The serviced apartment sector is going from strength to strength, offering a comfortable and flexible option for long-stay visitors. Indeed, they have proved so popular that the large hotel groups have started to introduce their own extended stay offerings, says Catherine Chetwynd
Although extended stay hotels have been in the UK since the opening of Marriott Executive Apartments (MEA) in Docklands in 2004, the opening of InterContinental Hotels Group's (IHG) Staybridge Suites in Liverpool in June this year raised the profile of the sector considerably. It is the group's first extended stay property outside the US (it was followed shortly by Cairo) and provides an alternative to serviced apartments for business travellers on project work or relocation.
According to a report by PricewaterhouseCoopers (PwC), Extended stay hotels: a US model whose time has come in the UK? (2007): "Compared to almost 240,000 rooms in the extended stay hotel sector in the US alone, the branded UK sector comprises mainly serviced apartments and residences and accounts for around 3,400 rooms." The study goes on to point out that secondments are increasingly common between the operations of global corporates within Europe and other parts of the world, and firms such as PwC are seeing more people on client work travelling within the UK for two weeks to six months at a time. The enlargement of the EU is another influential factor.
Extended stay hotels provide accommodation in self-catering suites, but they do not generally offer the ancillary services such as bars, restaurants and porterage available in full service hotels. Serviced apartments range from budget to deluxe and levels of service tend to be more limited than in an extended stay hotel. In addition to the greater freedom all types of long-stay accommodation offer, there is also a tax break: after 28 days, VAT drops from 17.5 to 3.5 per cent.
In the US, all the major hotel groups are represented in the extended stay sector, which has segmented into budget, mid market and luxury, giving an indication of the greater maturity of the market and a suggestion of what may come to the UK. Meanwhile, Marriott has 16 Marriott Executive Apartments, its upmarket brand, in 13 countries outside the US, with 15 more planned. With the exception of Jakarta, they are co-located with a Marriott hotel or have one nearby, which gives extended stay guests access to a greater range of hotel services.
According to recent research undertaken by Marriott, extended stay business travellers are largely senior executives who travel extensively, often on long-term assignments, and 68 per cent consider themselves to be expats. They tend to be male (84 per cent), middle-aged (47 years old), married (73 per cent), travelling with spouses (53 per cent) and in finance and banking, government, technology, manufacturing, construction, telecom, and oiland gas sectors.
This group's three top survival strategies were fixing food they liked in their own kitchen, meeting locals and socialising with other travellers.
IHG did a lot of research around its introduction of Staybridge Suites to the UK and consulted 1,000 extended stay travellers, recognising it could not just transplant the US version to the UK. "The expectation of the typical European and certainly British hotel guest was that the design and feel had to be more upscale here," says vice president of Staybridge Suites Europe, Middle East and Africa John Wagner.
The Liverpool property is typical, with 130 rooms, 24-hour reception, hub kitchen, free breakfast, public seating area, evening receptions hosted by the general manager and free Wifi throughout. Tax breaks apart, in extended stay properties and serviced apartments, the longer guests stay, the less they pay. "We have two businessmen who travel here from Glasgow and go home at weekends, but it is cheaper for them not to check out," says general manager Wayne Adroliakos. "They can choose an apartment or suite and keep it." Further Staybridge Suites open in Abu Dhabi, Kuwait, Newcastle, Birmingham NEC and London City West in 2009.
Starwood opened its first Element in Lexington, Massachusetts this year but its European ventures will, like Staybridge's, also look different. "It has done quite well in the States but we are having to look at the way we spec it: the average size of a room in the US is 42m2 but that is not big enough here," says senior vice president and director of operations for north west Europe Michael Wale. Element is "a child of Westin" as Wale puts it and, to that end, there will be a strong emphasis on all things eco friendly.
Accor has 23 Suitehotels, a three-star, midmarket brand, in Europe, mainly in France, Germany and Austria. "The UK is under review," says Accor marketing director, UK and Ireland, Roger Smith. "We know that we have long-stay business guests who would certainly think in terms of a Suitehotel. Our main tariffs are for four and seven days."
As the PwC report points out, the serviced apartment sector is already well established in the UK and although a new kid on the block is often regarded as a threat, the main protagonists largely welcome Staybridge Suites' arrival because it raises the profile of the sector. Agencies such as Select Apartments and The Apartment Service (TAS) go one step farther. "We work with Staybridge Suites in Liverpool and look forward to adding new locations as they roll out," says marketing director of Select Apartments Adrian England.
In some areas Staybridge will be a direct competitor, according to vice president, sales and marketing, EMEA for BridgeStreet Worldwide Jo Layton. "They offer similar accommodation to some of the blocks that are operating as serviced apartments, so they will compete fully for the five-to-30 night stays," she says.
Typical is Grand Plaza Apartments in Bayswater, which has a minimum stay of seven nights. Accommodation ranges from studio to three-bedroom and facilities include satellite TV, dishwasher and broadband internet access.
Ascott Group comprises Citadines, Somerset and Ascott apartments, in ascending order of quality, and these are present in the UK and, variously, in Belgium, France, Germany, Spain, Bahrain, Qatar and Dubai; 2009 openings include properties in Edinburgh and in Asia. "The tightening of belts will increase demand for all three of the brands in Ascott's portfolio," says regional general manager UK for Ascott Group Rebecca Hollants van Loocke. And sales and marketing director for SACO, Jo Redman, agrees, seeing a potential need for serviced apartment accommodation for contractors, where companies need to replace permanent employees who have been laid off during the downturn.
The budget contender in the sector is Base2stay, which provides comfortable, well appointed accommodation at affordable prices. Currently with one property in Earl's Court, but with two more on the cards, the company aims to provide the essentials of a hotel stay without unnecessary extras.
"Our premise is to deliver service with no hotel mark-up, so a full-sized can of Coke costs 80p from the vending machine and prices quoted include VAT," says chief executive Robert Nadler. "And by April next year, all internet connectivity will be free."
With more than 1,200 apartments in the UK and in excess of 10,000 worldwide, BridgeStreet is still planning to expand considerably next year. It will open in Liverpool and Budapest and will add another 1,246 units in Dubai from May to December. This year saw the addition of apartments in Jersey and Bristol, with London's Hatton Garden to follow.
Cheval Group owns and operates six properties in the capital. Hyde Park Gate, next to the Albert Hall, has just emerged from a comprehensive refurbishment and Calico House follows in December. Gloucester Park recently changed its welcome hampers to include British goods only and at Phoenix House, incumbent French restaurant Le Cercle this year launched a Gourmet Grazing menu of tasting-sized dishes for apartment guests.
As the name suggests, City Apartments has accommodation exclusively within London's Square Mile. The company has added 30 apartments in the past 12 months and hopes to expand by a further 20 per cent in the next 12, as well as planning to improve wireless internet speeds (free access) and expand CCTV to all buildings. "We continue to enhance our welcome packs, most recently with new pasta sauce and salads and better wines," says director David Smith. "And all our apartments now have a full Sky package at no extra charge."
Also exclusively in London, Clarendon has upwards of 200 apartments across the capital from Richmond (south west) to Canary Wharf, and is working on distribution channels and new ways of bringing its product to market, to allow easy, fast and effective service for clients.
And the former Dolphin Square hotel in London's Pimlico has been converted into Dolphin House, comprising 148 top-end serviced apartments with 24-hour reception and daily maid service. Wifi internet access in the room is charged but is free in the public lounge. Guests wanting a night out on the premises can mingle with Dolphin Square residents in the newly renovated bar and grill; and access to the Sports and Fitness Club facilities is free.
Frasers Hospitality has announced aggressive expansion plans, with a view to adding some 5,000 serviced apartments over the next two years, much of this growth in China, India and Vietnam. It is to open a property with 73 apartments in Edinburgh in 2009 and, hot off the press, the company is to add two London properties to its portfolio, one in Blackfriars and one in Monument.
Birmingham-based LMM added 21 apartments in the past year, bringing its stock to 67, and also retired 24 to improve the quality of its portfolio. "We have refurbished all our existing apartments and upgraded facilities to include satellite TV, LCD screens, Hifi and complimentary high-speed Wifi," says CEO Giles Horwitch-Smith.
In addition, a bistro opens next to the company's flagship property Burne Jones House in Birmingham. Apart from giving guests a nearby option for eating, it will provide room service for breakfast, lunch and dinner.
And Oakwood, more heavily represented in the US and Far East than Europe, took on two new locations in London in the past year.
SACO provides an international service with 11,000 apartments in 35 countries. It launched buildings in London's Canary Wharf in May and is adding further accommodation in Covent Garden and High Holborn this autumn. It has also taken on apartments in two buildings in Reading. An interesting development from SACO is the opening in London in August of the first retail travel agency dedicated to serviced accommodation.
Yousif Al-Adhami, who works for an international consultancy, plus two colleagues, were working on a project in Birmingham recently and stayed in SACO serviced apartments for six months. "Usually, I use the Hyatt or Marriott in Birmingham and it was the first time I had stayed in apartments. It was excellent," he says. "The only downside was that there was no gym but SACO had a deal with a facility two minutes away.
I had to ask my client whether they would be prepared to part with the big chunk of spend necessary for the apartment stay, plus the additional gym cost, although wireless internet access was embedded in the apartment cost, which it wouldn't have been in a hotel. We costed it carefully and it beat using a hotel." Yousif Al-Adhami said he would certainly use a rented apartment again for a stay of more than two or three weeks, provided it was centrally located.
With more than 10,000 apartments in 600 buildings worldwide, Select Apartments is also an international player, although as marketing director Adrian England points out: "It is not so much about number crunching but the brass-tacks reality of delivering reliable options for clients.
"In the last 12 months, there has been a trend towards entry into the market of former buy-to-let landlords, who see serviced apartments as a potentially lucrative exit strategy for some of the over-development caused by the property boom. We work only with providers where the customer-service ethos matches ours," he says.
BridgeStreet Worldwide's Jo Layton also puts the emphasis on service standards. "Any agency can set up a website and fill it with inventory, but our management fully understands the need to manage the health, safety and overall experience of the traveller and to give assurance to bookers and global buyers," she says.
The Apartment Service represents more than 10,000 apartments in 407 properties in the UK and upwards of 46,000 apartments worldwide. Says managing director Charles McCrow: "These numbers will grow by another 200,000 apartments as we add chains such as Residence Inns, Staybridge Suites and Summerfield Suites later this year."
TAS expanded Executive Roomspace (one month's stay or more) into Europe with the opening of offices in Lisbon last year and is re-designing its website with real-time booking capability for extended stay accommodation. In addition, it is sponsoring the publication of the first Global Serviced Apartment Industry Report, compiled by the Travel Intelligence Network.
Newcomer Staying Cool expanded its portfolio in Manchester with the addition of 15 new apartments at the Rotunda in Birmingham in April. Bristol, Newcastle and Glasgow will follow over the next three years.
"Instead of a 24-hour reception, we are available 24 hours by phone - we are never more than 10 minutes away; and we supply a pay-as-you-go mobile rather than having a telephone in every room, though most people use their own," says co-founder of Staying Cool Tracey Stephenson. Décor in all the company's buildings is design led. "We want to do away with corporate bland," she says.
With the increased presence of extended stay hotels in Europe and the Middle East, not only will business travellers have an alternative to serviced apartments, but competition should ensure that standards remain high.
Base2stay, london
Base2stay'sproperty is in an attractive square just behind London's Earl's Court Road, an otherwise more earthy area. Entry is gained via the doorbell or room card and reception staff are thoroughly engaged with both the check-in process and the guest. The attitude is relaxed but attentive. Although it provides limited service accommodation - there is no restaurant, bar or room service - there is no cutting back on quality in other areas.
My room on the first floor had a desk with internet access and a kitchenette behind what appeared to be a wardrobe door, with sink, kettle, fridge and microwave.
The bed was comfortable, the bathroom spacious (with a shower over the bath) and the towels were excellent quality. There is no extraneous stuff in the bathroom, where combined shower gel/shampoo and soap are supplied. Rooms are cleaned daily and waste cleared, and bed linen is changed every third day.
The directory on the desk is comprehensive and usefully, gives clear instructions with diagrams (an example to be followed) for the heating/air conditioning control panel and microwave, plus a raft of useful local addresses and telephone numbers. The directory is also available via the TV, as are free internet access and wake-up call.
Base2stay does what it says on the tin - and with some sense of style.
www.base2stay.com
Staybridge Suites, Liverpool
Judgingahotel on the official opening day could either be the acid test or possibly not altogether fair - but my stay at Staybridge Suites Liverpool went smoothly and although check-in took longer than expected, it was executed with charm and apologies.
My single room comprised a comfortable double bed, sofa, large flatscreen TV with wireless keyboard and well equipped galley kitchen, although the choice of stove-top rather than electric kettle seemed to nod more to design than practicality. A workstation multi-tasks as a dining table and marks the boundary between kitchen and sitting area. There is free Wifi throughout. Water pressure is reasonable in the shower and shower gel, shampoo and conditioner are supplied.
In the public spaces, guests walk through the sitting area to reach the hub kitchen/dining room, which makes it feel rather non-residential but there is also a more intimate sitting room/snug with TV. This was an accident of design, but has been such as success, it will be built into the layout of subsequent Staybridges. The general manager's reception was indeed a sociable occasion, with guests talking around the buffet, and the food was well thought out and prepared and the wine enjoyable. Breakfast is also good and, crucially, Marmite is provided.
This property fulfils its promise. For guests staying long-term in Liverpool, Staybridge Suites allows the right levels of independence backed by attentive service.
www.staybridgesuites.com
STELLAR PERFORMANCE AND ENVIRONMENTAL ACCREDITATION
HAVING LAUNCHED a star rating system and quality standard for serviced apartments in April 2007, VisitBritain and the Association of Serviced Apartment Providers (ASAP) recently met to evaluate the system one year on. "The purpose was to reflect on whether what we had learned should be included in the new standard as it evolves," says director of City Apartments and member of ASAP David Smith. "The impact will be to raise the bar for four- and five-star apartments, so it will be less easy to become a fivestar apartment."
Since the rating was originally based on the combined quality standards of hotels and self-catering accommodation, it did not thoroughly reflect the fact that 95 per cent of serviced apartment customers are business users and many details less relevant to a B2B market will now be taken out. "We still have to look at the quality issues - what the expectation is at each level, whether it is representative and, if necessary, to tighten it up - but we're unlikely to do anything until next year," says quality manager for VisitBritain Alison Barham.
Even given the need to tailor the system better to the sector, there should be the immediate benefi t of giving customers confidence in what they are buying. As the industry expands to embrace aparthotels, extended stay properties and other contenders, it will be even more important to have quality controls customers understand.
That does, however, depend on buyers' priorities and according to head of marketing and market development for Clarendon Peter Morgan: "Corporate buyers still consider price and location to be the critical factors that infl uence the decision to purchase. Much more work is required if the rating system is to have any long-term impact on how businesses purchase serviced apartments."
But as Richard Majewski, who runs booking agency Accommotel, points out: "The rating system also acts as an incentive to properties to maintain high standards." Some operators are also considering their environmental credentials.
Says Base2stay's Robert Nadler: "We are looking at a number of gradings for environmental sustainability and are accredited by Hospitable Climate." SACO also expects to see demand from clients for environmental measures and has signed up for Green Tourism Business Scheme.
FREE GLOBAL SURVEY
The findings of a major survey among 20,000 bookers, TMCs and apartment operators are due to be published this month. The Global Serviced Apartments Industry Report, compiled by Travel Intelligence Network on behalf of The Apartment Service, highlights the major operators, explains the different types of property that can be defined as serviced apartments, examines how apartment operators run their inventories and focuses on how the sector has come to meet the needs of the corporate market. Copies of the report can be downloaded for free at www.apartmentservice.com