The serviced apartment sector – or long stay accommodation – is starting to make a large impact on the accommodation sector for corporate travel in the UK. In fact serviced apartments are now so popular in certain cities, they’re outperforming hotels. So what’s driving the ‘staying power’ of this more relaxed style of accommodation?
What is long stay accommodation?
Long or extended stay properties typically specialise in accommodation ranging from one week to three months, however, in some cases the length of stay can extend into many months.
They generally include the following types of properties:
Hotels – some hotels are equipped to offer extended stays with suites, studios and/or one and two bedroom apartments. All are fully furnished and include ensuite bathrooms, equipped kitchen or kitchenette, a dedicated work space with internet access and direct phone line, and a lounge/dining area that may also include a sofa bed. Like most hotels, these properties usually have a reception desk and a daily or weekly laundry service.
Serviced apartments – typically found in urban locations, these properties offer larger rooms than hotels – primarily studios as well as one bedroom and in some cases two bedroom apartments. Serviced apartments are fully furnished with ensuite bathrooms, fitted kitchen or kitchenette, lounge/dining area, reception desks, and a daily or weekly cleaning and laundry service.
Executive apartments / corporate housing – these are full-sized residential apartments that are upgraded for stays longer than seven nights (stays tend to be measured by number of weeks rather than days). They are usually secure buildings with one, two or even three bedroom apartments for travellers who have family with them. Executive apartments are fully furnished and generally feature a fitted kitchen, all linen, internal laundry, TV, DVD and stereo, as well as a weekly cleaning service.
Long stay properties are often centrally located in CBD areas close to transport links, entertainment and amenities, and can offer 50+ apartments. Standards can range from budget to deluxe, and the difference between four star and five star products can be as subtle as the frequency of housekeeping. Many of these residences do offer gyms and swimming pools, as well as a weekly service clean with linen change.
Key features that distinguish long stay apartments from hotels include the following:
they do not have all the services of a hotel eg. room service, concierge, reception, restaurant, bar or lounge, however they are more spacious and functional and the level of service is usually high
rates are more stable than those of hotels and in some markets can be up to 30-40% lower than the nightly room rate at a hotel eg. you can often secure a one-bedroom apartment for the same price as a hotel room
long stay reservations are usually more negotiable, often with extras included
bookings are usually invoiced prior to arrival with agreed payment terms, however, payment may not be required until after the check-out date.
In the United Kingdom, VAT levels change from 20% to 4% from the 28th day of stay onwards.
While product and service consistency across different properties has been an issue in some markets, it is improving due to growing demand, supply and competition in this sector.
Who is best suited to long stays?
The biggest demand for this type of accommodation comes from Corporate travellers, with executives, employees and project teams finding it ideal for:
short-term projects or training programs (eg. graduate training)
relocation or long-term projects – can be several months or over a year. If the period extends beyond a few months, the employee may require temporary accommodation in a serviced apartment until they secure a property to rent.
Travellers who are on long-term projects and accompanied by their partner and/or children find two and three bedroom long stay apartments far more suitable than hotels, particularly for the additional space and the in-room amenities they provide.
Growth in demand
The concept of long stay accommodation has been around for more than 50 years. Today these properties are located worldwide and in some markets, are outperforming hotels in terms of revenue available per room.
The US continues to offer the highest number of long stay rooms, while markets such as the UK, Australia, India and Hong Kong have seen a surge in popularity and demand over recent years. The United Kingdom now has around 1,000 long stay properties, while Hong Kong’s booming expatriate rental market has seen occupancy levels as high as 98%. Operators in many markets are not only experiencing record occupancy levels, but longer average lengths of stay. The majority are forecasting increased competition and continued growth in the years to come.
Regional and multinational companies are key drivers of demand and in the European region, Saco Apartments are seeing the professional services, IT and infrastructure sectors as the biggest users of long stay accommodation.
Andrea Zalom, Global Account Executive for Marriott International, says extended stay demand continues to rise as do occupancy rates.
“Demand is forecast to grow throughout 2013 and beyond. Developers and owners view extended stay hotels as profitable due to high occupancy, so the hotels are popular to build. Over the next few years, product will evolve to meet the needs of the Gen Y traveler. There will also be a focus on improving suite design to provide more natural light, separation of spaces, better access to technology and improved comfort,” she said.
Benefits to travellers and employers
Long stay properties offer business travellers a flexible accommodation solution with wide range of advantages – the most popular being:
comfort and convenience, with additional space and flexibility to enjoy a more ‘normal’ lifestyle during evenings and weekends, particularly for families
the ability to feel more at home as a whole, with features such as fully equipped kitchens, laundries, work/study areas, and storage for their clothes
being able to ‘eat in’, with more travellers preferring to cook themselves rather than eat out every night
price – with far more competitive rates than those of hotels, less surcharges and more flexibility in cancellation policies
having the room and the amenities to entertain friends and family
no leases to sign and all utilities bills paid.
All maintenance issues dealt with
For employers, long stay properties offer more comfortable accommodation (and satisfaction!) for their staff and a more cost effective solution for the business. More of these properties can also now be booked within a company’s travel policy, providing further long-term savings and efficiencies.
According to the Apartment Service Global Report 2012, companies can achieve cost savings of 15-30% across accommodation, meals, laundry bills and internet connections. Savings can be further extended if two members of staff from the same company share a two-bedroom/two-bathroom apartment. The added benefit for companies is that they have more relaxed and productive staff.
Key players and what they offer
Recognising the successful formula of the long stay product, a growing number of hotel chains are either acquiring or developing their own brands, or offering long stay service elements themselves. In addition to big names such as Marriott and Hilton now operating in this space, there has also been significant growth in mid-tier and smaller long-stay chains.
Andrea Zalom says their long stay hotels are designed to help keep businesses travellers feeling energised throughout their stays of five or more nights. “Travellers enjoy a more casual atmosphere and are likely to be known by the hotel staff depending on their length of stay,” she says. “Our long term stay hotels generally feature spacious suites with a full kitchen and separate spaces to eat, relax, work and sleep. Most offer complimentary breakfast and high-speed internet, while some also offer an evening social hour.”
Jo Redman, Marketing Director for SACO The Serviced Apartment Company says they are one of the UK’s leading providers of serviced apartments, with an extensive network of SACO-operated apartments and partner properties in cities around the world.
“Our business was born because our founder loved the benefits of apartment living for business and leisure travel, as well as the value, choice and flexibility that simply isn’t available in traditional hotels.
We’ve been championing serviced apartments as a better way to stay away for 16 years, and now businesses of all sizes come to SACO for our consistency, knowledge, experience, and outstanding customer service.”
Serviced Apartments Worldwide
Singapore-based Serviced Apartments Worldwide (SAW) says it gains corporate business from most countries. Maria Rios, Head of Reservations for Mansley Travel Apartments (representing SAW in Europe/Africa), says the corporate sector is the market they have been growing over the past year. “We cannot see this trend changing with the rise in popularity of apartments and serviced apartments,” she said.
SAW offers accommodation in 40 countries and 200 cities for temporary assignments, relocation, business travel and expat placement. The group has 700 serviced properties in its portfolio, ranging from small properties with just 12 apartments to large properties with up to 300 apartments.
Window to a world of long stay options
FCm Travel Solutions offers corporate clients access to a wide selection of long stay accommodation suppliers worldwide.