Briefing: The opportunity and challenge of hospitality alternatives

A report by JLL has found that serviced apartments account for less than 10% of total room inventory in London – and in UK regions account for only 3.9%. This highlights that there is still a lot of opportunity for serviced apartments and other types of alternative accommodation to grow. But are these relatively new products less attractive to investors?

Four hospitality experts discuss the performance of hotel alternatives:

JLL’s report found that there are over 1,500 serviced apartment rooms due to open in London between now and 2019. This shows that the sector is only going to become more mainstream, and with that there will be more evidence on performance for investors.

As discussed in the above videos, some regions across the globe, such as the US, have a bigger alternatives market than others. JLL states that the number of serviced apartment rooms vs hotel rooms in Singapore is higher than in London with 10% of total room supply.

In Europe, the market is still developing. According to JLL, the key serviced apartment operators at the moment are AccorHotels, The Ascott Limited, BridgeStreet Global Hospitality, Frasers Hospitality, and Go Native. They also state that some up and coming operators are Staycity, Zoku and Starwood Capital.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Are alternatives now mainstream?

Osprey Equity Partners recently agreed to fund an £80m development of a GoNative aparthotel in East London. They are backed by LJ Partnership.

Alternative accommodation types like aparthotels and hostels are becoming increasingly attractive to investors. More in-depth data from historic transactions and long established properties in the sector, have given investors greater insight on which to base their decisions. This is slowly bringing more products into the mainstream, as our industry experts discuss in these videos:

A report by WATG released last year showed that one attractive element of aparthotels is the cost effectiveness to build. It states that on a site with an £17.5m acquisition cost, a 4 star hotel would take £28.2m to construct and a 4 star aparthotel only £27.2m. It also states that terminal value on the aparthotel would be £93.1m and only £82.3m on the hotel, where both have an exit yield of 5%.

Another difference between hotels and aparthotels highlighted by WATG is that, in an aparthotel, rooms division accounts for some 93% of revenues, whereas hotels take a large portion of revenue from F&B and other areas.

Finally, WATG’s report showed GOP margins of 63% and 49% for the respective aparthotel and hotel.

When completed the GoNative aparthotel will be a 21 storey property. GoNative will manage the property under a hotel management agreement.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: How competing with Airbnb has impacted hospitality

Airbnb just keeps growing. According to the website it has now had 60 million guests, 2 million listings worldwide, and is used in 34,000 cities. Summer travel with Airbnb has grown 353 times over in 5 years. In summer 2015, nearly 17 million total guests stayed with Airbnb hosts.

Other couch surfing/ hosted accommodation sites include 9flats.com, homestay.com and couchsurfing.com.

What does the growth of this type of accommodation really mean for hospitality and how does the impact vary across sectors? Our experts discuss:

Competing with Airbnb is made more complex by the fact that it offers such a variety of accommodation types. It could compete with everything from a hostel to a luxury hotel. The accommodation on offer includes yurts, RVs, boats and castles. Airbnb appeals to both holiday makers and business travellers so can impact all corners of the market at different levels.

Airbnb is typically most popular in cities. Top destinations for business travel are San Francisco, CA, London, UK and New York City, NY, and Paris, France. At the beginning of this year Airbnb also released some statistic about more surprising destinations that are gaining momentum including Chūō-ku in Osaka, Japan which had 7000% Growth in 2015, Brickfields, Kuala Lumpur, Malaysia, which had 1200% Growth, and Poncey-Highland in Atlanta, GA which had 240% Growth.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Chat Button