GH: I’ve got a very special guest with me today, a gentleman that I’ve been getting to know for the last year, that’s Piers Brown, the CEO of International Hospitality Media; they’re based over in London, they publish Boutique Hotel News and Serviced Apartment News and I’ve got to know him through his awesome events he puts on – the Serviced Apartment Summit here in the Americas. We hung out with Serviced Apartment ‘Recharge’, and I’ve been meaning to have him on the show, so we had to put him on through Skype because God forbid we actually had to do this in person, so, Piers Brown, how are you Sir?
PB: I’m good, Glenn, and thanks for having me.
GH: Thanks for having time away from your busy, busy schedule, flying all over the world to your events and putting out great publications just to talk with me, so I think the natural place to start is, you know, tell us what you’re about, your company; I find it interesting that you have the whole boutique (hotel) side of the business and then the serviced apartment side of the business where you’re doing events and a magazine as well. So, how did you get involved in both of these sectors of our great industry?
PB: Well, we focus on growth areas within hospitality and we like the granularity of the Boutique & Lifestyle hotel sector and of course, you know the serviced apartment and extended stay space, both are growing ‘gangbusters’ – growth on the boutique side , you’ve got lots of lifestyle brands launching, serviced apartments and obviously the extended stay very much the same, in fact you could argue there’s a ‘blurring’ occurring across the two.
GH: Yeah, that’s a fascinating idea, because you know that when I think of serviced apartments originally, I would think of the very staid, very formulaic type of the thing. But, they are definitely becoming more ’boutiquey’ in feeling and example: I had a great opportunity to stay at one operated by Bridge Street in London recently when I was at the Business Travel Show and I loved how it kind of mixed classic ‘British look’ on the outside but was very modern and ’boutiquey’ on the inside, so I totally get where you’re coming from.
PB: Yes, sure, sure……
GH: So, all right, so Piers, we were just, as this show was coming out, and the show was being released on April 20th, on April 9th and 10th we were at the Serviced Apartment Summit Americas, I’m sorry guys I just wanted to run this a week prior but it was difficult for us to get together, plus I had to do that 100th episode. You know, Piers, I thought the event was pretty eye opening to me that I think the best place for us to start is – you brought me in for us to work together on what I thought was one of the most rewarding projects that I’ve worked on all year and that would be:- filming a ‘man on the street’ video to talk to the average Joe and Jane about what they knew or didn’t know about the serviced apartment industry, and the results, while not surprising, were also pretty darned surprising. What did you think of the video and the findings within it and generally a bit about what we found in that video?
PB: I really enjoyed it first off, speaking to New Yorkers and of course guests, hospitality guests, the lack of awareness was outstanding, people were saying “what’s a serviced apartment, what’s corporate housing?” you had AirBnB mentioned a lot, but the good thing was there was lots of enthusiasm. When we explained what the accommodation type was, boy did they buy into it!
GH: Yes, they sure did and let me tell you, for all you hoteliers out there, you must watch this video, you can find it on Serviced Apartment News and I have a weblink to it and I’ll put a link to the video show as well. To me what was most shocking and surprising was for mostly the hotelier audience here is how focused every single person was on AirBnB, how they seemed to be weighing AirBnB opportunities equally if not more so, than traditional hotel stays – they’re not looking at it that they want to be loyal to a particular brand, they’re just interested in value and price.
PB: Sure, another thing that came across Glenn, was ‘choice’, in my view they value choice and weren’t very brand loyal. We asked them to name some hotel brands, and there was only really say six or seven, no extended stay brands were mentioned at all! You had one maybe one serviced apartment which was Ascott out of all the interviews we did.
GH: Yes, Ascott’s definitely not a household name. I was surprised that one gentleman mentioned it. What was surprising to me was that there could be two, three, four hundred of extended stay hotel brands but when asked about it, consumers still didn’t seem to know what they were. How do you see all of this in the big picture of things? I thought it was surprising in the sense that they didn’t know it but it was kind of exciting in the sense that I think there’s so much opportunity for serviced apartment providers and extended stay hotels to leverage in the future.
PB: Yes, I thought it was interesting at the conference of course you had Booking.com and AirBnB. Booking.com you know they’re all about giving people choice, I think they categorise the accommodation type based on apartments so they are so getting there. I do wonder whether it’s in the interests of Booking.com to be ‘super specific’with accommodation type because at the end of the day the commissions, etc, are all the same. So, we had somebody in the conference say, “someone turned up at my serviced apartment, saying, it wasn’t exactly what they wanted because it was a hotel.” Maybe, you know, we need to be better at engaging with that guest to make sure that the next time they come they understand exactly what a serviced apartment is prior and post stay.
GH: Yes and I think that guests really like the whole idea of the serviced apartment concept because there’s more space, it’s one of those things they don’t know about it (but) once they’re introduced to it, once they stay at it, they become instant fans and it is like I just said that more space, more ability to be in one central location with family or friends or whatever it is as opposed to having three or four hotel rooms on a single floor. One thing that Marriott is experimenting with right now, and it reminds me of kinda like the suites concept from college dormers is where you have a common area and like three or four rooms, all go to that one common area and I think that that’s an interesting development in the future which kind of mimics what we’re seeing in the serviced apartment sector and extended stay sector, which gives people space to commune but also is a little larger in size.
PB: Sure, and if you look at the boutique and lifestyle hotels space, the front lobbies have been cash generators for the hotels now. Clearly, you know, it’s not a product problem for the serviced apartment sector but one thing that needs to improve is public perception and understanding and it does have a lot going for it; you know, if you look from an investor’s perspective, this time last year, very little activity, but boy in the last twelve months have the big guys come in, you know. Brookfield acquiring SACO, Mapletree taking 100% of Oakwood, Ascott taking 80% of Synergy. Aboda, we had Lee Curtis at the conference which has just been acquired by Westwood Capital. There’s Woodspring that’s been acquired by Choice. What a great level of activity and I’m expecting in the next 12 months it will be even bigger in terms of acquisitions and sales.
GH: So, based on all the CEO’s that you had at the Serviced Apartment Americas and even the other Recharge event you had in Amsterdam that I attended back in February, or was it January? Do you see more of the traditional hotel companies maybe waking up to this and trying to get involved even more in extended stay or start to dip their toes into the serviced apartment sector ? Either through acquisitions or just overall development of product?
PB: It’s definitely on the extended stay side, you know, it’s easier for hoteliers, the hotel companies, to transition across there. Mark Skinner, Highland Group said there’s been 96 months of consistent ADR growth in the extended stay space; there’s a few players that are starting to look at the lean luxury side, Uptown Suites being one which launched last year, also you know perhaps with the growth in urban living. I think the serviced apartment sector will benefit a lot by that, the way people actually live, more rentals ,etc. Interesting what AirBnB are doing with the trial product down in Kissimmee in Florida where they’re encouraging renters to rent out their apartment when they’re not there. Is that the future of urban living over the next few years?
GH: Yeah, that would be interesting. For me I never understood that whole idea of renting out my own space or doing home swaps or doing anything like that and that kind of stuff. I’ve got my stuff and I’m definitely not too keen on people poking around in things at home like that.
PB: That’s you, Glenn! One of the things that came back to me really strongly on the streets of New York – I felt old, I felt old. I was really pleased to engage with, you know, the future guests, the guests of the future, and that is what these new brands are doing, particularly AirBnB, they make ease of use, you book within two or three clicks, 100% transparency, I don’t think any hotelier, hotel owner, serviced apartment owner can feel comfortable with what was talked through in New York. However, I think there’s an element of reassurance and opportunity there too, provided people are there and they can take it.
GH: Yeah absolutely, I think that the number one thing that everyone listening needs to think about is you need to create a different perception than you have right now; we’re all blinded by bias in some sort of way, right, we talk about that when we come to the toxic political situation that we have here in the United States and to some extent the UK as well. So you all have natural confirmation bias in your general lives and one of the things that I’m afraid of is you’re not going to see the wholesale changes that are coming down the pipe right now. Particularly, with the younger generation and the thing that struck me most when speaking to the dozens of people that we spoke to on the streets of Manhattan was about how differently that they think about the ‘accommodation experience’that either you or I do Piers, and that to me was a signal that we can’t rely necessarily on what our gut tells us because our gut is filled with outdated and sometimes irrelevant information. And these younger folks are really on to something different, and want to experience things different, and because of that, we need to think different, right Piers?
PB: Sure, two words came through from those interviews to my business and perhaps other listeners:’being relevant’, that was the key and is our sort of mantra at this moment at IHM, let’s just be relevant to our audience, you could argue that the next couple of years, the brands that are going to win are those that are as relevant as possible to their target audience.
GH: So how to you make a brand can be more relevant to a target audience growing up in the future? Now, this could be either on the serviced apartment side or the boutique hotel side, which you are also very involved in?
PB: I would say, I think we’re in the age of assistance but assistance not necessarily in the way that assistance might have been described a decade ago. Obviously the mobile phone is quite a powerful tool, so use the mobile phone as an ‘assistance lever’based around guest experience. Of course, it is, we’re getting there, hospitality is getting there, your automatic checking in, etc, etc but there’s a lot that can be done, ironically the game-changers out there, like Uber and AirBnB are probably the best at it.
GH: Why do you think they’re so good at it? Is this because they came in without any pre-conceptions or just because they’re so new? What is it about these new era companies that seem to be connecting so meaningfully with customers?
PB: Ease of use, I think they keep it really simple. They’re really, really transparent. I think AirBnB is the number two most recognised brand worldwide. That’s very, very powerful. And also I think there’s an element with the growth of social media and young people today, they like to be slightly rebellious, maybe they needn’t go with the ‘status quo’ and do things differently and you know particularly with the boutique and lifestyle hotel space there’s some real new and up and coming brands out there, they do things differently, ‘The Hoxton’ for instance launching in Brooklyn soon; I’m looking forward to see what the Ennismore team do with that, having launched the hotel in London a few years ago back. Yes there’s lots of pioneers out there within the industry and we shouldn’t forget that.
GH: Are there any other pioneers out there that you’re particularly excited about?
PB: I’d probably say the AirBnB link up with the developer in Kissimmee and it was mentioned at the conference you know, Brookfield, the Managing Director, Jonathan Moore, they’ve just put $200m into that development company, I suppose ultimately to work with AirBnB a lot more closely so I think there are teething issues as well, so maybe ‘watch the space’ over the next six months or so. One thing’s for sure though, if it doesn’t work, AirBnB will be transitioning into something else. And that was the discussion about ‘transitioning your business’ which was the CEO panel discussion at the Serviced Apartment Summit Americas – I thought it was quite entertaining. The company’s called ‘Niido‘, if people want to check it out.
GH: So tell us a little bit more about the Panel and ‘transitioning your business’ with the CEO’s you had on stage?
PB: Yes we had Dean Schreiber, who’s MD of Oakwood Asia Pacific. He was really talking about the recent investment by Mapletree and also going into the ‘tiger economy’ in China and some of the issues that the Company is experiencing there, and the successes. Lee Curtis was quite reflecting in his approach because he’s in ‘acquisition mode’ from an operating standpoint. He did say that some of the smaller corporate housing and serviced apartment companies need to get their act together if they’re looking to sell their business in how they present their information, etc. You had Sean Worker with a complete transition of his business, the BridgeStreet for business as an OTA, quite a compelling message. And George Westwell, the MD of Cheval Residences, those guys are launching a new brand soon, and it’s going to be interesting what happens there.
GH: Excellent, any other big observations from the conference that you think are important to share with us right now ?
PB: Yes, I think so, sometimes organisers maybe underestimate the talent that’s actually in the room, so, as you know, what we try to do is get everybody involved as a ‘collective’ to raise the level of engagement in the room. An example perhaps of that was the discussion after the video which was quite inspiring I felt, and also the amount of ’round table’ discussions we had and some of the topics maybe: block chain in hospitality, new brands on the block, the apartment of the future, and we tried to engender a bit of fun in the room as well. Business is perhaps hard enough sometimes. Some of the best ideas can come at unexpected times.
GH: Absolutely, and I gotta tell you, as I’ve told you offline, and now I will officially pucker-up and give you the big kiss that you really deserve as the events were so great, because you’re really rethinking everything from top to bottom. The whole idea of sitting in a conference room and just listening to ‘talking heads’ all day is somewhat outdated with the way we have connected audiences today, you’re doing a great job bringing people either into the discussions in a meaningful way that leverages the brain trust that you have in that room or going remote and taking people out actually to experience the products and services that we’re all talking about available on a day to day basis and showing people action and design in the Serviced Apartments out there are pretty cool and then having such great discussions in these small ’round table’ things and kind of reporting back together for the common good of the businesses that’s fun, keeps me awake; some of these conferences I go to in a room all day falling to sleep, not at your event, I particularly love the CEO panel where you guys trucked out beers at ‘Beers with the bosses’ that you called it! Ha Ha.
PB: One of my highlights was the trip to Convene, you know the company that is, I suppose, game changing the office meeting place we went to see that. They’re adopting a hotel mentality in their approach and I could get the reason why; again, you know, they ‘ve just had I think $200 million USD investment from Brookfield, Brookfield are all over the place at the moment with investments.
GH: My big prediction is I’m glad that you mentioned Convene – I see the work sector and hospitality sector really merging together substantially in the next five years. I guarantee there will be hotel brands that will really work hard on that co-located work space, and there’s going to be work spaces, that are going to have a lot more hotel ‘elements’ in the future. So, Piers, any other big observations that you want to mention before we wrap up?
PB: I’m just really excited, really excited for hospitality and travel generally, travel and hospitality are in a good place but it’s those brands that remain relevant, close to their guests, maybe experiment as seen as one of the game changers of hospitality, whatever sector that they’re in. Yes, I’m really, really excited about the future.
PB: Excellent, so, I know you’ve got a few shameless plugs, but I know you’ve got the Boutique and Lifestyle Hotel Summit 2018 coming up in May 21st which also includes the ‘BoHo Awards‘ – the Boutique Hotel Guest Experience Awards.
GH: What else have you got going on?
PB: We’ve got that as well as something I’m really interested about. During that event is the tours: we’re touring Box Park, which is a retail real estate concept happening in a place in London called Shoreditch, we’re seeing a private members’ club, called Shoreditch House, we’re also going to see The Curtain, which is Michael Achenbaum’s new property within the Gansevoort brand, so lots going on there. We’re just about to announce our Middle East event – Serviced Apartment Middle East, again that market place has got its challenges but we’re committed to the growth of the sector: Dubai 2020 is a big push on that exhibition; they’ve just ordered £40 billion GBP of Emirates planes with regards to airlift. You know, if you look at Dubai, over the last 10 to 15 years, from what it was, to what it is now in 15 years’ time, I think the Middle East and particularly Dubai, it’s going to continue being a really good destination not just for leisure travel but business travel too.
GH: Absolutely, man I really want to get over in November 2018 to the Serviced Apartment Summit Middle East, that would be a pretty cool one and I’m dying to get over that part of the world to see some of the products. Be sure to check out Piers’ Serviced Apartment News, and of course the Boutique and Lifestyle Hotel Summit and Boutique Hotel News and I’ll put some weblinks in there as well. Are there any more shameless plugs that you want to do Piers?
PB: Yes, definitely, The Serviced Apartment Summit Europe, which is our biggest event, three times the audience that was in New York, lots more planned, based on the successes of the American event – to introduce those gradually perhaps to the agenda so watch this space, the date is July 10th -11th , we’re almost sold out in terms of stands, yes, and if listeners want to get in touch with me, my email address is piers@servicedapartmentnews.com
GH: Beautiful, I love it! Piers thank you so much for being here today, what a great interesting conversation and a sector for everyone to look out for.
