Challenges in the Serviced Apartment Sector
Serviced apartments are, without a doubt, on the rise.
The Global Serviced Apartments Industry Report 2016/17 details this growth and discusses whether past and present challenges have helped or hindered the progress.
Serviced apartments source a lot of business from corporate stays. In recent years, the corporate hospitality sector has experienced some significant changes to the way it works.
Millennials have become the dominating consumer and Duty of Care has been prioritised by mobility managers due to new legislations within the UK. Recent economic adversities and corporate cost cutting has forced business travellers to look for more cost effective methods of accommodation.
These factors are some of the reasons that serviced apartments have become so attractive to investors, operators, and business and leisure customers.
As mentioned previously despite the growth in serviced apartments supply it is not yet meeting the influx in demand. However, The Apartment Service believe that companies like Hilton who are extending their portfolio into the extended stay market could lead to an over-supply in some areas, effectively reversing the current supply and demand situation.
Understandably the growth of Airbnb and other ‘hobbyists’ has affected the serviced apartment sector. While it may be raising the visibility of non-traditional accommodation providers for business travel it represents a ’fragmented aspect of the serviced apartment product’.
Ultimately, this highlights inconsistencies and issues that Quality Assurance programmes like ASAP are trying to overcome. Thus, distorting what customers should expect from serviced apartments providers. Furthermore, it has the potential to make the term ‘serviced apartments’ a generic name for hotel alternatives again diluting the quality service that accredited serviced apartments offer.
Clearly, serviced apartments that offer accredited service need to ensure that their generic product stands out from the rest and is as accessible as their competitors (if not more).
Another potential hurdle for serviced apartments is how technology is used within the sector. Customers are now accustomed to fast and efficient booking systems and it is something that isn’t always readily available with all serviced apartment providers.
At A Space in the City we pride ourselves on ensuring that the customers experience is a smooth as possible. As a result, we put a lot of time and effort in perfecting our booking system, online and off.
Our recently implemented price assurance tool demonstrates this. We want to reassure our guests that they are getting the best possible online rate and subsequently improve their online booking experience.