2017... Who knows?
We’ve all said it but 2016 really was an unprecedented year of change. We’ve experienced a Brexit, a Trump… we need say no more… So what about 2017… who knows?
At a macro level we see continued economic and political uncertainty which makes it impossible to forecast. But, when it comes to the serviced apartment industry, here’s my view on the three things we should focus on:
- New models
Firstly, we’ll see rapid growth and profile of aparthotels, both from a supply and demand perspective. At SACO, we define “aparthotels” as purpose built developments which blend the best of hotels with the flexibility of serviced apartment living. Downstairs, guests are greeted by onsite teams, benefit from hotel facilities and amenities such as food and beverage outlets, gyms – but upstairs enjoy the space, comfort and privacy of a fully equipped apartments. Barriers concerning length of stay, security and distribution no longer exist as aparthotels are available for one night onwards and bookable on GDS or direct. This presents a great opportunity for travel and relocation managers looking to deliver choice, cost savings and an enhanced traveller experience.
Secondly, we’ll see more from within the vacation rental space (Airbnb). Serviced apartment companies will react in two ways 1) by using these sites as a distribution channel – will Airbnb become the new booking.com? and 2) developing their own VR equivalent/alternatives. At the same time, we will see the vacation rental sites continue to develop their proposition to target the corporate sector.
2. New opportunities
The serviced apartment sector has been predominantly focussed on the corporate sector, and whilst this remains our most valued segment, we will see operators and agencies focus on the wider consumer opportunity, by investing in brand, digital and distribution capabilities. This is for three reasons: 1) aparthotel operators are better equipped to deal with shorter stay business/leisure demand 2) the surge in supply means providers must find new demand to sustain this growth and 3) big brand campaigns from the likes of Airbnb are educating consumers about hotel alternatives.
Our target market, whether leisure or corporate, is changing - and it’s not just about demographic (i.e. the millennial debate). This is clear in a market like London where we’re seeing an interesting shift; new “FANG” companies (Facebook, Amazon, Netflix, Google) are becoming as prominent as traditional verticals such as banking and professional services. How we react to this through brand, product and sales strategies is a new focus. This isn’t about us distancing ourselves from traditional verticals, but working hard to understand how these new sectors behave from a travel management, HR, procurement and traveller perspective.
3. Good old fashioned hospitality
We’re all talking the same language: personalisation, “real time” and relevant communication mechanics to drive conversion and loyalty – and we can be incredibly sophisticated in our approach to data, marketing and ecommerce to deliver this. We’ve done some clever stuff in this area, and digital is at the heart of our business, but the first simple step SACO took a few years back (when we set out on our rapid expansion) was to change our thinking from being property/product led to hospitality led. This really helps us make decisions - a simple and obvious example is SACO’s move to extend call centre operating hours to provide an enhanced reservations/guest service for our growing global customer base.
So what else can we expect in 2017? Let me know in the comments section.
Ben joined SACO in 2013, bringing a wealth of experience from working in senior sales positions across the travel and serviced apartment sectors, including Go Native (serviced apartment provider), Eurostar and British Airways. Ben leads all the SACO sales activity (Business Development, Key Account Management, Online distribution and reservations) – driving the teams to deliver commercial growth through a balance of tactical and strategic initiatives. Ben is an eloquent speaker on the subject of serviced apartments – based on his knowledge, commercial approach and ability to cut to the chase and not mince his words.Read more articles by Ben Harper