With a portfolio of luxury serviced apartments and aparthotels throughout London, and plans to expand into the Middle East and Europe, few know more about what it takes to be successful in the budding serviced apartment and aparthotel market than George Westwell.
With four decades in the hospitality industry, and over thirteen years in serviced apartments in particular, George has seen the sector grow from a niche offshoot to a mainstream accommodation type.
We had the chance to chat to this industry veteran about where the luxury serviced apartments fit into the growing hospitality sector.
Where did you begin in the hospitality industry?
There are two answers to that – I actually began when I was 15. My father retired and took on a pub-come-restaurant, and I used to assist him at weekends and during school holidays. So, I guess that my first part-time job was my first insight of the hospitality industry. My first full time job in hospitality was at the New England Hotel in Boston, Lincolnshire.
What is your position now?
I'm a director of Cheval Residences Limited, which is a five-star luxury serviced apartment company based predominantly in London. We have eight locations and 509 apartments.
Cheval Residences are known as "luxury" serviced apartments. While most people know what "luxury" means in the context of a hotel, what makes a serviced apartment luxurious?
To me, it’s about discreet and efficient service, it's about the size of the apartment, as size and additional bedrooms do matter and our smallest apartment is 47m2, and it's also about the quality of the fixtures and fittings and their functionality.
If you've got blackout curtains, they need to be blackout curtains, not curtains that let light in because they're hanging off the wall. If you've got a light that is there to assist you whilst you're working in the dark, it needs to be a task light that can do its job, rather than one that the designer picked because it looks nice. Then I think it’s also about maintaining the apartment so that when guests arrive there is a feeling of, “This is my space and I feel comfortable in this space. Everything works, everything does what it should do, people are around when I need them and I get information when I want it.” I think there is a move from focussing on opulence to giving a great and memorable experience.
As the serviced apartment sector is still relatively new in many markets, is there a more pressing need to manage traveller expectations online before they book so that they are prepared for the difference between staying at a traditional hotel and apartment?
Yes, there is. For some people, one of the main expectations when staying away from home is that there are food and beverage facilities on site. I really think that is the main difference, because every other part of the guest experience is a wow factor: the space, the facilities that they’ve got in the apartment... And in most cases, we have our properties in residential areas, so they have a wealth of restaurants and bars in close proximity.
From a company perspective, we strive to educate people that staying in a serviced apartment costs a lot less than a traditional hotel. If the guest is on a corporate stay, he or she may not want to go out every night and have a big meal. If they want to sit inside and have poached egg on toast, they can do that themselves at a much lower cost. Of course when you've got families and kids, the cost can be reduced considerably because they are in one apartment, and mom or dad can cook as they would do at home. And from a safety and security point of view they’re also in the same apartment, rather than in adjoining but separate rooms as in a hotel. So I think we do have to educate travelling guests of the benefits of safety, security and cost. The advantage of having the extra facilities like a fully-fitted kitchen is something that we do need to communicate prior to guests arriving.
Personalisation has been a growing trend in hospitality, but many would argue that serviced apartments offer less opportunity to connect with your guests in this way. Is this true? How can serviced apartment providers react to the modern guest's demand for personalisation?
No, I don't think it's true. We heavily engage on social media, and while we're perhaps not quite as sophisticated as some of the big companies at using people's preferred names, we are working towards that — we are developing processes through SalesForce, and we just introduced a new contact centre, so that when you call, we will in time know from your number who you are and can greet you accordingly.
In terms of direct contact, we have a lot of opportunity — probably more opportunity — for personalisation. The biggest of our properties is Cheval Three Quays, which has 159 apartments, 62 of them long term. The team get to know those guests extremely well because they are staying a minimum of three months, often longer, and we get to know their extended families, as many of them will have family visiting and staying with them.
One story that sticks in my mind was from a colleague who had worked in a major group hotel. On talking about her previous job, she said: “We're firefighting all the time. All the time there are guests coming in, so many problems occurring, that we didn’t really get a chance to engage with the guests. But here, at Cheval Three Quays, it's brilliant, because we’ve got so much time to engage with the guests!” She told me about one guest who goes out at seven o'clock in the morning to get his cup of coffee and then always brings her back a cup and chats for five minutes. So, it’s having the luxury of time to actually engage with guests, which most guests enjoy as well. It builds it almost into a friendship.
I think we’ve got work to do on the social media and digital side, but we’re moving forward at quite a rapid pace.
Without as many human-to-human touch points in your guest journey as traditional hotels have, how do you get to know your guests so that you can solve problems and give them the experience they are looking for?
If I book at a Holiday Inn, basically all they want to know is what category of room do I want. Do I want a deluxe or standard room, and do I want a double or a twin or single bed? That's it. And when I arrive I will get allocated what I paid for. End of story.
In contrast, I would say our apartments are almost bespoke. No two buildings are alike, even rooms within the buildings themselves differ. Cheval Three Quays for example has 14 different room types. So the engagement starts, in lots of cases, where a guest will phone up because they want to know not just about the property and the room, but they might want to know about the neighbourhood — where's the nearest park? Where’s the nearest ATM or supermarket? So the first touchpoint is that interaction which we have with a lot of our guests at the point of reservations.
But even if we don't have that interaction, when the guests arrive, we accompany them to their apartment to give them a show-around — to explain what’s in the apartment and how to operate the equipment within it. From my experience in the past, if the guest has any problems or concerns, then you will normally know about them within the first 48 hours and be able to address them.
The amount of commission they pay to online travel agents is a thorn in many a hotelier's side. Is encouraging guests to book direct as important, and as challenging, for serviced apartments as it is for hotels?
Hoteliers don't have to use online travel agencies, they choose to use them and the only reason they choose to use them is because they want business from that source. If you are paying 18% commission, you are getting 82% of something. If you didn't use the OTA, you wouldn't pay the commission, but you wouldn't get your 82%.
We use channels like OTAs, and yes, we would rather have direct business, because you make more profit. We've also got to bear in mind that OTAs reach parts of the world that we would never get to. We have had bookings from places like China and Japan where we have no presence. We're not a major global company. So we're getting this business at full rack rate into apartments for long lengths of stay that we just don't have the machinery or the mechanism to do ourselves. So 18% cost, to us, is a low investment to get a high net-worth piece of business from a part of the world that normally would not have visibility towards us.
Somebody recently did a survey and asked what the largest hotel group to under 25s was, and the answer was Booking.com. It’s not a real hotel group but it’s people’s perception because Booking.com have the interaction with the guest during the booking process.
What other tiers and types of accommodation are encompassed in the serviced apartment sector?
We own and operate our properties, while a lot of our competitors lease and operate, so we have a longer term interest in the fabric of our properties. There is a budget sector, just like in hotels and also a four star apart-hotel sector, and five-star residences. In the United States you’ve also got types of accommodation such as corporate housing.
I was recently in Amsterdam and looked around eight different hotels, properties, serviced apartments, and hostels, and they vary vastly. On one end of the scale there was what I would call a three-star hostel, where only 5 of the 23 quirky rooms had en-suite facilities, there was a communal shower area, and one of the rooms was a part of an Amsterdam tram that had been cut up and put in the centre of the ground floor. The property is running at a 75% occupancy, which shows that it's definitely got a market.
On another level, there’s Zoku, where they’ve got rooms that are either 25m2 or 30m2, with high ceilings, and stairs and wardrobes that pull out to get to the bed itself, which is on a mezzanine floor. They’ve gained themselves a reputation almost overnight because of all the quirky things they've done.
We're also seeing a trend of service apartments compressing their room sizes and expanding communal areas. You'll have the launderette — the big industrial washing machines and dryers in the background, while in the front you’ve got a table tennis table, snooker tables, dart boards and Scrabble tables. You'll literally go and do your washing and play a game, or you just play a game while others do their washing. It’s a community neighbourhood, “we live together, we work together” type of vibe. I think we're seeing an explosion of that occurring.
We are also seeing more properties that link together, but share common services. So you might walk in the front door into a communal area, and you might be staying for two nights in the hotel to your left where you’ve got a smaller room, or you might be staying for two weeks in an apartment to your right which is twice the size of the hotel room. You see these combinations of different grades of room depending on length of stay, communal areas to socialise and meet in, and work areas where you can sit down and work. This hybrid or combination of facilities are increasingly coming together under one roof.
I think the reason the serviced apartment sector is growing is down to AirBnB. I always used to say that our sector has to educate the public as to what we are about, because I knew once I got a corporate into one of our properties, they would not go back to staying in hotels for extended stays — they would fall in love with the concept of serviced apartments. But the education process was slow. What AirBnB have done is woken the travelling world up to the fact that there are alternatives to hotels. Lots of people look at AirBnB or serviced apartments rather than a hotel as their first option for accommodation. I really think, because they've got such a big scale and they've evolved so quickly, that they've helped our sector significantly.
What’s the best hotel (or serviced apartment) you’ve ever stayed at and why?
I’d say the Mandarin Oriental Hotel here in London, because I had the best room service breakfast I've ever had anywhere in the world in terms of content, cooking, flavours, menu choice, and temperature. It was just perfect.
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