The rise of serviced apartments

Serviced apartments are undoubtundoubtedly gaining more traction amongst the expatriate community in Asia.

With increasing foreign investments and more companies expanding to tap into the opportunities in the region, serviced apartment providers are seeing more business travel – both short term and medium to long term – into and within Asia, says Tony Soh, Chief Corporate Officer of The Ascott Limited.

Far East Hospitality’s COO Raphael Saw has also seen a rise in the number of enquiries for serviced residences in Asia, at an average of about 10%. She says that coming out of the 2008 financial crisis, Asian economies have continued to perform well compared to other parts of the world.

“There is a steady growth in Asia and we see constant investments in the region, thus driving a corresponding demand for serviced residences,” says Saw. “As long as the economic outlook for the region remains stable and strong, we anticipate that the demand for accommodation will also continue to grow in tandem.”

“Although the concept of serviced residences was probably more popular in the US and less so in Asia until about six years ago, the industry here as a whole is now experiencing increasingly robust occupancies,” says Jastina Balen, Director of Group Branding & Communications, Frasers Hospitality.

However, the different mix of guests (with corporate being a very high percentage), the longer average length of stay and the fact that reservations are often made by corporate ‘bookers’ or procurement teams all mean that serviced apartments face different operational challenges compared to hotels focused on leisure travellers.

Dollars and sense

While serviced apartments are getting more and more popular as an accommodation option for not just the top Fortune 500 corporate base but also for SMEs and even start-ups in Asia, the cost of living in the region may be rather unwelcoming. For instance, Singapore was recently named by ECA International as the third most expensive country in Asia for expats.

One way serviced apartment providers are coping with the demand is by maintaining price competitiveness. “Pricing will always be moderated by demand and supply. That plus the brand will determine rental costs,” says Balen.

Frasers Hospitality’s strong ties with corporate bookers over the past 13 years have helped cultivate a high level of trust between them. Balen explains: “Just as we try to accommodate their needs and those of their employees, they too have been very understanding of our rates. I do believe that we offer good value, not just in terms of our great locations and facilities, but also our services.”

Although hospitality room rates fluctuate with demand, Ascott offers companies and business travellers greater flexibility and value when they book their serviced apartments. “Companies can accommodate their staff in our serviced apartments for an extended period, without having to commit to long rental leases,” says Soh. “Our serviced apartments also offer significant savings when executives travelling in a group share an apartment, with each individual still having their own bedroom.”

Ascott has a specially-designed loyalty programme for its valued corporate bookers. Called the Link Club, it enables Ascott to keep in touch with corporate bookers and show appreciation for their loyalty through rewards and exciting lifestyle offerings. “Our Link Club currently has some 10,000 members globally and we have seen a strong double-digit increase in bookings coming through this channel,” says Soh.

Ascott’s ‘Best Rate Guarantee’ initiative offers travellers the best available Internet rate when they book through any of Ascott’s websites. Companies can also easily follow the serviced apartment provider on Facebook, Twitter, YouTube and Flickr for updates, latest promotions, insider travel tips and videos or photos of properties. “We currently have more than 20,000 fans across our four Facebook pages, with over 12,000 page views per month,” says Soh.

Outstanding services

Serviced apartments are constantly looking for ways to stand out in terms of the services and facilities they offer to guests. For instance, Far East Hospitality is upgrading two of its properties along the shopping and entertainment district of Orchard Road: Far East Plaza Deluxe Residences and Orchard Parksuites.

“The apartments at Orchard Parksuites have been upgraded with enhanced bathroom fittings, updated furniture configuration and refined carpentry. The lounge at Orchard Parksuites has been refreshed with new upholstery and furniture providing a relaxing dining experience for guests,” says Saw. “We have also included a delectable afternoon tea to provide a more memorable experience.”

Among other enhancements, seven newly-created units of two-bedroom and three-bedroom suites have been added to its collection of 127 apartments at Far East Plaza Residences.

Ascott has also invested $70 million to refurbish 15 properties globally as part of ongoing efforts to enhance guests’ experience. These include six properties in Asia.

To cater to different lifestyle requirements, Ascott ups the ante by offering three brands of serviced apartments – Ascott, Citadines and Somerset. The premier Ascott-branded properties offer top business executives discreet service in an exclusive environment. Citadines provides independent travellers the flexibility to choose the services they require. For guests with children, Somerset-branded properties are ideal as they come with facilities such as playgrounds, indoor playrooms and children’s swimming pools.

“Our serviced apartments come with full facilities and services so that our residents simply ‘plug & play’ without having to worry about the hassles of moving into a new home,” says Soh. “Ascott also helps residents settle in quickly to a new environment through residents’ programmes such as city tours and workshops about the local culture.”

These days, corporate bookers are very savvy says Balen, expecting gold-standard services and facilities similar to that of 5-star hotels within a set cost. “Their criteria have become more stringent as the industry starts to raise the bar,” she says. “For example, the growing trend is to look at recreation facilities. Our gyms across all our 48 properties around the world now open 24/7.”

Frasers’s signature Retreat and Kids Clubs are often big hits with families. For those seeking entertainment, the location of Frasers properties within entertainment locales is always a big draw. For instance, in Singapore the property is right in the middle of the vibrant Robertson Walk area, and in Kuala Lumpur in Malaysia, it is a five-minute walk from Kuala Lumpur Convention Centre (KLCC).

“Meeting needs is important and anticipating evolving needs is something we are constantly thinking about. The Retreat is one such innovation,” says Balen. “iPod docking stations were made available in every room early on. Simmons beds, monthly residents get-togethers and having the same housekeeper each time is another.”

Frasers’s ability to form personal and long-lasting relationships with guests has helped invoke a sense of ‘home’ and ‘security blanket’ in guests’ minds. “The staff at our properties almost become the extended families of our long-stay residents. We have guests who have stayed with us for more than eight years, and even after they have left, they still come and visit the team when they visit the city,” says Balen. “Farewells at our properties are often tearful events.”