“Setting up, sourcing, creating and managing bespoke living environments for clients is a challenging process”
LOCATION CHALLENGES Oakwood, Leather Lane, London
Window on the US: extended-stay hotels
GROWTH RATES IN EXTENDED-STAY SUPPLY AND DEMAND have been healthy since the recession, according to STR, creating an opportunity for hotel owners and operators to increase average daily rate (ADR), while also increasing occupancy levels. The figures tell the
story, with the most impressive performance in 2014 since 2009: 78.8 per cent occupancy, up 2.3 per cent; US$59.29 ADR, up 7.1 per cent; and US$44.34 Revpar, up 9.6 per cent, according to a report released in March
102 BBT MARCH/APRIL 2016
last year by Horwath. As a result, the sector has become more popular with developers and investors. “We see extended-stay hotels as part of new and exciting mixed uses or dual-brand projects and now innovative developers are bringing this type of hotel from highway or suburban areas to urban areas,” the report states. And in turn, this has raised public awareness. And the pipeline is
robust, with rooms reported under construction at their highest level in six years.
“Extended-stay hotel companies forecast they will add 127,000 rooms, or 35 per cent, to current supply, through 2018,” writes Mark Skinner, of the Highland Group, in the Global Serviced Apartment Industry Report (GSAIR) 2015/16.
Adding to the excitement was the launch of Best Western Plus Executive Residency in October 2015, which was actually a relaunch of extended-stay brand Executive Residency, to capitalise on the Best Western name and offering a range of room types.
When a client asks for accommodation in an area where their supplier has none, they will take over a house or apartment to fulfil the brief. “Setting up, sourcing, creating and managing bespoke living environments for clients is a challenging process,” says managing director of group commercial sales for The Apartment Service, Jo Layton. “Accurately forecasting costs is impera- tive: underestimating or overestimating will jeopardise contracts for corporate clients. The personnel costs for projects into secondary or tertiary locations can easily be one of the highest outlays of a project. “Our objective when providing this solution is to deliver a cost-effective, trouble-free process for the corporate client, the booker and the guest. In addition to a fully-serviced unit, we provide furniture rental programmes, utility hook-ups and disbursement billing.” Relationships with more than 2,500 suppliers requires performance reviews and full vetting that covers legal compli- ance, insurance requirements, duty-of-care, inspection processes and reporting, account and billing practices, and operational excel- lence, according to Oakwood. But dealing with the vagaries of local
laws and standards makes maintaining consistent standards worldwide difficult, to put it mildly. Global project coordinators work with regional account managers and local destination experts to mitigate the worst. “Having this type of relationship with our clients also allows us to set expecta- tions with them as to what is available in each area and to customise the service they receive to fit their needs,” says managing director of EMEA at Oakwood Worldwide, Debbie Lundon. A client of Skyline is a buyer for an automotive manufacturer, which looks
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