Hundreds more serviced residences will be built, but how can the product be even more relevant for Asia’s outbound leisure market? Xinyi Liang-Polsena, Mimi Hudoyo, S Puvaneswary, Paige Lee Pei Qi, Rosa Ocampo and Prudence Lui ask operators
Is the product more relevant to you?
CHAN Serviced apartments are gaining more relevance for leisure travellers, especially families travelling together. Not only do they provide a place for families to gather under one roof and enjoy the comforts of a personalised space complete with all the essentials of a home, they are also value for money as the accommodation cost could be shared among family members while dining costs could be contained with the option of self-catering in the kitchenette. Some serviced apartments also have varied and flexible room layouts to suit the practical needs of families.
LAM It depends, because there aren’t many destinations where we can include serviced residences in the FIT package. For instance, in Singapore, a minimum stay of seven days is required, whereas there is no such regulation in Thailand. The mix of room types also plays a pivotal role. For example, we usually opt for a two- to three-bedroom apartment so it’s not relevant if the operator has only studio flats. But given the rising number of new players, this means more choices for our clients.
WANIDA Serviced residences are more relevant for us in Australia and New Zealand because these two countries have a lot of apartment offers, plus they are good for families and groups of friends.
Australia is quite competitive – the three- to 3.5-star apartments there are of good standards, plus there are many apartments in destinations such as the Gold Coast. In New Zealand, self-contained serviced apartments like the Golden Chain Motels are especially popular among those on self-drive holidays.
Travellers like serviced residences only if they are affordable. But serviced residences in Asia are usually in the higher-end segment, hence are typically deemed as more expensive and applicable for business travellers than leisure travellers.
ROYANTO Yes, it is a relevant product for us, but only if the operators provide hotel standards. There is increasing demand from both the leisure and business segment, but it is still in the embryonic stage for the Indonesian market. But the uptrend will continue as leisure travellers want spacious, homely and comfortable accommodation, while business travellers seek space, privacy and modern facilities, complemented by refined hotel services.
Is the line between serviced apartments and hotels blurring? Are apartments better perceived than before?
LAM I don’t see the line blurring (in the Hong Kong market). The perception is mostly the same, i.e. serviced residences’ standards cannot match hotels’ standards. More families are now booking them due to a spacious room with kitchenette.
ANG I disagree. Serviced apartments used to be perceived as cheaper and more suitable for long-term stays than hotels. But some of the new serviced apartments are now comparable to traditional hotels, with better amenities and bigger areas. They also have fewer units, thereby offering a serene environment. All this is making the product attractive to families and friends traveling together.
WANIDA It is still a price factor as Thais, like most Asian travellers, are generally price-conscious, and will consider serviced residences only if prices are competitive. With the growth of LCCs and online bookings, there are plenty of accommodation deals online now and travellers, especially among the younger generation who care more about prices, are now open to different types of accommodation.
SYED RAZIF It depends largely on pricing and the difference between hotel rates and serviced apartment rates. Usually individual travellers and couples prefer to stay in hotels as this works out to be cheaper.
But the take-up rate for serviced apartments also depends largely on the objectives of those travelling. For example, families with children or extended families travelling together may prefer to stay at serviced apartments if their main objective is to be together as a single unit. Or they may have certain food restrictions, such as halal food requirements and choose service apartments because of the kitchennettes. The Muslim market is thus a new clientele for serviced apartments, especially in destinations where it is difficult and/or expensive to get halal food, such as in Eastern Europe. Some Muslim single travellers do not mind paying more for a serviced apartment because of the cooking facilities available.
Five years ago the supply of service apartments was a lot less and consequently demand was low. There was not much awareness about them and the perception was they were only for long-stay travellers, such as those on business. Now, it is possible to book serviced apartments for short stays of one or two nights. This makes it an option for leisure travellers wishing to stay in an environment similar to their homes and for everyone to be together.
CHAN I agree. Traditionally, serviced apartments are commonly perceived as most suitable for business travellers on overseas work assignments who need longer-term accommodation. That said, as serviced apartments continually look to improve their products and services to attract a bigger market, such as offering more competitive short-term and daily rates, enhancing room service menus, having a 24-hour reception, concierge, security services, gyms and even entertainment facilities such as bars, we see a potentially larger market opening up, from corporate clients looking for an optimal and value-for-money accommodation for their employees; to leisure travellers looking for a ‘home away from home’ where they could enjoy the amenities of a bigger and more personalised space, to larger families looking to stay under one roof.
What are the pros and cons of booking serviced apartments versus hotels from a tour operator’s standpoint?
WANIDA Serviced apartments add more choices to the array of accommodation we can offer clients. But due to a smaller room inventory, they tend to have stricter cancellation policies than hotels and also require a minimum stay. This is generally the case for apartments in Europe.
SYED RAZIF Serviced residences are mainly located in cities. Choices are limited in small towns. As the daily rates of serviced apartments are more expensive than their weekly and monthly rates, service apartments are not popular for short-stay visitors. Usually hotels have more rooms than serviced residences.
ANG Many of the lesser-known apartments can only be booked through OTAs.
ROYANTO Many serviced apartments have booking facilities via websites or dedicated portals rather than have a wider distribution system. Hotels use a global distribution system like Pegasus, Abacus, Galileo, Amadeus, Worldspan, etc. They also offer loyalty programmes and marketing partnerships.
What should serviced apartments do to increase bookings from you?
WANIDA Serviced residences must work with inbound tour operators to promote their apartments to Thai outbound travel consultants, who prefer booking from systems such as Gullivers and Gateway (a hotel consolidator). Also, serviced apartments must make themselves more visible on Gullivers and Gateway, and make it easier for travel consultants to include them as a choice for clients. For example, we use Calypso to get wholesale rates, which are secured and placed into the system by Qantas Holidays.
CHAN To attract more leisure travellers looking for shorter-term accommodation, more serviced apartments should recalibrate their pricing policy and make short-term rates as competitive as their longer-term rates.
SYED RAZIF They should offer promotional rates and attractive commissions to tour operators. If they offer net rates to tour operators, these rates should be lower than what the travelling public gets.
LAM They should offer more two or three-bedroom units in their inventory as that’s what our clients look for. The interior design and décor of some of the older properties look unattractive and ordinary.
ROYANTO They need to do some homework. Firstly, most serviced apartments are not very aware of the leisure or business segments that tour operators can generate for them. We can work together better. Secondly, they need to promote themselves more in order to create awareness among customers that they are a viable alternative to hotels.
Are serviced residence developers building the right type of products?
SYED RAZIF Yes, they are building apartments with a family concept and modern facilities you’d find in homes such as TV, Wi-Fi, sofa bed, washing machine, etc. It is also important they are located near public transport and food marts.
WANIDA The apartments are good for FITs or small groups but they are still not quite suitable for bigger or collective groups due to their fewer facilities and services, for example, the lack of porters to assist with luggage or round-the-clock reception to receive guests at the front desk. Serviced residences should therefore consider recruiting more service staff.
ANG I think they are becoming more hotel-like, but offering amenities that are lacking in hotels. Serviced apartments are moving towards the right direction.
ROYANTO Many Indonesians travel with families and sometimes extended families. An apartment nearby a popular theme park or a hospital/medical centre can offer an alternative option.
Additional reporting from Mimi Hudoyo, S Puvaneswary, Paige Lee Pei Qi, Rosa Ocampo and Prudence Lui
This article was first published in TTG Asia, September 26, 2014 issue, on page 14. To read more, please view our digital edition or click here to subscribe
