• OTA-only serviced apartments
Could OTAs start their own serviced apartments? Could OTA-only serviced apartments spring up with outsourced lead generation and reservations to OTA, allowing a leaner operation and dynamic value pricing? More on-premise tools would be required from OTAs, but there are already signs with OTAs recently purchasing property management companies, and such a model exists in the restaurant industry with Open Table acting as the operating system.
We’ve seen Airbnb announce their branded apartment trial earlier in the year, so is it only a matter of time before we see OTA-branded serviced apartments?
• In blockchain we trust – Airbnb and real estate disruptors
With more advancements in property technology, Blockchain is one such technology that could make a big impact in the real estate market in 2018 by offering real-time data that can help secure financial transactions. So far the advantages of using blockchain in the real estate market have been mostly ignored, even though the technology has the potential to affect millions of real estate transactions with its fraud prevention and transparency capabilities. This summer, one of the first property transactions integrating blockchain took place in Ukraine, and we have already featured bitcoin short-term rental start up Cryptocribs and its plans to engage the end-user with this technology. Others include Bee Token, and Cryptobnbwhich plans an ICO (initial coin offering) early in 2018 to disrupt the Airbnb marketplace.
Blockchain speeds up the peer to peer transaction process offering more efficiency and trust with all information recorded in a fully transparent manner. More than a cryptocurrency, blockchain technology allows for secure online data storage. There is no requirement for title searches or middlemen to secure the title transfer (think insurance and brokers), and would make the escrow companies obsolete. We can’t help thinking today’s real estate agents need to embrace the technology, maybe collectively, or be prepared to adapt their business model to a more transparent purchaser platform.
• VAT and resort fee-style costs will be passed on to the guest
Staying at serviced apartments and extended stay hotels in major markets will become more expensive next year as the practice of adding resort fees in the US, once reserved for getaways in exotic locales, becomes more and more common at urban properties-often with a nightly price tag of $25 USD, not subject to occupancy taxes. Increases in UK business rates and the recent VAT added to Dubai commercial real estate, will place additional pressure on profitability and encourage Europe and Middle East operators to pass on costs to guests too.
• HEAL Apartments
HEAL stands for Healthy Eating, Active Living – properties where wellbeing has been incorporated into the design and finish. Creating stimulating spaces and the desire to interact with the outdoors, reducing noise pollution and bringing the benefits of nature into apartments through light and green spaces. Features include no electrical outlets near headboards and even vitamin D showers. Hoteliers have successfully launched wellbeing brands like Starwood Capital’s 1 Hotels and we expect serviced apartments and extended stay brands to follow suit.
• Generation Globetrotter
10 years from now a large percentage of the population will have absolutely no interest in buying a home and will plan on spending most of their life on the road – partly due to affordability and partly because there’s going to be more and more independent employment which means people, as long as they have a connected mobile device, can work anywhere. We’ve already seen ‘temporary’ live work accommodation trends like Zoku, Roam, StayaWhile and the recently launched The Assemblage.
Chief executive and serviced apartment crowd funding guru Rodrigo Niño defines The Assemblage’s audience as the people who are at “the intersection of technology, consciousness and capital” offering “a place of convergence for those who feel we could be defined not only by the known, but by the unknown”.
• On-Demand Access For Travel Buyers
We often hear from travel buyers that they are too busy to worry about the small stuff. They want ‘live’ availability, immediate booking and confirmations. We expect the main serviced apartment providers to place additional resource on digital as a true corporate travel enabler in 2018, or risk falling behind.
• Growth Of Private And Alternative Real Estate Investments
We expect investors to commit more capital into serviced apartments and alternative real estate assets, as public markets remain at record highs across all major asset classes, and comparable yield risk remains favourable to private real estate vs higher risk bonds and equivalents.
As serviced apartments become more mainstream with the real estate institutional investor, we expect further acquisitions and consolidation to continue into 2018.
• Serviced apartments will sell far more than rooms
The business of running a serviced apartment company can no longer be boxed into four walls. The smart companies tell you they’re in the hospitality and travel business and it’s all about their ecosystems. Think about The Ascott Limited’s majority stake in Synergy Housing or Amazon buying Whole Foods, they are leveraging the power of adjacent spaces.
What does that mean for leisure travellers? Most notably, serviced apartments and hotels will now attempt to fill up their itineraries with experiences and activities, where Airbnb stole a march. Take the Your Welcome in room tablet and Marriott’s strategic investment in PlacePass, which unlocks 100,000 walking tours, biking excursions, and culinary classes in 800 destinations around the world. It’s a revenue generator and helps hospitality companies control the end-to-end shopping experience, offering data that can feed guest personalization, and distinguishes high-end properties from mid-tier ones.
• Travel in the age of ‘permanxiety’
Last year our ‘One in a million’ trend highlighted that travel remained inconsistent, impersonal and inconvenient, and predicted the huge growth we’ve seen in digital personalisation over the last 12 months. ‘Permanxiety’ – a phrase coined by our friends at Skift, highlights how travel makes us anxious by being in a permanent state of stress heightened by never fully disconnecting. The echo chamber of social media creates a state of permanent worry about security, terrorism, technology, geopolitical tensions and Trumpism, transport, culture, racial tensions and other local issues. Hospitality and travel’s promise is an antidote to anxiety and that’s how it’s marketed to consumers, or is it? what can hospitality and travel brands do to participate and limit guest anxieties in all phases of the travel cycle?
• Artificial Intelligence (AI) v Humanity.
The goal of AI is to replicate a range of functions associated with human intelligence like planning, reasoning, inference, prediction, language processing, and image recognition. Expect to see increased use of digital conversational user interfaces like chatbots and voice search, and on property robots and programs to improve guest experience. Some argue that there are literally no bounds to what such systems could achieve and the effects. If AI could surpass human capabilities and become super-intelligent, it may well be man’s last invention. Read more here
Artificial intelligence v humanity will be one of the debate discussions with 140 industry leaders at Serviced Apartment Summit Recharge, Amsterdam, January 23-24, 2018.
Continue reading to see how we did with our 2017, 2016, 2015 and 2014 trend predictions.
