Briefing: Illuminating all accommodation options

A new report from Savills found that only 8% of UK consumers can name a serviced apartment or aparthotel brand.

Although alternative accommodation sectors like serviced apartments, vacation rentals, and hostels have been growing, largely thanks to the opportunities online, there is still a lack of awareness of these products compared to hotels.

To rectify this, companies have been investing in marketing campaigns and launching TV adverts.

In these videos, four experts discuss awareness of hospitality products:

Savills’ European Serviced Apartment report states that 41% of UK consumers don’t know what a serviced apartment is and 57% don’t know what an aparthotel is. Awareness of serviced apartments was better among business travellers, although only 52% knew what an aparthotel was.

HostelWorld put out a new TV advert this year, aimed at young travellers looking for an authentic experience and inviting them to ‘meet the word’. This booking site features campsites, self catering accommodation, B&B’s, and budget hotels as well as independent hostels, and currently lists over 27,000 properties in more than 180 countries.

HomeAway, a vacation rentals model based around people renting out their second homes to holiday makers, has put a significant investment into its marketing budget this year. According to HomeAway’s second quarter reports, the company spent $100,887 on sales and marketing in the first half of 2015. This is up by about 25% on the same period in 2014. They have put out a 2 part TV campaign aimed at families.

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

Briefing: The expansion of extended stay

A Special Report by Skift and Homewood Suites by Hilton found that there has been a 42.3% year over year growth in the pipeline for extended-stay properties in the US. Homewood Suites has 325 hotels in the US. Another growing extended-stay brand is Staybridge Suites, which has 101 hotels in the pipeline. With increasing awareness and demand for extended-stay accommodation internationally, there is high potential for growth.

Experts discuss extended-stays in a variety of accommodation types:

The report ‘The Changing Business of Extended-Stay Hotels’ found that the average age of extended-stay travellers is mid-40s. Also the 18-34 year old age group slightly favours extended-stay style accommodation for leisure trips.

The survey found that guests in extended-stay accommodation are more likely to be on business than leisure and that business travellers will stay longer.

Unsurprisingly the survey found that free wi-fi and a complimentary hot breakfast were considered the two most important amenities in an extended-stay hotel by both business and leisure travellers.

The survey found that only 45.4% of travelling Americans had stayed in extended-stay accommodation and 8.6% didn’t know what extended-stay accommodation was, suggesting there is potential for further growth in the market in America.

According to figures from STR, occupancy in extended-stay has been growing over the past few years. In the US, demand for extended-stay was 72.5% in 2012, 73.1% in 2013, and 74.9% in 2014. 125,000 new extended-stay rooms are expected to open in the US by 2018.

In the economy sector, STR data also showed that extended-stay supply growth was 2.6% YTD in May 2015 and ADR showed a 7.9% year on year change.

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

Briefing: The urban planning revolution

Modern developers and investors are thinking about urban space differently. Mixed-use builds are maximising space in cities, and some hospitality companies are doubling up assets in new projects.

In Manchester, proposals have been made for a new “community” on the site of the old ITV studios. This will have 2-3 new hotels, including an event hotel called Manchester Grande. Nearby, Cycas Hospitality is planning to open two IHG hotels, a Crowne Plaza hotel and a Staybridge Suites, in The University of Manchester‘s campus development.

Our experts give their perspectives on new developments:

The St John’s community development in Manchester is being planned by Allied London, who now have control of the former ITV/Granada studios site. They have also proposed plans for a ‘vertical village consisting of 1,200 homes within six interconnected towers.’ This would be built on a separate area of former ITV owned land.

The University of Manchester‘s campus development is a £1billion project. The Crowne Plaza business hotel and the Staybridge Suites extended stay accommodation will adjoin Manchester Business School’s new two-storey Executive Education Centre. The hotels will serve university visitors and business travellers.

These large scale projects reflect the developments in Stratford for the 2012 Olympics, where IHG also placed two asset classes together; Holiday Inn and Staybridge Suites.

Mixed-use projects and new “communities” are being developed across the globe, often in high rise buildings when space is tight. In Dubai a new ‘Cayan Cantara’ development by Cyan Group will have two towers and an adjoining bridge. The project includes branded residences, hotel apartments, shops, and a spa.

These clever developments will continue to offer hotels, serviced apartments, and other asset classes more and more different ways to fit into the changing urban landscape.

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

Briefing: Cost and convenience drive serviced apartment bookings

The latest Global Serviced Apartments Industry Report found that overall the price is the primary factor behind the decision to book a serviced apartment or a hotel.

There are variations in offerings across the serviced apartment/ extended stay/ aparthotel sector, but the main drivers for staying in these properties are clear. The report states that the ability to cook their own meals or entertain (71.6%), privacy (66.6%), and the apartment environment (58.3%) are influencing travellers to use serviced apartments.

In this briefing industry experts discuss serviced apartments and their customers:

GSAIR was put together by The Apartment Service, which states that serviced apartments are cheaper by about 15% – 30% than equivalent standard hotel rooms. This price difference makes it the winning option for many travellers. The report also states that 81.48% of travellers who have stayed in a serviced apartment prefer them to hotels.

According to the association of serviced apartment providers there is on average 30% more space in a serviced apartment, although guests forfeit the restaurants and extra communal areas in a hotel. The space allows people to have visitors and the kitchen facilities allow people to cook their own food, which can both save money and make the apartment feel more homely. This is especially appealing to people who need an extended stay and also to families with children who need the room and the convenience of a more home-like space and the ability to dictate the menu and meal times themselves.

Apartments are also popular with business travellers and are often used by companies in travel policies as a cost efficient option for employees’ business travel. According to Business Travel Insights 2015 nearly 75 percent of travel policies include serviced apartments as an approved option. One in every eight of corporate travel buyers surveyed for the Business Travel Show’s annual survey booked more serviced apartment accommodation in 2014 than 2013.

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

Briefing: Serviced apartment sector is mature and growing

A new report from Travel Intelligence Network (TIN) shows that there has been a 14% growth in the serviced apartment supply chain globally since last year. The report, commissioned by The Apartment Service, found that there are almost 750,000 serviced apartments worldwide. It shows that serviced apartments are increasingly used by businesses for project work. And, like the rest of the hospitality industry, this sector has not gone unaffected by changes in distribution with 75% of operators receiving bookings from OTAs.

As serviced apartments gain prominence in the hospitality industry, four experts discuss the unique benefits and challenges of business and investment in the sector:

According to The Apartment Service: ‘The report highlights that the serviced apartment industry has reached a level of maturity that is showing future growth of supply.’ Deals are being done across the industry. At the end of 2014 there were approximately 1.700 units in the development pipeline in London according to the UK Serviced Apartment Report – Q4 2014 by Savills. There is also strong industry growth in Scotland with RevPAA up 16.2% year on year.

A recent merger between SACO and Oaktree Capital Management, announced on the 2nd March 2015, has resulted in the formation of a £60m hospitality company. The combined company has an inventory of 1645 apartments and is launching a new brand – Beyonder ApartHotels, which will focus on millennial travellers and will open its first ApartHotel in December 2015.

Frasers Hospitality announced the development of a new property in Hamburg recently (20th March 2015) which is the 50th city the company has entered.

Dublin based serviced apartment company StayCity has 1000 apartments across Europe and is due to open properties in Birmingham, Lyon and London in 2015.

And an industry leader BridgeStreet Global Hospitality, which rebranded last year, is going strong with 50,000 apartments in 60 countries and a collection of awards.

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

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