Face it, price matters. One of very first things HR needs to consider is the cost involved when selecting a serviced apartment, whether in Singapore or overseas. No longer does HR snap up the first available apartment that comes by. It is a tedious, meticulous process to ensure that expatriates and clients get the best facilities at the most affordable prices. Companies usually have a specific budget set aside for expatriates, often under the term ‘housing benefits for expatriates’. The type of housing depends on several criteria such as the employee’s level in the organisation or if he/she is single or married. Prices vary according to providers. For instance, an 800 square feet ‘standard’ apartment, which comprises two bedrooms, costs S$9,000 a month at Great World Serviced Apartments. At Far East Plaza, a two-bedroom suite costs between S$7,500–8,000.
“The most common feed back we have is on cost and value for money,” shares Julie-anne Ashton, Group HR and Communications manager, Confluence. “When sourcing apartments, we tend to go to a variety of providers,” she continues. Indeed, companies seek the best deal for both themselves and the employee in question.
Location, location
Consider this scenario: a great serviced apartment has been selected for an expatriate. The amenities are excellent and the price is reasonable, too. The only glitch in the picture-perfect story? The estate lies beyond the city, away from where all the ‘business action’ is. This not only contradicts one of the reasons for putting up an expatriate in a serviced apartment; it inconveniences him or her too. As a result, the company will have to fork out extra money for transportation costs because the employee’s residence is located so far from the meeting facility or office. If the serviced apartment provider offers transportation, it would still mean precious time wasted due to travelling. A check on the locations of serviced residences in Singapore, however, revealed that many properties are situated within or around the heart of the city. Serviced apartment providers abroad pitch the strategic locations of their properties as one of the plus points, most often being near business facilities such as convention centres, or within convenient distance of the airport.
Excuse me, are you available?
In addition to cost and location, organisations also need to consider the availability of serviced apartments. Rebecca Quah, HR director, Metrologic Asia names one of her biggest gripes as serviced apartments being fully booked during peak seasons. To add insult to injury, providers also raise their prices to “exorbitant levels,” she says. Quah informs that her organisation just takes the other route when a problem such as this surfaces – they book their employees into hotels.
Addressing the issue of a shortage of serviced apartments, Tonya Khong, general manager, Fraser Suites River Valley, Singapore and Fraser Place Robertson Walk, Singapore, states that Fraser Suites is constantly conducting research to keep up with the latest market trends. “From the start, our sales teams have been making trips to targeted gateway cities in many new markets such as India, China, Southeast Asia, Europe and others to make contact and engage in discussions with potential clients to understand their specific needs,” she reveals.
“Based on our market research, we first prioritise our list of targeted clients and identify those which have the fastest growth potentials for business travel, such as international MNCs and/or regional MNCs. A close watch of the foreign direct investment trends also gives us valuable information for selection of which cities clients are likely to come from. This helps us plan ahead new developments in gateway cities that have the highest need for premium serviced apartments,” she adds.
Oakwood Asia-Pacific has a slightly different approach. Where it does not have its footprint, Oakwood provides services through its referral partner network which spans across North America and Asia-Pacific.
Do providers have what it takes?
Serviced apartment providers do not have it easy, either. It has been reported recently that business travellers prefer serviced apartments to hotels, and the industry has been growing at an alarming rate. More and more organisations are turning to serviced apartment facilities to accommodate expatriate employees. With increased demand come additional requests. “Companies are increasingly looking for serviced apartments that can
provide something more than a bed for their employees,” notes Dinesh Nihalchand, a co-founder of Kush Serviced Apartments. At Kush, for example, Nihalchand and a fellow co-founder Alex Bent ensure that standards and expectations are met, if not exceeded, and all done responsibly and according to the company’s Green Commitment. The recently launched Kush 255 on Des Voeux Road West in Hong Kong prides itself on being a ‘private club in the middle of the city’. The units are furnished with ultimate luxury items like Bose sound systems and polished marble, and designed tastefully to meet clients’ needs.
Frank Foster, vice president, Marketing & Sales, Oakwood Asia-Pacific feels that no clientele is the same and as a result, they have different expectations. “Understanding clients’ needs are critical to determining the types of serviced apartments we recommend and provide at Oakwood. For example, Oakwood Premier targets the needs of senior executives, managing directors and entrepreneurs who are upscale seasoned travellers with mature tastes. Oakwood Residence is suitable for mid- to senior-level executives who will relocate for longer periods and might travel with their family, seeking space and comfort. Finally, for the younger executives seeking contemporary, chic and tech-savvy accommodation we’ve developed Oakwood Apartments,” he informs.
Challenges on and beyond the shores
“Understanding and complying with different sets of corporate rules and regulations from clients’ companies which vary from country to country,” shares Khong, on one of the major challenges that Fraser Suites faces both in Singapore and abroad. Another challenge, in her opinion, is meeting with the budget allocated for the required accommodation in the best possible manner.
“Studying the ground in detail and doing all due diligence before accepting new clients have always been part of our corporate policy,” explains Khong, when asked how Fraser Suites deals with such challenges. She adds that Fraser Suites offers alternative apartment types or property with different rates offerings to meet the client’s specifications.
One recent challenge faced by Oakwood, shares Foster, was the increased demand for quality serviced accommodation in booming economies such as China and India. “Presently, the supply of branded serviced apartments is insufficient across these markets. A growing number of multinationals and entrepreneurs are relocating to these cities to set up and oversee business operations, and it’s this that’s driving the growing demand for serviced apartments in these markets,” he reveals. To cope with the surging demand, Oakwood will be adding up to 2,900 units in China and India by 2010.
Satisfaction guaranteed?
In the bid to remain competitive and ‘in the race’, serviced apartment operators have stepped up the facilities and services on offer, for instance, providing the availability of wired and wireless broadband internet. Almost every serviced apartment provider offers this at no extra cost, simply because the need to communicate and remain mobile has become extremely rampant within the business world.
Another example would be Fraser Suites. Khong notes the growing trend of expatriates arriving with families and hence, Fraser Suites is making it a point to be more pro-family. “We cater to family needs by providing facilities such as an indoor children’s playroom, outdoor recreational facilities such as playground equipment and baby-sitting services,” she states.
Oakwood uses the interior design of its apartments as a case in point. “Oakwood Residences are clean, comfortable and use muted colours, and offer a more spacious feel where possible,” informs Foster.
The final say
While serviced apartment providers race to outdo one another, Quah reveals that she is quite satisfied with the current range of facilities offered by serviced apartment providers. “I think the facilities are pretty adequate and competitive,” she says.
Ashton acknowledges that while HR helps source accommodation for new employees at Confluence, the organisation ultimately leaves it to staff to pick and choose providers at their own discretion.
With the demand for serviced apartments getting hotter as the world becomes increasingly mobile, operators have been keeping tabs on companies’ requirements and catering to them, ultimately leaving HR with a new kind of problem: being spoilt for choice.