Home comforts

Are business travellers tiring of traditional hotel rooms and looking for a home away from home? Dave Waller examines the rise of the serviced apartment

Remember the Temptations song "Papa Was a Rolling Stone"? Wherever he lay his hat was his home. Papa was clearly the freewheeling type - never worked a day in his life, according to the lyrics. But what if he had been on the road for work? Retiring to a different hotel room every night, laying his hat on the corner of the little desk, next to the tiny notepad and pencil, and then routinely banging his bare head on the overhead lamp. It"s hard to make a song out of that. Or a home.

Papa would probably be happy to know that the world of hospitality has moved on in recent years. While a typical hotel room may satisfy some corporate travellers - especially those who take a bizarre pride in being up in time to get a complimentary breakfast - anyone spending several months away on a project, or working away during the week and returning home at weekends, may well prefer something cosier. Hence the knock at the door of the serviced apartment.

Not only are serviced apartments generally bigger than the average hotel room, with more privacy to boot, they normally come fully equipped with wi-fi, iPod docking stations and washer/dryers, together with a fan oven and maybe even a poacher - so people can cook and watch digital TV after a long day of meetings. Plus they often provide separate living and sleeping spaces. While in a hotel you have to dine propped up on the bed if you want some privacy, in a serviced apartment you can live as if you were in your own flat, but with a maid cleaning up once a week. And it"s all as simple to book as a hotel.

“Years ago you"d always be wondering who"d been in a self-catering place before you,” says Jo Redman, Marketing Director at Saco Apartments, which offers serviced apartments in St Helier. “Now you walk in and it"s pristine - incredibly functional, with an element of "gosh, this is amazing".”

Ten to 15 years ago, serviced apartments were something of a back-street option, with uncertainty around how to find them, and whether anyone would be there to greet you with a key if you turned up late. Now the business model has professionalised and evolved - thanks in part to the recession, which found people seeking new ways to make money on their property. It"s a mainstream option now, and with blue chips potentially needing to house staff in a new city for a year at a time, they"re building ever more involved relationships with serviced apartment providers.

“For some of our clients, we"re formally appointed as administrator of their accommodation programme,” says Shaun Hinds, Managing Director of International Operations at BridgeStreet, which brands itself as a global hospitality firm. “They"ve effectively outsourced it to us. They"re looking for specialist reporting, duty of care and governance, and all from a one-stop shop. We"re seeing growth across all areas - in terms of the inventory we bring in, the number of independent providers looking to become partners with us, and more corporates booking more of their people with us.”

Business model

The sector grew 14 per cent last year according to Joshua Ballard, PR Coordinator at SilverDoor, a provider that offers serviced apartments in Guernsey. “Most of our business is in London,” he says, “but we"re seeing growth in demand outside the capital now - for the first time occupancy rates are the same outside London as inside, at 90 per cent.”

The UK Institute of Travel and Meetings has reported that serviced apartment usage is growing in 86 per cent of British companies - 77 per cent of British business travellers now stay in serviced apartments up to five times a year for trips of up to seven nights. Of those who have stayed in a serviced apartment, 79 per cent prefer them to hotels.

But it"s not just the corporates who are booking them. Key to this growth is the internet as a distribution model. Look on booking.com or other travel sites and you"ll see whole sections dedicated to serviced apartments. And while Ballard reports that 95 per cent of SilverDoor"s business is corporate, the leisure traveller is increasingly turning to serviced apartments to meet their needs too - whether that"s young families seeking somewhere to store baby yoghurts and change a nappy, older travellers looking to relax and cook at the end of a long day, or the digital natives of Generation Y going after total immersion in their new environment.

“Consumers are driving change,” says Max Thorne, CEO of CL Serviced Apartments. “It used to be that if you were going to a strange country you"d stay at the Hilton to be sure you could get a cup of tea. Your window to the world was limited back then. Now though, for people like my son, winging it is more fun. These days you just drop onto Streetmap in New York and walk down the road virtually. You know where everything is before you get there. It"s a different buying channel and methodology, and a different experience they"re looking for.”

For evidence, look no further than Airbnb, the online marketplace for everyday people to advertise or find spare rooms [see box opposite]. Since it hit the hospitality industry like a bomb in 2008, it"s now seen either as competition to be overcome (a pretty tough feat by the look of the stats), or a platform to learn from and take advantage of.

“I don"t go to a meeting of industry peers where Airbnb isn"t on the agenda in some way,” says Hinds. “We"re quite positive about it from a distribution perspective, listing some of our inventory on there. We could say "I"m not participating in that" but we"d only miss out on the millions of eyeballs who"ll grow up treating Airbnb as normal, and older models as not. It"s fascinating.”

Of course, hotel providers needn"t fear that the serviced apartment, or Airbnb, will simply take over. It"s more a case of different products addressing different needs. And the internet is there to match punter with provider in a heartbeat. Yet the growth of serviced apartments does mean they"re eating away at hotels" market share, and with a compelling proposition.

If you want to stay in the heart of a city, say London"s West End, then the best hotel will charge top dollar. An apartment of the equivalent star rating will charge a fraction of the price. If you spend £130 on an apartment, you could drop double that on a hotel room of equivalent quality and still only get a room and bathroom.

For this reason, established chains like Marriott are acquiring more inventory in the serviced apartment space. Others have developed aparthotels - a building of separate apartments with the convenience of hotel facilities and a front desk. And if you think such developments are just for London and New York, think again. Porthole Suites runs a block of serviced suites in St Aubin, Jersey.

“We"re an out-of-town location but we do get businesspeople,” says Porthole"s founder, Alexandra Wright. “We"ve had long-term stayers from major firms like Ogier, ABN Amro and State Street. They may want a bit of anonymity, or somewhere to relax without the throbbing kind of vibe in hotels all morning. They want a home from home.”