Serviced apartments and the currency of trust

Serviced apartments are a growing trend in accommodation, and have been attracting increasing attention and investment. On 12 and 13 July, the annual Serviced Apartment Summit Europe, dedicated to sharing knowledge, networking, and discussing best practice, was held at the Park Plaza Victoria in London.

Representatives from GuestRevu’s London office attended the summit, and GuestRevu co-founder and sales and marketing director, Francine Heywood, took part in a panel discussion on the “currency of trust”.

Francine, along with Sara Green Brodersen, founder of Deemly, and George Westwell, director of Cheval Residences, London, discussed the importance of online reputation management, guest feedback and reputational capital in the serviced apartments sector. Here’s what Francine had to say after the summit:

How do serviced apartments differ from traditional hotels?

There are a number of differences between serviced apartments and traditional hotels. The main differentiating factor is the length of stay of the guest, which could be anything from one night to 10 years, but typically seems to be around a month.

The other difference is the interaction that accommodation providers get with a guest. Within a serviced apartment, you haven’t got the food and beverage areas and you haven’t got a typical reception area, so there are fewer opportunities to interact with guests and the interactions with guests are different, so you need to find other ways to communicate with guests.

Another way that they differ is that serviced apartments have a large proportion of corporate clients. Often a corporate client may rent the apartment for three months, but you may end up with ten different people staying in it during that time, so you don’t always know who the individual guest is.

Why is online reputation management particularly important for serviced apartments?

The quality of a serviced apartment becomes more important because guests are staying there for a longer period. If you’re staying somewhere for one night and it doesn’t meet your expectations, it’s not so bad, but if you’re staying somewhere for a month, you want to know that it does what it says on the tin.

The high proportion of business travellers that serviced apartments have also makes their online reputations particularly important. If I’m a corporate travel manager stationed at head office, and I’m sending my staff somewhere for a business trip away from home, I need to make sure that the accommodation meets expectations. I need them to have suitable facilities to get their work done, and I need to make sure that the company doesn’t end up paying more than what the accommodation is worth.

Do reviews matter more to serviced apartment guests than to traditional hotel guests?

Online reputation management in the serviced apartments sector can have a big impact on your revenue stream if you don’t get it right. I think it comes down to length of stay – if I’m staying somewhere for a long time I want to know that it’s right for me, and my best way of finding that out is by reading what other people have said about it.

How does the importance of online reputation compare to that of third-party accreditation (such as star grading) in the serviced apartment sector?

Most serviced apartments don’t appear to have adopted a star grading system, so guests only have two sources of information to rely on – the information that the serviced apartment company itself publishes and the reviews that they read. This makes a property’s online reputation even more important as it’s really the only independent verification of the standard of the apartment.

Another panellist at the summit, Séverine Obertelli, stated that “Technology is often a barrier to growth in short term rentals.” Do you feel that this is true?

I do feel it’s true. I think that the challenge for people in the short-term rentals and serviced apartments space is that the software that they are using is coming to them straight from the hotel sector, so it doesn’t always meet their specific needs and that becomes a barrier.

One of the other speakers likened serviced apartments to millennials. The sector is young, innovative, and still trying to figure things out and the technology – the property management systems, the guest feedback systems and the revenue management systems – is much more mature and doesn’t always fit well with new ways. So, it’s hard for serviced apartments to find solutions that are developed specifically for them and their clients.

How does technology need to adapt?

It needs to cater for longer term guests, it needs to cater for changes of guest even though the booking remains the same, and it needs to cater to the fact that pricing and revenue is done differently. Technology needs to be more supportive on the accommodation side, because typically serviced apartments don’t have food and beverage offerings. The range of services for the guests are also going to be different and it’s important that the technology implemented by serviced apartments allows for flexibility so that it can match the services being provided.

What did you feel were the key takeaways from the Serviced Apartments Summit?

I was surprised at the amount of investment going into the serviced apartment sector as well as the buzz and level of excitement.  It seems companies are looking to build more serviced apartments than they are looking to build hotels, the reason for that being that if you build an apartment block, you have got so many options with it. It may be planned as serviced apartments, but if that doesn’t work out you can do private sector rentals or sell off the apartments, or you can convert it into something else. In contrast, with hotels, the actual fabric of the building and the way it is laid out can be much more limiting.

It was also interesting to see how the sector is figuring the way forward with AirBnB.  Some see it as a huge threat while others, like Bridgestreet, are embracing it.

Finally, from a technology point of view, a lot of the vendors came away realising that they need to refine their products to make them more suitable to the serviced apartment industry, or provide flexibility and customisation options that will make their products suitable.

Image credit: Serviced Apartment Summit Europe