Despite the current economic climate with its rather unsure future outlook, it would appear that occupancy levels in the serviced apartment sector in London have held their own during 2012.
There can be no doubt that sales in general – retail, service and leisure – have all been somewhat depressed. However, the fact the serviced apartment sector has held its own in comparison to London hotel room occupancy, which, for one reason or another faltered slightly during the year, indicates the overall strength and appeal of the sector for extended stays.
However, it’s not just anecdotal, claiming that all all is fine and dandy in a sector that hasn’t suffered as badly as others during the past year!
The European Association of Corporate Travel Executives – a non-profit association representing the global business travel industry – in their January 2012 survey reported that 54 per cent of respondents said that their serviced apartment usage had increased, with a further 27 per cent reporting no change and just 5 per cent reporting a decrease.
Meanwhile, in the UK, David Smith, Chairman of the Association of Serviced Apartment Providers (ASAP) recently commented that: “Last year (2011) was one of the most exciting years for our sector in terms of growth, stock and quality. 2012 will be a challenging year as a result of the prevailing economic climate but the serviced apartment industry is in a good position to ride it well by continuing to deliver the best value product in terms of overall cost per stay”.
What is happening, is that more and more executives are now opting for the flexibility and freedom offered by serviced apartments for their home-from-home stay in London. They see the potential to invite people in, have their family there and simply enjoy a rounded flexibility that hotels can’t always match or attain.
And the fact is that a rising demand in London is being driven not just by corporate travellers, but also leisure travellers. The common denominator is the flexible provision of all the comforts of home but without the constraints of often ‘regimented’ hotel living.
And the serviced apartment provides the appeal of a comfortable lounge, spacious bedrooms, quality bathroom and high-quality, fully-fitted kitchen with completely separate eating area – all combined with high levels of privacy and the ability to come and go at will without the obligation of continually having to follow hotel-style rules for meals and key entry.
However, there is one barrier, which, despite the flexibility offered by the serviced apartment in terms of living space, cooking/eating, entertainment and lower costs, and that is the myths – such as long leases – that have to be dispelled and the mindset of the corporate bookers shifted towards the benefits both for them as a corporate institution and their staff on whose behalf they book the accommodation.
This change is not proving an overnight one, as there are decades of entrenched travel habits to overcome and re-educate, the main one being the assumption that if you are away on business, you stay in a hotel. There are still many who have not even heard of the serviced apartment.
Yet it is so easy to see, at a glance, subsequent cost differences between hotels and services apartments – at a basic level, operational costs such as restaurants, three meals a day, room service and even reception and floor-walking staff are all out of the equation, leaving a pot of money, as a one-off cost, that can be put into the living floor space of a serviced apartment.
Therefore, it goes without saying that the cost for a monthly stay (although it must be remembered that stays from over seven days can be accommodated) in an apartment will be much lower than the equivalent stay in a hotel. And extensions can be arranged that don’t have to be negotiated, as the price will be fixed, a challenge the hotel or aparthotel simply can’t meet!
But as we mentioned previously, this flexibility can’t be taken advantage of without a defined extended-stay policy being implemented within the corporates themselves.