Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
Serviced apartment firm Bridgestreet recently published a survey into people’s preferences when it comes to living and working remotely, a term they have coined as the ‘Digital Nomad’ lifestyle.
The study, which polled more than 30,000 people, found 65 per cent think they would clock more hours working as a digital nomad.
To discuss the findings and other trends in the serviced apartment industry, BBT spoke to Bridgestreet CEO Sean Worker...
What were the key findings for you to come out of the report?
I thought it was interesting that 40 per cent of people wanted more flexibility and it’s the flexibility that’s driving the travel policy. It was also interesting to see 75 per cent of travellers want to embark on a digital nomad experience so in other words I’ll get my work done just let me do it where I want to do it with the technology that allows me to do it.
So do you think it is important travel policies reflect this increasing trend of flexible working?
You just need to look at the increasing popularity of products like Airbnb and Onefinestay or serviced apartments, they're evolving because the traditional hotel model is actually confining, so if the traveller has a choice and it fits within the travel policy then they are going to do something different rather than be stuck in a hotel room trying to do their work.
There is clearly data now suggesting there could be a correlation between the freedom a company gives to the level of productivity it receives from the worker.
So is the traditional hotel/accommodation model outdated?
I don't think it's outdated, I think it's not so much about the hotel sector I think it's the focus on the travel manager to really listen to their traveller.
Employees are telling buyers there is a value to them for having choice, maybe it's a hotel maybe it's a serviced apartment, maybe it's Airbnb or equivalent form of shared economy product but there's a definite movement to freedom.
What are your views on the shared economy and do you welcome the competition?
I think I look to other industries and types of businesses that are facing the same thing. So are drones going to put aerial photography out of business? Is Uber going to put taxis out of business? Did Amazon put multiple market places out of business - no actually Amazon brought companies together and gave them a platform to individuals to sell their products.
When there is some form of new product brought to the marketplace, there’s always the normal hard reaction, but you need to accept it’s here to stay... I would argue that statistically we have seen little or no impact to the more traditional accommodation models. Most of the global hotel brands are experiencing record profits, share prices are up and we not seeing compression in demand or leakage.
I know from our perspective it has been beneficial to bring attention to the space, both positive and negative.
The sharing economy model is all consumer driven - It was the consumer that wanted it, the consumer will be the one that makes the decision. So I think it’s only going to grow.
Is the digital nomad lifestyle Bridgestreet describes driven more by younger travellers?
I would argue if you're an 18 year old business traveller or a 58 year old business traveller then both still want the freedom to stay where they want. [As an older traveller] I don’t want an environment where I'm woken up by the housekeeper when it's ready for them to clean the room that's disruptive. I don’t want to have to formally get dressed to have breakfast. I want to be in excellent locations and getting a local experience and still complying with policy. Both ages are working off IPhones and Ipads so I don’t think there’s any correlation in flexible working and just millennial travellers.
Is it difficult to get the message across that serviced apartments aren't just a model for long stays?
Our occupancies across our entire portfolio are running in the 90 per cent range and it’s predominantly a B2B business, so I would say buyers get it pretty well.
Branding: Do you think a serviced apartment brand could have a strong enough presence like some hotel chains such as Hilton or Marriott?
You have to look at it in different categories - In an ApartHotel it's hard to believe that because unless there's scale by a number of brands you are not going to be able to get consumer recognition, as this took 30-40 years in the hotel sector, mainly because you've got to convert them, you've got to build them and then design them differently.
Then there are the categories of serviced apartments and the sharing economy and for brand recognition to work across these there has to be an increase in consumer confidence.
With the serviced apartment market growing and visitor numbers continually rising, how do you ensure you keep ahead of the competition?
It would appear from consumer awareness that we are nowhere near reaching maturity in the industry not even close so the addressable market is vast. Question is for a lot of brands how do you stay relevant and ahead of what the consumer will view as a worthy product to buy and I think that's unfolding.
It's inevitable that there will be some consolidation and so there's going to be pressure. As you know there are low barriers to entry in this sector at the front end... someone could start a serviced apartment business with 5 apartments but there are immense barriers to entry at the high end.
I think it's going to be very hard for those companies in the middle. It can be difficult to lend against a serviced apartment in the mid-tier distribution - having enough distribution capability, having enough linked distribution. It could be challenging.
There has been significant growth in certain areas such as the Middle East, what markets are Bridgestreet concentrating on?
We are very customer-led. We have years of data and can analyse long range trends so we are not a flashy object company and we are very structured about what markets we go into.
Dubai and The Middle East is a rapid build market and it is very location-specific so we tend to follow mature customers to a specific location as opposed to us picking a location and adding supply and hoping to add demand so it's quite measured.
Sean Worker is president and CEO of BridgeStreet Global Hospitality, responsible for the overall strategic and operational direction of the company, and for overseeing the company’s development, finance, sales, marketing and legal activities including support for over 500 Brand Ambassadors. Sean joined BridgeStreet in 2009.