Serviced apartments IN BRIEF
■ Frasers Hospitality’s 106-apartment Fraser Place London Queens Gate property is being refurbished and rebranded as Fraser Suites Queen’s Gate. New facilities include a gym, meeting room and bar. It will reopen in April. Fraser Place and Fraser Suites Riyadh in Saudi Arabia, and a property in Dubai, will also open this year, while a 152-apartment unit is due to come on line in Frankfurt in 2014.
■ Go Native launched luxury apartments in Pioneer Point in east London in December and Devonshire Street, near Regent’s Park (see p92 for review), in January. Go Native apartments can, from this year, be booked online through the company’s new online booking-tool.
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■ Marlin Apartments is refurbishing and redecorating its entire portfolio of properties over the next year.
But organising a global programme will throw up different challenges for buyer and booker. Apart from the different standards in different regions, each market has its own trends and rules on length-of-stay, making it more complex than simply booking a hotel.
A NEED FOR CLARITY Rebecca Hollants van Loocke is UK general manager for owner-operator Ascott. She says: “Globally it is still a growing market, there is no doubt about that – although, of course, different regions have different demands.” For example, in London, Paris, or Frankfurt the demand for
“Globally it is still a growing market – although, of course, different regions have different demands.”
a long stay is limited compared to what it is in Asia, where people are relocating and, because the rental market is less mature, people stay longer in serviced apartments. SACO’s Redman adds: “Asia and the US are very developed markets, and the trend is for long stays. These parts of the world may have a minimum of 30 days’ stay or, sometimes, three months – they don’t do a couple of nights or a week, as we do in the UK, so readily. So it is quite complex and difficult for buyers to understand.” Early indications of the contents
of The Global Serviced Apartments Industry Report 2013-2014 – which is currently being written, and will
FOCUS ON BRAZIL
DEFYING GLOBAL MARKETS, BRAZIL, the world’s sixth largest economy, has enjoyed an average annual economic growth of 4.5 per cent between 2004 and 2010 (7.5 per cent growth in 2010). Although the economy has recently slowed, with the International Monetary Fund projecting a 1.5 per cent growth for 2012, Brazil is looking forward to hosting the World Cup next year and the Olympics in 2016. Patrick Hegan at Silverdoor thinks the events in 2014 and 2016
won’t affect long-term accommodation prices, just as it didn’t with the London Olympics. “I’m not convinced the World Cup and the Olympics will see substantial growth for Brazil. It’s a longer term view in business growth and a huge growth in economy – it is great to have these events but I’m not sure the connection is there for long.” The hotel market is well established in Brazil, but what about serviced apartments? Emerging markets can be a tricky place to do business. Thomas Lorenz, head of global travel at Agrega, says: “Brazil is a
real issue for us. We look at the allocation of hotels but it is hard to pay the right price in Rio de Janeiro and Sao Paulo, as the hotels are not forthcoming with long-stay rates because they are always full. On the whole, the serviced apartment offering is not quite as developed as in London and New York.” So why aren’t all the operators flooding in? James Swift, head of business development at Skyline Worldwide, says: “It’s a very difficult market place to crack unless you are Brazilian.” Skyline Worldwide has a Brazilian managing director and, while it has a strong presence in London, the company currently operates 90 apartments in Sao Paulo, plus a network of suppliers from its Alliance programme offering 4,000 apartment units in 25 cities across the country. Francine Migliorati, Skyline Worldwide’s South America general manager, says: “An international company may find it difficult to get into this market for many reasons, such as high taxes, complicated and lengthy legal processes, a protective legislation, employment laws and costs.”
The Apartment Service’s managing director, Charlie McCrow, says: “The problem with Brazil is that nothing happens quickly and it is bogged down in a lot of other infrastructure developments. There is also a huge demand on a limited supply.” Skyline’s Migliorati adds: “The idea of a low cost of living in Brazil
can also be misleading, especially in cities like Rio de Janeiro and Sao Paulo, where the cost of living is currently being compared to cities like London and New York.”
Silverdoor
MARCH/APRIL 2013
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