Serviced Apartments: A Growing Solution for World Wide Extended Stays
A serviced apartment is a type of furnished apartment available for short-term or longterm stays, which provides amenities for daily use. Serviced apartments typically include
“soft” furnishings and cooking utensils so that short term tenants need pack their own.
Serviced apartmetns strive to provide a home-like environment to the business and leisure
traveller.
Serviced apartments include cleaning services in the rate. Most serviced apartments do not
have restaurants or 24-hour reception. Some of the benefits may include more space and
privacy, a convenience when travelling with a family, as well as the savings and personal
satisfaction of cooking one's own meals when preferred.
Serviced apartments represent a business travel lodging sector on the rise.
A Growing Sector:
This is a sector that is growing rapidly as indicated by the 2013-2014 Global Serviced
Apartment Report. This report observes that the demand for Serviced Apartments globally
outstrips the existing supply. For example in a bustling metropolis like London there are 1.2
apartments per 1,000 business visitors. The chart below, courtesy of Oakwood Worldwide,
clearly depicts this trend of increased demand for serviced apartments.
Serviced Apartments: A Growing Solution for World Wide Extended Stays
Further evidence of this growth and its optimistic projection comes from a 2013 survey of the
Association of Serviced Apartment Providers, which revealed that 74% of operators in the
UK and Ireland expected their business to increase during 2013. Of those, 50% expected an
increase of up to 10% while 20% expected an increase of 10%.
STR Global and the Association of Serviced Apartment Providers (ASAP) have reported that
in Q1 of 2014, occupancies in London reached 77.8 per cent showing a 10.2 per cent increase
on Q1 2013 (Source: buyingbusinesstravel.com). According to Joyce Cawthorpe, marketing
executive at ASAP, this reflects an increased demand despite the growth in the number of
serviced apartments.
There is a clear preference of serviced apartments for extended stays as a result of the various
value propositions that they offer.
Advantages of Serviced Apartments:
While there are varied value propositions, this document attempts to summarize some key
values meaningful to business travelers and travel managers/corporate buyers.
Cost Effectivelness:
Serviced Apartments usually offer competitive rates, driven by the duration of stay. The cost
effectiveness of serviced apartments is making them a second home for expatriates, business
executives on the move and even the leisure travelers.
More Space to Live and Work:
Serviced apartments provide a larger living area than a typical hotel room. The traveller can
enjoy more living and working space, inlcuding a kitchen. This allows the guests to relax or
work as they wish without having to fit into a tight space. While this is especially useful for
extended stay travelers, the preference for space isn’t uncommon with short stay travelers.
This is especially useful when people travel with their families for both business and leisure
simultaneously, thereby, embracing the “bleisure principle”.
Feels Like Home:
A serviced apartment is an ideal solution if the stay is for a longer period and if one seeks
more privacy. It is properly furnished with appliances for daily needs including a refrigerator,
washing machine and television set(s). A living area and kitchen to cook your meals makes it
almost like home.
Some Serviced Apartments Offer Hotel-Like Benefits:
Some serviced apartments combine the flexibility of apartment living with the service of
hotels. They offer security and housekeeping services. Some even have a business center,
reception/on-site concierge, gym and swimming pool or at least a subset of these amenities.
Conveniently Located:
Most serviced apartments are in prime locations. This makes it convenient for travel to
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various points of interest, not to mention the worksite. An easy commute is a frequent
preference, especially for longer stays. In addition to commuting concerns, travelers want to
be close to grocery stores, cafes, restaurants etc. Many serviced apartments offer a location
advantage.
While there are clear value offerings Serviced Apartments aren’t without their challenges.
Challenges with Serviced Apartments:
While there are several challenges, five categories are listed here for easy identification.
Visibility/Accessibility:
One of the main challenges is locating a serviced apartment that suits one’s requirements.
Many good quality options may not be asialy found, as they may not be listed in online
portals or other sources such as the GDSs. Moreover, even with apartments being listed in
online portals, they receive mixed responses in terms of a satisfactory experience. A glaring
factor in an unsatisfactory experience is the lack of prompt updates regarding availability.
Reliability of Information:
Sourcing apartment inventory isn’t the only pain point. Reliable information about specific
serviced apartment properties persists as yet another challenge. For example whether or not
laundry is inside the unit or shared is not readily available in several cases. There is also a
lack of standardized quality assessment in this sector, like star ratings in hotels, which is
further cause for concern in assessing quality.
Terms and Conditions:
The terms and conditions of serviced apartments vary greatly from property to property and
from location to location. For example, certain serviced apartment providers charge in terms
of days stayed instead of nights. As most people are used to being charged on a nightly basis
in hotels, daily charges can be a source of confusion. Additionally, the procedure of booking
can be quite tedious and even require signing leases and bulk payment, including deposits for
stays shorter than six months.
Interpreting Check-In and Check-Out Instructions:
Many serviced apartments have a self-check in process where there are no front desk
personnel to assist with the check in. This can be a new experience for first time travelers and
seasoned travelers alike. For example after a long flight even simple instructions sometimes
get overlooked, like pressing a button before entering a code. In some cases these instructions
include a different key pick-up location, which may come as a surprise to the unwary
traveler. With no 24-hour available support, the traveler can find her/himself at a loss of
what to do.
The check-out times in serviced apartments are often more strict than hotels. As many
serviced apartment buildings do not have reception staff or a concierge, the guests may learn
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about the strict check-ou ttime when the cleaning staff knocks on the door. Late check-outs
may cause unexpected and unnecessary surcharges.
Breakdown in Amenities:
If there is breakdown in an amenity such as internet access, it may lead to inconvenience for
the business traveler. In some cases the solution may be as simple as trying another internet
code mentioned in a folder or calling an emergency contact specified either in a folder or in
the check-in instructions. The traveler may, however, not be well-informed and such things
aren't necessarily obvious. In some cases, the solution isn't a simple one. Without the right
support in the event of a breakdown in amenities like internet access, climate control etc., it
can be a bad customer experience.
Booking and engaging serviced apartments can vary widely from basic hotel lodging. This is
elaborated upon below.
Booking & Engagement Process:
Booking:
Many serviced apartments do not have an online presence. Even those that do may not list or
actively update availability online. How does one book a serviced aparment if the data is not
easily accessible? One of the options is to call the serviced apartment directly…if one knows
the contact information. The other option is to work with a Serviced Apartment
specialist/partner, who knows the global serviced apartmetn sector, and who can secure
apartments in your specific markets of need. The latter is suggested as there are many issues
involved in booking serviced apartments:
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The terms and conditions vary from property to property and location to location. For
instance, in certain locations the tax breakdown may vary based on the length(s) of
stay.
Many serviced apartment bookings require immediate and full prepayment and
detailed lease agreements.
Confirmation isn’t instantaneous and a good serviced apartment partner can expedite
the confirmations.
Apartment bookings can entail a lot of e-mail communications with myriad details
and phone follow-up.
The payment procedures and booking procedures may be cumbersome with a lot of
paperwork involved. A good serviced apartment partner can expedite both the search and the
booking process.
Engagement:
Apart from booking there is also an engagement process that merits mention. A trip begins
long before one goes to the airport. This is even more evident when traveling for an extended
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period. Further, the accomodation engagement process goes on even after booking and
checking in.
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The engagement process starts at the planning phase with the search for
accommodations. Without expert support, it can be challenging to find a suitable
extended stay solution.
Locating serviced apartments when no industry standardized accreditation exists,
makes quality a real issue. A good serviced apartment partner would conduct quality
checks and shortlist good options suitable to a particular requirement.
After check-in, issues may arise and be difficult to resolve. A good serviced
apartment partner not only eases the booking process; they assist you throughout the
engagement experience, from sourcing quality apartments to traveler check out and
data reporting.
Conclusion:
Serviced Apartments is a growing sector and there is enough information to suggest
continued global growth. While availability is increasing for serviced apartments, demand in
many locations is increasing a faster rate. This is because serviced apartments offer many
advantages for extended stays. However, there are significant challenges throughout the
engagement process, including sourcing, booking, traveler service/assistance and reporting.
Do the advantages outweigh the challenges? The growth does seem to suggest this. With the
right support from a serviced apartment partner many of these challenges can be mitigated
while maximizing the benefits that serviced apartments have to offer.
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