Friday 13 February 2015

GUEST BLOG: Corporate Housing or Serviced Apartments?

Awareness of the benefits of serviced apartments as a spacious accommodation alternative to hotels is increasing, and their suitability for business travel and relocation has been well-documented over the last few years. What is perhaps less obvious is the distinction between serviced apartments and corporate housing.

Both corporate housing and serviced apartments operate under different names throughout the world, which can cause confusion for accommodation bookers. Is there a difference between the two or are they one and the same? Is it just a question of terminology? Which option best suits your business requirements and budget? In such a rapidly changing industry, it’s no surprise that the lines between many accommodation options are becoming more blurred.

When it comes to sourcing long term accommodation or managing relocation for colleagues, each and every client has different needs and expectations. Some prefer the luxury, facilities and flexibility of a serviced apartment for their senior managers, while others prefer a more cost-effective corporate housing solution for multiple project workers. Both options offer fully-furnished properties in central locations with more space and privacy than a hotel, but there are subtle differences between the two.
Our experience of providing a variety of solutions for the corporate market over the last decade has shown us how important it is to match the appropriate type of accommodation to our clients’ requirements.

Here are a few important differences that we have observed between serviced apartments and corporate housing, to help you make an informed choice:

Key differences
Accommodation Features
Serviced apartments are typically part of an existing property portfolio and are furnished to an agreed standard in accordance with the provider’s brand. The benefit of a serviced apartment is both the booker and the guest know exactly what they are getting and can view the property in advance to check it meets their needs.

Corporate housing is sourced specifically for the client and is set up according to their exact requirements. This ability to choose the location, customise the product and ‘cherry pick’ services not only provides comfort and convenience for guests, but it also gives buyers greater control over their business travel budgets. Corporate housing can be made more or less luxurious, according to the client’s requirements.
Duration of Stay
Serviced apartments appeal more to smaller groups of colleagues, families and individuals, as they offer a convenient solution for ad hoc stays. Booking is easy and individuals who are unsure about their ongoing need for accommodation can benefit from flexible cancellation terms and the opportunity to extend.

Corporate housing agreements are more cost-effective for a larger groups and clients who know the duration of their projects, as they can provide a lower cost per head. This type of agreement places the onus on the client to commit over a longer time period, typically between 1 – 5 years, as properties are sourced for their needs only.

Contract Terms
Serviced apartments are usually offered to clients at set rates, which reflect the flexible contract terms and the facilities available. The costs are often higher, but many businesses are prepared to pay more for the flexibility and additional services offered.

Corporate housing has less flexible contract terms and cancellation can incur a high penalty. However, if a client is confident about the length of a project, the lower cost can be attractive.

Serviced apartments can offer savings of up to 30% in comparison to hotels, due to the inclusive rates offered, which cover utilities, Sky TV, Wi-Fi, housekeeping services, 24 hour on call maintenance and more. 

Corporate housing costs as little as one third of the price of a hotel room and can be more affordable than serviced apartments, due to the savings achieved by rotating guests in properties. Stock may be secured for a client for a year or more, however the average length of stay for each guest may be only a few weeks. By giving the client the control over rotating incoming and outgoing guests in each property, room occupancy can be maximised and vacant periods reduced.

Is it mainly a question of risk?
In some ways, yes, or to be more exact, a question of who is taking the risk of cancellation and vacant periods. Clients that need to maintain the flexibility to amend their stays at relatively short notice might prefer the low risk option of serviced apartments. The cost may be higher, but the risk is more on the side of the provider than the client, as they have to bear the cost of vacancy.

Clients that are prepared to commit long term and take the risk of vacancy may benefit more from a corporate housing agreement. By forgoing some flexibility and taking more risk, the cost is lower and rewards can be far greater.

Which option is best for your business?

Example 1
You’re the travel manager of a large multinational company, tasked with relocating a group of project workers from overseas to the UK. You’re looking for 20 two bedroom properties in the same location for a two year project. In this scenario, a corporate housing agreement could be the best option.

Working closely with a provider on a bespoke solution would allow you to secure the exact number of properties you need, strip out some of the more luxurious ‘extras’ and only pay for the essential services and facilities you really want. Everything can be customised, from the type of furniture package and the number of beds in the property, to the check-in arrangements and frequency of housekeeping.

The cost savings that can be achieved by committing to a longer term agreement mean you have more to spend on the specification of the properties. This clever compromise delivers exceptional value and your colleagues can enjoy a comfortable home from home environment, rather than having to endure an impersonal and cramped hotel room for months on end.

Example 2
You’re a PA searching for luxurious, 5-star accommodation for your CEO for a short term stay. Privacy, freedom and plenty of space to work or relax with family is important, as is the opportunity to amend the length of the stay.

A serviced apartment could be a better option, as it would include a personal meet and greet, comprehensive apartment induction, weekly housekeeping services, a welcome pack and a host of additional home comforts, such as Wi-Fi and Sky TV. Both the booker and the guest know exactly what facilities are available and can take advantage of the flexible contract to reduce or extend the length of the stay, as required.

Finding the right fit
Ultimately, both serviced apartments and corporate housing have a number of benefits and sometimes a combination of more than one accommodation option can work well. The most important thing is that providers fully understand their clients’ requirements in order to establish the best fit for the business, the project and the guests.

This blog was written by Charlie Turner, CEO of Executive Serviced Apartments (esa). Charlie and his team will be on stand B173 at the Business Travel Show. Register now at  Executive Serviced Apartments offers a wide range of corporate accommodation solutions and has achieved the ASAP Quality Marque for its high standards.


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