The Association of Serviced Apartment Providers (ASAP) recently released their full year occupancy figures for 2013, showing London operators achieving an average occupancy of 84% (90% in October) with the rest of the UK averaging 80% (85% in October). Figures most hoteliers dream about, and a clear indication of the current demand for serviced apartments.
Almost the next email was from Stephen Hanton, Managing Director of SACO, announcing that they had just won ‘Best Serviced Apartment Provider’ at the 2014 Business Travel Awards, and commenting:
“We are obviously delighted to have won this prestigious industry award. The competition from our colleagues in the sector was strong. I can only imagine the competition will be even more intense next year and we will need to look at new ways to innovate, inspire and push serviced apartments to the heart of hospitality.”
So – it seemed like a good moment to meet Stephen Hanton, and find out more about SACO and the sector within which it operates.
Good news for Serviced Apartments
The recession has been good for Serviced Apartments: the product concept, and awareness of it, has grown; client numbers have grown, as has their appreciation of both the cost and ‘lifestyle’ benefits on offer; and new entrants with quality products have entered the sector.
So much so that hoteliers have been forced to pay attention to the fact that corporates appreciate such aspects as the stylish design and comfort (see SACO Waterloo – York Road, above), independence, space, and ability to feed themselves (rather than be forced to use room service or eat out) that serviced apartments offer.
Leisure travellers, too, are now growing in awareness and take up of the options offered, staying both for weekends, and also for whole or part vacations.
We can expect to see the major hotel groups expanding (launching in some cases) their Serviced Apartment offerings – but the existing, flourishing providers will not be standing still waiting for them to catch up!
SACO Covent Garden – St MartinsSACO – Bristol based and expanding
SACO is a UK company which started as a family business – hence its attention to quality, detail, and ‘personality’ – and now owns about 250 properties in the UK, leasing a further 500 or so, and looking to continue to expand. From a (very) low profile, SACO has now moved to take a higher, more visible position in the sector.
Despite the fact that its senior management are a mix of hotel and property people, however, it remains very difficult to find the right properties in the right places – unsurprisingly, London is a particular challenge, even though SACO has now operated there for 5 years. And the danger in cities like London is that, as property values rise, so the size of serviced apartments will be squeezed, resulting in smaller rooms and, potentially, shorter stays.
However, as the ASAP figures above indicate, once properties are secured and opened, occupancy rates are very good: SACO opened in Manchester with 86% occupancy.
Corporate focus
For SACO, the primary focus is on the corporate market and the company is looking to expand internationally in order to service its larger corporate clients as well as attract new ones in the increasingly mobile and lifestyle conscious business world. Such expansion can take two forms: either direct ownership of units, and/or working with partners in other cities to meet client requirements.
Like any business, servicing and therefore retaining existing clients and their requirements is a high priority.
The future
Stephen Hanton believes that the ‘star’ rating system will evolve and develop for Serviced Apartments, just as it did for hotels. VisitBritain and the ASAP already operates such a system, which will grow with the sector and help to increase awareness as well as raise standards.
And the technology is developing: the serviced apartment sector is a combination of residential lettings and hotel systems. It needs to manage length of stay and rate carefully, not sacrificing longer stays for shorter (though perhaps higher yielding) leisure stays. Hotel systems therefore need to be adapted to deliver the revenue and yield management needed by serviced apartments with their different business model – and cost base.
Websites, of course, are very important: clients and prospective clients need quick and easy access to the information they need, whether using a PC, tablet or mobile.
There’s no doubt that the Serviced Apartments sector is now well-established, with a growing profile and client awareness, and still with plenty of growth potential. And SACO is well-positioned and suitably experienced to be at the forefront of that growth.
H&C News will be watching with interest to see its progress after what Stephen Hanton describes as a ‘phenomenal’ year that combined the launch of a new technology platform (not always the most seamless process!) and growth of corporate sales by around 34% – another statistic that would be envied by most businesses.
For more information click here
SACO Bristol – Broad Quay