Serviced apartments have found success in combining the traveller requirement for more personal space while satisfying the rules and regulations travel managers have to consider.
A new report from The Apartment Service has found more than 80% of corporates surveyed increased their use of serviced apartments in 2015/16 although this is slowing for 2016/17.
Three travel managers at the recent Serviced Apartment Summit said their increased volume has been driven by an increase in project work and training for new recruits. For Steve Proud, EMEA travel manager at Citi and Kevin Carr, EMEA travel management at UBS the use of serviced apartments is mandated for stays longer than six and five nights respectively. They, as well as PwC's travel service manager Helen Jefferys, have seen spend and annual room night volume in apartments grow significantly in the last year.
Buyer challenges remain the same as 18 months ago which may explain the expected slowdown in growth. There's already a lot of growth in the sector but currently there isn't enough availability in key locations. When making decisions about 'new builds', the market is responding to traveller preferences by increasing aparthotel developments which combine the apartment-style accommodation with the reception and social areas of a hotel that business travellers want.
However, Jefferys says that not enough travellers know about the apartment offering. Both PwC and Citi have serviced apartment specialists in their travel teams and the growth of Airbnb has helped awareness generally but the wider knowledge isn't on the scale that larger hotel chains have.
Although initially you'd think Airbnb is a threat to these providers it could actually do the job in promoting the apartment concept. Many providers see Airbnb as a distribution channel and eventually an online travel agent. Bridgestreet Global Hospitality and YAYS are among the apartment providers with inventory and booking on the site. Access to content is a challenge for buyers but now that Airbnb has TMC deals this could be an easy route for getting the inventory into travel programmes on a platform travellers are familiar with.
If serviced apartment providers continue with a hospitality focused mind-set and find ways for travel managers to get easier access to content and availability then the hotels will have a stronger force to be reckoned with.