experience is regarded by most travel managers as being of equal importance. After all, a happy business traveller is a productive one. Serviced apartments also fulfil employers’ duty of care obligations because they offer more privacy and better personal security than many hotels.
Once a business traveller has stayed in a serviced apartment, they usually want to return – and travel managers know that. 77.3% say that traveller/assignee choice is key in deciding whether to stay in a hotel or a serviced apartment for stays of three or more nights. [Source: Ibid]
As business travel has evolved to include more global assignments and extended stays, the needs of business travellers have evolved too. Serviced apartments will continue to thrive and be an integral accommodation solution as travellers seek more space, amenities and a home-like environment.