Extended-Stay is Here to Stay

We all know by now that serviced apartments offer more space than a hotel room. We also know that rates can be up to 30% cheaper than a comparable hotel. The secret is out - almost. So what is new in the serviced accommodation world? Richard Majewski of agency Accommotel (www.accommotel.com), takes a look beyond the door.

The savvy business traveler has been benefiting from the lower costs and generous proportions of serviced apartment accommodation for over 20 years now and its suitability for relocating executives and graduate trainees has been well-documented. But companies have been cautious to embrace this model and their agents have preferred to remain in the better chartered territory of hotel accommodation. Even within organizations, longer stay accommodation tends to be handled by HR rather than the travel department and thus not included in the corporate travel policy. The domain of the "rogue booker" and few others.

The relentless expansion and consolidation of the large global hotel groups has contributed to restricting the growth of the serviced apartment sector, which has grown, but at a slower rate than the hotel sector. Limitations in the functionality of the Global Distribution Systems (GDSs) such as Amadeus and Sabre which feed the Internet Distribution Systems (IDSs) such as Travelocity and Expedia has meant that accommodation bookers and their agents have paid less attention to the serviced apartment model than it perhaps warranted.

Serviced Apartments do, without doubt, offer many benefits. There is the space - you get a bedroom, lounge and kitchen. And it actually costs up to 30% less than an equivalent standard hotel, because you are usually committing to a longer stay and you have traded public areas such as restaurants for a larger living space.

Indeed, that is the essence of what you get when you stay in an apartment: living space. The quality of your stay will be as close to home as you can hope for. You have space in which to work as well as relax. Housekeeping will not constantly re-arrange your papers and your belongings. You eat and drink what you feel like at a time to suit you. You can work late to prepare for the meeting the next day and not worry about where you will find a restaurant still serving food at midnight. The list of benefits continue: business expenses are so low, they will no longer be questioned; your working environment is better so your work rate is higher. You get more done is a shorter period of time. That means more time to relax so family or friends can visit and stay for no additional charge.

Convincing reasons, I am sure you will agree, why serviced apartments have become so successful over the past decade or two. But if they are really that good, how come the hotel sector is still expanding even faster? And how come anyone is still using a hotel?

One reason is the marketing muscle of the global hotel groups and, conversely, the lack of it in the serviced apartment sector. The old story of a great idea but too few resources to make a difference. Hotels have developed an infrastructure over decades signing marketing agreements with other service providers such as airlines and car rental companies. They operate loyalty schemes, advertise aggressively and enjoy repeat and referral business as a result.

However, times are changing and all of this marketing might is about to be focused on the serviced apartment sector. We have had the independent aparthotel and the all-suite hotel, such as Embassy Suites and the Conrad Chelsea Harbour, in recent years, but what is now different is that now, a number of large hotel groups are announcing their intention to enter the serviced accommodation market with a model referred to in its home US market as Extended Stay. The product is well-designed, consistent, flexible and well-marketed. It also fits in comfortably between the hotel and the longer-let, month-plus accommodation offered in the UK. The model is already well-established in the USA. Hyatt Hotels operate Amerisuites Hawthorn Suites and Summerfield Suites; Starwood's Westin Hotels have recently launched Elements; Intercontinental manage Holiday Inn Express Hotel and Suites and will shortly launch Staybridge in the UK; we have Homewood Suites by Hilton, Residence Inn by Marriott and Suburban Extended Stay Hotels managed by Choice.

These groups have doubtless been attracted by the relatively untapped profits to be made in the serviced accommodation sector. However, there are also other factors - social factors - driving this change.

As individuals, concerned about eating healthy, we have become more particular about our diets. Finding somewhere to eat that will serve us with our usual combination of vitamins and fiber is not easy. Shopping and preparing food ourselves in a serviced apartment is. And on the environmental front, apartments generally require less cleaning - possibly once per week for longer stays - and without restaurants, there is far less wastage.

Yet arguably more important is the responsibility that companies are expected to show towards the welfare of their employees. Corporate Social Responsibility or "CSR" means that it is no longer acceptable for companies to send their executives away on business and expect them to stay for any length of time in the confined space of a hotel room, away from friends and family. And if longer periods away are required, then a reasonable living space must be provided, capable of accommodating visitors. The Extended Stay Hotel is responding to these requirements.

Gradually we will see the fusion of the hotel, extended-stay and serviced apartment markets into a more homogenous accommodation market, where independent properties will survive and thrive, but where standards will be set by the familiar global brands.

Similarly, in the agency world, we will see the specialist hotel booking agents and serviced apartment bookers, developing their services along the lines of new agency, Accommotel, who claim to have responded to developments and established the first Accommodation Booking Company or "ABC".

As new products emerge in existing markets, new regional markets are opening up in Asia, especially India and China, till now dotted with a few deluxe hotels. Currently there is a move to fill the gap and immediate demand for budget and mid-market properties, with Accor being most active in India. But as longer term projects develop, this will once more provide a new market for the extended-stay hotels.

Richard Majewski is Managing Director of Accommotel, based in London, England. Founded in 2007, Accommotel is the first company to offer a worldwide telephone and on-line booking service for both hotels and serviced apartments. Majewski has several years of experience in both accommodation sectors, having previously worked at Sheraton Hotels, HRS, Expotel and The Apartment Service. Accommotel Hotel & Serviced Apartment Reservations extends client benefits to offer a complete and unique business accommodation service, thus providing greater client choice.