Serviced Apartments in Europe: Placing the Customer First

EHL Students - Bachelor | 21 Jul, 2016

Serviced apartments and extended stay outlets are the hotel industry’s most dynamic sectors. For this reason, Jonathan Humphries, Professor at Ecole hôtelière de Lausanne, hosted a panel of students from top hotel management schools to discuss their future during the Serviced Apartment Summit in London on July 12-13th. One of his students, Daniel Bischof, shares his perspective.

The market is shaken up and so is customer behavior. If in the United States, the sector is led by chains such as Marriott, Hilton, IHG and Choice Hotels, which differentiate their brand portfolio with upscale and mid-priced categories; in Europe serviced apartments have long been treated as niche products mainly focused on business travel, and few seem to grasp the potential to capture leisure travelers. Despite the under-development of this sector in the region, it is in the midst of a transformation driven by increasing traveler demand.

A converted breed of travelers is shaping the new context of the European serviced apartment industry. When visiting a new destination, whether the trip is leisure or business-related, they want to experience the location’s best offers in terms of restaurants, meeting spaces, attractions, shopping, etc. and this quest has to do with value, convenience and quality. Due to increased lodging alternatives and boosted professionalism, they are keen to choose private apartments and limited service hotels. In tandem with that behavioral shift, diversified offers and listings now appear on unified platforms such as Booking.com, Airbnb or TripAdvisor.

In the traveler’s mind, decision-making criteria in selecting a lodging solution are evolving. While many still rely on it, brand loyalty doesn’t always come first. In fact, more than searching for the best deal, the traveler’s quest starts with exploring the options available. This is a unique opportunity for serviced apartment providers to optimize their visibility in a manner similar to hotels, beyond the corporate niche. As a differentiation point, rather than “hard factors” (room size, amenities, services, etc.) brands should focus on “soft factors” such as atmosphere, communication and brand style.

A closer look at booking behavior reveals the role of intuition: the process starts with Meta search sites, booking and review sites and non-internet based distribution. The final booking might still happen on a hotel’s website or via a phone call – but only if people develop brand awareness during the process. While still perceived as a powerful tool, brand recognition is not sufficient for future success. For instance in terms of corporate travel, providers must identify who makes the initial filtering of extended stay and apartment options: associates, personal assistants or HR officers? What options are they looking for, and which channels do they consult first?

Not only have the channels changed but so have the devices through which they are accessed. Beyond responsive design solutions for websites and tablets, content should be adapted based on devices to offer the right information to the right person at the right time.

For instance, users tend to use smartphones to browse, explore and find inspiration, while they traditionally prefer to use a laptop or phone call for the final booking. There is potential for the hospitality industry at large to become more efficient and make use of techniques beyond yield management. A serviced apartment should not be a service-limited, stripped-down alternative to a hotel; rather, it could be recognized as a new preferred way of guest accommodation.

A key success factor for the serviced apartment industry is cross-distribution throughout different channels, enabling visibility for today’s traveler. There is a need to collaborate more closely with different platforms and providers to close the gaps within their supply chain.

At the end of the day, players in the serviced apartment sectorshould focus on one priority: the customer who sleeps at their venue and ideally leaves with positive memories. At this stage it does not matter to guests whether they stayed at a hotel or apartment—but service providers can do their best to be at the center of a memorable experience.

Author: Daniel Bischof – EHL Bachelor Student with guidance from Jonathan Humphries, Senior Lecturer at Ecole hôtelière de Lausanne.

The full article can be read on eHotelier.

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