The conference, hosted by Hotel Analyst magazine, was held at the Jumeirah Carlton Tower in London.
Billed as a conference for “investors, operators and advisers with an interest in the new accommodation types that rival hotels”, the event featured representatives from sectors including hostels, vacation rental, budget hotels, the private rented sector (PRS) and serviced apartments.
The serviced accommodation session was moderated by Chris Bown of Hotel Analyst, with panellists John Wagner of Cycas Capital, Russell Kett of HVS, Tom Wals of Staycity and Jason Wischhoff of Accor.
The panel was titled: “Serviced apartments: are they extended-stay, branded residences, corporate housing or aparthotels? How does the blend of residential real estate and hotel work in reality? How does the profile of long-let accommodation differ from short-stay offers?”
Russell Kett got the ball rolling by giving a brief introduction to the sector, its variety and the challenges it faces, including that of definitions. Speaking of the various kinds of accommodation on offer, he said: “There is a rough divide between properties that behave more like hotels and those that behave more like residential apartments.”
John Wagner spoke of the potential for the sector in Europe. “In the US the extended stay and serviced apartment sector makes up 10 per cent of the lodging industry. It’s obviously nowhere like that level here but it does have potential to grow significantly.”
“There is significant demand for extended stay in the UK but it isn’t always recognised and it is hard to find. You have the ‘project guys’, the multinational and corporate guys, relocation clients and so on. At present they are staying in hotels, B&Bs and residential rentals,” he added.
Tom Walsh echoed Wagner’s optimism, saying that his company -which has an average guest stay of 4.5 nights, is meeting demand in European cities and is expanding significantly. Staycity will have around 2,000 keys by 2016, and 5,000 by 2018/9 he said.
Wagner then stressed the key differences between successfully selling and operating an extended stay product when compared with a regular hotel. He said: “There is no greater recipe for disaster than to take a hotel person and drop them in an extended stay property. It’s a different mindset. You have to treat your customers differently. Our customers are treated more as temporary residents than hotel guests. A hotel is a marketed product, extended stay is a sold product.”
He added that the Staybridge Suites properties, which Cycas operates, have a target of 60 per cent of guests staying for longer than a week.
On this subject, Kett said that “there is a temptation to fill too many units with short-stay guests, prompted by the fear factor involved in having long-stay rooms available”.
A theme that united the panellists was the difficulty in gaining accurate performance data for the sector, which will help to give it credibility as well as helping secure investment. Tom Walsh said: “We use hotels as a benchmark when preparing metrics and data for potential investors. Accruing data is hard work and you have to open up your books to attract investors.”
Wagner added that “the tide has turned with investors. You no longer get the glazed look when you mention serviced apartments to them.”
Jett called for operators to co-operate and supply more data for the benefit of the sector: “Reliable data will be the key to attracting investment. STR Global need more support from operators to give them information. It has to be fixed, rather than flexible inventory,” he said.
There was a brief threat to the general spirit of accord when Kett said: “There is potential for a hybrid model – independent hoteliers could convert several floors of a poorly performing hotel to extended stay.”
This prompted Wagner to respond: “I couldn’t disagree more because the extended stay room will only ever be sold as an upgrade. It would need a separate sales team and a separate operating team.”
A “violent agreement” between Wagner and Kett then broke out when Kett concurred that the extended stay element would need to be a completely separate business.
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