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Serviced apartments a growing market in economic downturn

(chinadaily.com.cn)
Updated: 2008-12-12 16:56

And because they normally sign long-term leases - usually three to six months, although often up to a year or more - serviced apartment renters have significant leverage, and can often secure attractive rates.

"The economic situation may have an impact on travel; however, as our residents usually stay for a longer term on projects or relocation, our serviced residences are more resilient to a sudden downturn in travel caused by the economic slowdown," says Gerald Lee, CEO of Ascott Hospitality, a subsidiary of The Ascott Group, the world's largest operator of serviced apartments.

Cost benefit

Serviced apartments also help reduce daily expenses, as frugal travelers can cook their own food, wash their own clothes, and reduce their telephone and Internet charges.

In addition, more than one employee can stay in a serviced apartment. "It gives companies the flexibility to have a group of staff share a serviced apartment instead of putting them up in individual hotel rooms," says Lee.

"The serviced apartment market is going very well," says Naomi Milne, business development manager for SACO, a UK-based company that owns and manages 400 serviced apartment units in the UK, and markets another 12,000 units worldwide.

One of the major advantages is that corporate clients see a cost benefit in staying in serviced apartments. In hotels, historically they have bar bills, very high Internet charges, restaurant bills, and inflated telephone charges, and going to a serviced apartment eliminates quite a few of those costs."

Indeed, short-term visitors tend to stay in hotels, but long-staying guests - those who stay longer than a week - often choose corporate housing.

Reproduced with permission from Knowledge@Wharton, http://knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved.

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