A defining year: Serviced Apartment Summit 2014

More than 280 people attended the Serviced Apartment Summit in what was an eagerly anticipated conference on the sector. Following a tour of luxury extended stay developments in London on day one, a coctail reception at Grosvenor House Apartments by Jumeirah Living set the scene for the conference proper.

With representation from a variety of industry stakeholders, topics at the event, which took place at London’s Montcalm hotel in Marble Arch on 9 July, ranged from defining the sector to franchising. The ‘bleisure’ market was a key topic of conversation at the Summit, which examined how serviced apartments can turn their business clients into leisure guests. HVS also reported that demand for serviced apartments is growing faster than new supply in many European markets, as an increasingly mobile workforce drives business travel and relocation activity.
 
First up was keynote speaker Tom Mercer, founder of MOMA Foods, who outlined how he started in train stations with mobile stalls selling oat shakes and building up MOMA. Hungry travellers scooped up his signature bircher muesli, porridge (with golden syrup sachet) and smooth oatie shake. His “Vote for OATS!” campaign and video was hilarious especially when Nick Clegg of the Lib Dems featured and looked bewildered when presented with a pot of porridge.
 
In an effort to define the sector, Arlett Oehmichen, director at HVS London, presented a summary of the HVS comprehensive study on “European Serviced Apartment Sector – Growing Up”.  Since there is no official classification in UK this think tank initiative was formed between leading stakeholders, and driven by Serviced Apartment News and HVS, to define the sector.  “Serviced Apt/Extended Stay” is the new term combining different underlying business models. Criteria is based on product and service levels, ownership model and planning. Several brands have already signed up and a group picture of the signatories to the agreement ended the session.
 
STR Global was represented by Thomas Emanuel (director of business development) who presented a performance overview of the sector in Europe. STR launched a UK review in 2014 in 200 serviced apartment locations comprising 8673 units. Occupancy percentage change YTD (May 2014) was +5.1% in Europe, and there is far more industry recognition, said Emanuel. In the UK, Tuesday, Wednesday and Saturday are the busiest nights of the week. ADR peaks £151 at weekends with  operators looking to take more leisure at weekend. The UK serviced apartment pipeline is 42,000 rooms, with more than 18,000 rooms under contract in London. 
 
Several breakout sessions included: Branding in the Extended Stay Sector, Understanding the Corporate Buyer, and The Franchise Option. All provided lively debate and some strongly opposing opinions, which is always good to see.
 
In a session “Meet the owners/investors” (moderated by Miles Auger, director, CBRE hotels), Andrew Fowler, director at Union Hanover Securities noted that in places like Aberdeen and Edinburgh the sweet spot number of units in a development is about 120, compared with 180 in London.
 
“Around the world in 60 Minutes” was chaired by Piers Brown and featured Paul Constantinou, chairman of Quest Serviced Apartments (Australia); Mark Skinner, partner, The Highland Group (US); Filippo Sona, Colliers (MENA); Jo Layton, MD Commercial sales, The Apartment Service Europe; and Malcom Himes, GM Oakwood Jakarta (Asia). The key message was that fragmentation was a problem 10 years ago and it still is; the industry needs to come together, Himes noted that middle-class Asian families frequently have one nanny per child, gardner, driver etc – so attention to detail is critical.
 
“Meet the Leaders” was chaired by the effervescent Russell Kett who grilled his panel. Sean Worker (CEO, BridgeStreet Global Hospitality) was first to be barbecued with Kett asking: “What keeps the panel awake at night?” Worker noted that with OTAs you control your own destiny while Guus Bakker, COO Frasers Hospitality EMEA, said OTAs are definitely keeping him awake with five, six and even seven per cent of his margins being eaten away. Frederique Raveau of The Ascott Ltd is seeking to acquire properties and her hot issue is how to grow efficiently and quickly. Tom Walsh, CEO of Staycity, with 1800 keys, suggested a ways to control the OTA’s influence is to offer early check-in on your own website.
 
The final session “A piece of the pie: the potential of the serviced apartment sector” was moderated by Chris Bown, deputy editor of Hotel Analyst, and saw hotel chains, developers, serviced apartment operators and investment funds explain how they expect the sector to develop over the next few years and what are the main challenges. Panellists included Diane Mayer, VP and global brand manager, Residence Inn (by Marriott) who spoke eloquently about extended stay suites, noting that most large hotel chains have an extended stay brand and they elicit high customer satisfaction. She also noted that when a property is de-flagged (leaves a brand) the datapoint shows a drop of 20 to 25 per cent in RevPAR.
 
Piers Brown closed a hugely enjoyable day summing up new innovations, the increased level of sector deals transacting and thanking delegates for nearly doubling the attendance on the 2013 conference.

www.servicedapartmentsummitcom