For the majority of travel managers, serviced apartments account for less than 10 per cent of their overall accommodation bookings, yet (for longer stays, especially) they can work out to be a more flexible option for travellers and a more cost effective solution for organisations.
There are a number of reasons why the use of serviced apartment accommodation is low compared to hotels. The four most notable are poor supply, poor awareness, poor distribution and a lack of industry standard.
In Europe, London is the most mature serviced apartment market. However, with just 8,000 units in total, equating to 1.2 per thousand travellers (New York has 5.2) it is small in comparison globally. As demand grows, however, openings are becoming more frequent and, in 2012, thanks in part to the Olympic Games, there was a surge of building launches. Expansion continued throughout 2013 and 2014 and is forecast to grow by an additional four per cent by the end of 2015.
Compared to hotels, awareness of serviced apartments continues to be low among travel managers and travellers – both corporate and leisure. Many people don’t know they exist or understand what they are, what they offer and how they differ to hotels. It doesn’t help, either, that they operate under different names throughout the world, such as aparthotels, corporate housing, extended stay residences and suites.
When it comes to distribution, serviced apartments really lag behind that of hotels and are only just starting to appear on the likes of booking.com, however, SACO is notable for making inroads into the GDS, which is progress.
In the UK, ASAP – the Association of Serviced Apartment Providers – is credited with raising awareness of serviced apartments on behalf of its members. In September, it also unveiled plans to promote its QualityAssurance (QA) programme beyond members and direct to customers. The QA programme will finally provide the serviced apartment sector with an official set of standards – similar to the star rating used by hotels – which will help customers to book with confidence and provide a further boost for supplier awareness.
Despite all this, demand for serviced apartments is increasing, and with good reason. They generally offer more space than hotels. According to ASAP, serviced apartments are, on average, 30 per cent bigger than an equivalent standard of hotel room. They are cost-effective, too, as there are no hidden extras and longer stays often qualify for a discount. Featuring fully fitted kitchens and, often, separate lounge areas, they also offer guests increased flexibility to spend their time as they wish.
Serviced apartments may not always be the right solution for every accommodation requirement. But, next time you’re travel programme is up for a rethink, it’s definitely worth bearing them in mind as a valid – and increasingly high quality – alternative for some of your travellers.