Serviced apartments – embracing change

The coming year will be a time of expansion and self-analysis for the serviced apartments sector as it seeks to respond to the evolving needs of corporate clients and individual guests.

Serviced apartments - embracing change

Source: Room 2 by Lamington - Hammersmith

The serviced apartments industry looks set for a busy 2017. A number of openings are scheduled in the first three months, with more to follow, according to the Association of Serviced Apartment Providers (ASAP).Not surprisingly, the majority of the new UK developments are in the major cities of London, Manchester and Edinburgh.In London, openings at a number of well-known locations have been confirmed. Marlin’s new aparthotel at Waterloo will offer 238 new apartments, while Go Native’s 75-unit development in nearby Bear Gardens, on the South Bank, will offer 75.London’s Covent Garden will see the first of Staycity Aparthotels’ new deluxe brand, planned for premium citycentre locations, with 106 apartments, and Grange Hotels is to open an all-suite hotel overlooking the Tower of London and Tower Bridge.Apartment complexes are opening across Manchester throughout 2017, perhaps in response to the city’s thriving digital hub. Scheduled to open in April, Staycity’s second property there will be located close to Piccadilly station. It will include 182 apartments.A new complex of 237 one- and two bedroomed apartments from City Suites is set to open in Manchester in February, and Cycas Hospitality has released plans for 116 units at Staybridge Suites Manchester, on Oxford Road, at an as-yet unconfirmed date.Edinburgh will be another popular location as SACO continues to roll out its new Locke aparthotel brand, with the launch of 72 units in Q1 and further openings to be announced in early 2017. October will see the opening of 50 new luxury apartments in Lateral City’s Grand Central redevelopment.

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As part of the £150 million New Waverley development, Apple Apartments is on track to open a 21-unit aparthotel near Ediburgh’s Royal Mile in late 2017. It will have 24-hour butler service, a customer lounge and an in-house restaurant.Elsewhere in the UK, Staycity will open 202 apartments in Liverpool, and various smaller towns and cities are also welcoming serviced apartment openings.In Q1, City Stay will open a new aparthotel at Platinum House, in Milton Keynes, featuring 58 units. Lamington Serviced apartments will open a 71-room hotel in Southampton with a focus on communal working and living.

European openings

A number of openings are planned for locations across Europe throughout the year.Staycity looks set for a busy spring, with bookings being taken for its new apartments in Marseille for dates from the beginning of March onwards. A new purpose-built 144-unit development in France’s capital of gastronomy, Lyon, is due to open in the summer.BridgeStreet Global Hospitality will open Mode Paris, a collection of 47 new units within a five-minute walk of the Arc de Triomphe. Facilities will include a breakfast room, a guest lounge and a fitness suite.Frasers Hospitality has a strong focus on Germany, with two new openings planned. March will see the launch of 145 new apartments in Berlin under the Capri by Fraser brand. In May 2018, 154 apartments by Fraser Suites will open in Hamburg.The launch of Premier Suites’ new aparthotel in Rotterdam, with 104 suites plus a residents’ gym, an executive meeting room and a café, is scheduled for the spring.

International growth

Global serviced apartment provider The Ascott Limited has announced that it is on track to double its portfolio from 40,000 units to 80,000 units by 2020.During 2016, the company has added more than 10,000 units across 51 properties, expanding its current portfolio to 52,000 units, of which 90 per cent are located in gateway cities across Asia Pacific and the Middle East.In November, Ascott unveiled its newest brand, Lyf (pronounced ‘life’), which is designed for, and managed by, Millennials who want to experience locations as the locals do. The company aims to have 10,000 units under the Lyf brand by 2020. Sites in the UK, France, Germany, Australia, Malaysia, Indonesia, Japan, Singapore and Thailand are being considered.In London, Ascott operates nearly 1,000 units across seven properties. It is targeting 10,000 units in Europe by 2020.Frasers Hospitality is poised to meet its global target of 30,000 units by 2019 (a 30 per cent increase in its portfolio), following a number of openings in 21 new cities, including Tokyo, Penang, Riyadh and Abuja.Oakwood Worldwide is moving forward with plans to triple the number of its branded properties by 2020.

Economic insights

There were plenty of experts sharing their knowledge at the ASAP conference in December.BBC financial journalist Sally Bundock shared economic insights from 2016 and flagged up things that might impact the serviced apartment market in 2017. Describing 2016 as “the most surreal and surprising time” of her career, she gave an overview of how the year had unfolded, from concerns about China, toxic debt and turbulence to low commodity prices and, in particular, the low oil price, which, in November had rallied and spiked as a result of November’s OPEC meeting.The big event of the year was obviously the Brexit vote, which sent financial markets into a tailspin. Sally Bundock described what it was like to be on the receiving end as part of the BBC’s flagship coverage with David Dimbleby.The next big surprise was the Donald Trump victory. On that occasion, Ms Bundock had a more relaxed time, working with Jeremy Vine in a virtual-reality studio with special effects.After each of these two huge shocks, it only took a matter of weeks for markets to recover and edge higher and higher. Actually, Sally Bundock explained, it had turned out to be a good year to invest.This was due to, among other things, the tourism boost, with people, including stay-at-home Brits, making the most of the UK while exchange rates were favourable. The car industry had had a good year, and the feel was not the same as after the global crisis.Sally Bundock also reflected that 2016 had been the deadliest year for refugees, with 4,000 of those who fled war and persecution having died in the attempt.Looking ahead to 2017, the Donald Trump presidency would have an impact on markets. Already, there were overtures regarding the Asia trade deal, and a deal with Europe could be on the way out.However, this could bring opportunities for the serviced apartment sector with the US looking to trade with the UK and the added advantage of good currency rates. The picture regarding emerging markets would require close scrutiny, and political risk was high for 2017, she predicted, with so many elections coming up in Europe.Company bosses have made their plans A, B and C, and will continually revise them. The surge in infrastructure activity in the UK should be good news. Transport projects, including airports, and injections of cash into science and digital are all going ahead. For this nimble sector, change means movement and with a breadth of offering for both business travellers and those working on projects or on short-term assignments, the environment could be good for business. Increased competition from the big hotel brands, likely interest rate rises and the impact of the exchange rate will also colour the picture.Advice sessions throughout the day were geared to preparing delegates for dealing with the unknown and a potentially choppy path from getting up to speed with digital marketing to the impact of Brexit and a high-level session on brand as a game changer.

Know your audience

Keynote speaker Nigel Risner, renowned for his energy and humour, drove challenged delegates to think differently and stand out from the competition.His powerful message – to think about the audience you are engaging with, whether they are corporate clients or the end-user serviced apartment guest – is relevant to every sector. Simplifying the Myers-Briggs personality types, his references to monkeys, lions, dolphins and elephants made a memorable point about the importance of communicating in the right way. There will be many useful takeaways in Mr Risner’s book, It’s a Zoo Around Here.The future looks bright for this growing sector which will also be good for companies relocating employees and managing business travel. We explore further in the Spring issue and on the website.

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