Global Report on Serviced Apartments 2013-2014

a TIN report

in association with

The Global Serviced Apartments Industry Report 2013-14

Editorial teamMark Harris (Contributing Editor)Bard Vos

DesignCreativo www.creativodesign.co.uk

Whilst every effort has been made to ensure accuracy, The Apartment Service, Travel Intelligence Networknor Creativo can be held responsible for any errors or omissions.

The Global Serviced Apartments Industry Report 2013/14

In association with Adagio, Frasers Hospitality & Quest Apartments

4th edition

A TIN report

Published on behalf of

The Apartment Service5 – 6 Francis Grove

WimbledonLondon

SW19 4DTUnited Kingdom

www.apartmentservice.com

By Travel Intelligence Networkwww.the-tin.com

a TIN report

Contents

Report methodology 3

Definitions – what is a serviced apartment? 4

Regional reports

I. Africa 36

II. Asia 40

III. Australasia 48

IV. Central & South America 54

V. Europe 58

VI. Middle East 66

VII. USA & Canada 71

Report conclusions 79

Global apartments listing

I. By brand 80

II. Top 15 global suppliers 81

III. Regional summaries 82

IV. Corporate housing 92

Acknowledgements & sources 3

Glossary of terms 7

Global industry overview

I. Executive summary 11

II.2013 survey findings & key trends 12

Commentary – Charles McCrow, The Apartment Service 8

Partner perspectives

I. Adagio 30

II. Quest Apartments 31

III. Fraser Hospitality 32

Regional rates comparison 34

The Apartment Service Global Serviced Apartments Industry Report 2013/142

The 2013/14 edition of the Global Serviced Apartments Industry Report has been compiled from primary andsecondary sources. Primary sources include a survey undertaken by The Apartment Service and TIN amongstserviced apartment operators worldwide.

The other primary sources used in this report include articles contributed by, and interviews with commentatorsfrom around the globe, together with other research.

Corporate Housing Providers Association

Economist Intelligence Unit

eMarketer

Ernst & Young – Top thoughts for 2013

E travel Blackboard

Global Business Travel Association (GBTA)

Global Relocation Trends Survey Report2011-12

Guild of Travel Management Companies(GTMC)

Highland Group

HRG

HR Magazine Asia

HVS International

IMF World Economic Outlook 2013

Institute of Travel & Meetings (ITM)

IPK International’s World Travel Monitor

ITB World Travel Trends Report 2012/13

Invest in Brazil

Johannesburg Tourism Company

Jones Lang Lasalle

JP Morgan Card Services

Lawpack Publishing

Oakwood Worldwide

PhoCusWright

Property Observer.com

Report methodology

Contributors

Jill Chapman, Oakwood Worldwide

Paul Constantinou, Quest Apartments

Tim Dueysen, Derag

Alain Ferrecani, The Ascott Limited

Ricky Kapoor, Hotel Booking AgentsAssociation (HBAA)

María José Clariá Méndez, Clam! Relocation

Jim Murphy, Premier Apartments

Vangelis Porikis, Adagio

Melvin Quah, The Ascott Limited

Jonathan Seex, Tamarind Group

Tony Soh, The Ascott Limited

Steve Thorne, Jumeirah Living

Sources

African Business Travel Association

Atchison Consultants - ServicedApartments Review

Association of Serviced ApartmentProviders (ASAP)

Bridgepoint Ventures

Business Traveller Africa

Business Travel Now

C9 Hotelworks

Carlson Rezidor Hotel Group

Coldwell Banker Vietnam

Colliers International

Acknowledgements & Sources

Real Capital Analytics

Relocate magazine

Savills

Smith, Jeff – corporate housingvs. extended stay

STR Global

Supply Management

The Independent

Travel Africa

Travel Weekly Australia

TripAdvisor

World Tourism Organisation (UNWTO)

World Travel & Tourism Council –Business travel, a catalyst for economicperformance

Worldwide ERC

WRRI – 2012 Employee Mobility Study

www.4hoteliers,com

www.extendedstayhotelnetwork.com

www.hoteliermiddleeast.com

www.hotelnewsnow.com

www.hotels.com

www.interimhousingsolutions.com

www.prweb.com

www.tophotelprojects.com

In association with Adagio, Frasers Hospitality, Quest Apartments 3

The term ‘serviced apartment’ is traditionally used to describe an apartmentalternative to hotel accommodation for long stay leisure or business travellers.However there are three types of accommodation to which the description servicedapartment applies, with an ever-growing list of sub-categories.

Definitions - what is a serviced apartment?

1. Extended stay hotels

Extended stay hotels are mainly studios,one bedroom with a few two bedroomapartments typically found in urbanlocations, ranging in standard frombudget to deluxe. All are fully furnishedand include:

• En-suite bathrooms

• Fitted kitchen or kitchenette

• Lounge/dining area sometimes including a sofa bed or pull down bed.

• Working area, desk, office chair, internet access & direct telephone line.

The hotel services usually available fromextended stay hotels include:

• Reception desks – some manned 24hrs, others on limited hours(e.g. Candelwood Suites )

• Daily or weekly cleaning & laundry service. (Most properties have either a shared laundry facility or anin-apartment washing machine)

There are typically no restaurants, bar orlounge areas, although the level ofservices is generally higher than thosehybrid aparthotels which are usually aleisure or resort based product, and alsocome in standards of accommodationand range of services from budget todeluxe.


2. Corporate housing

Corporate housing is typically residentialapartments up-graded for stays of 30days or more and packaged togetherwith services such as:

• Furnishings

• Weekly cleaning

• Utility charges

• Local municipal taxes

• Telephone, WiFi and TV channels

• Guest services - telephone supportfor maintenance issues etc

This type of product - also referred to assuite living and residence living - worksas company apartments for either regularvisitors or for those on extended projects.There are two main types of corporatehousing services offered:

• Apartments rented and maintained by the operator on an on–going basis

• Those rented specifically for a particular housing requirement and length of time, after which they are handed back to the owner. This is also referred to as virtual housing.

3. Condo-hotels

Predominantly found in South America,a condo hotel, also known as a hotel-condo or a Condotel, is a building usedas both a condominium and a hotel.Condo hotels are typically high-risebuildings developed and operated asluxury hotels.

These hotels have condominium unitswhich allow someone to own a full-service vacation home that, when not inuse, can be rented out and managed bythe hotel chain as it would any otherhotel room.

Serviced apartments vs. Hotels

For business users in particular, serviced apartments offer tangible, quantifiablebenefits over traditional hotels. These competitive advantages can be summarisedas follows.

1.Cost – for stays of a week or more, serviced apartments can be significantly cheaperthan hotels because their costs are lower and extra’s such as room service, hotel restaurants and bars do not apply in the serviced apartment model. Many corporates will measure these savings as ‘total cost of stay’ including car parking, WiFi, food, beverage and so on.

2.Environment – a secure, home-like environment whilst away on business – especially for long periods – makes the traveller relaxed, and more productive.This is part of corporates’ statutory Duty of Care to their employees.

3.Cooking – although hotel rooms are often equipped with microwaves and coffee makers, apartments are usually equipped with fully-functioning kitchens, enabling the traveller to entertain and the company to control food budgets.

4.Personalised – serviced apartments allow guests to customise the service they require, e.g. laundry and so on.


Corporate housing vs. extended stay

Travel managers or relocation agents selecting serviced apartments for their project,assignment or long-stay business travel needs can choose between the extended stayand corporate housing product types. The pros and cons of each category can besummarised as follows.

1.Availability – Preferred options are not always available in some regions, or at the required quality level.

2.Cost – Luxury or ‘upscale’ extended stay hotels will typically cost 20% more than corporate housing apartments based on a 30-day stay (with monthly discount rates). The higher cost reflects the range of services available to the guest in-house. However budget extended stay brands such as Studio 6 have more limited amenities and services and are therefore cheaper.

3.Minimum stay - Most corporate housing providers require a minimum stay of30 days or more, although there are some exceptions. Extended stay usually hasno minimum stay requirement because, unlike corporate housing, a lease is not being signed.

4.Lease agreements – Whilst extended stay does not require a lease, the negotiated rate could carry a penalty if a stay is cut short. Different countries and cities also have varying regulations governing taxes for temporary residence.

5.Guest expectations – Corporate housing can be provided in conventional apartments, condominiums, family homes or town houses. The variations between these different types of corporate housing allow the traveller to match his or her needs in terms of facilities, furnishings and location. Corporate housing is highly ‘customisable’.

6.Space – Corporate housing usually provides much more space and offers a full kitchen, laundry facility in the apartment space, separate bedroom, living roomand dining room.

7. Location – The comparative savings from extended stay, corporate housing or hotels can vary from location to location. For example, whilst corporate housing in a city centre should be cheaper than either of the alternatives, the same might not be the case in a secondary location.

8.Rates - Furnished rental rates are typically all inclusive whereas hotel tariffs can often contain hidden extras.

9.Amenities – These can range tremendously between locations and operators. It’s a matter of selecting what the traveller needs, and where the required amenities are located. This is what a traveller can typically expect from either corporate housing compared to up-scale extended stay.

Source: Jeff Smith


Feature

Washer/dryer

Laundry/valet service

Garage parking

Choice of furnishings

Free breakfast buffet

Free evening manager's reception

Housekeeping

Grocery shopping service

Swimming pool

Fitness centre

Tennis courts

Basketball court

Racquetball courts

24-hour reception (i.e. ‘front desk’)

Private mailbox

Loyalty programme

High-speed internet access

Pets allowed

Housewares included

Utilities included

Free local telephone calls

Tax-free

Minimum stay

City centre locations

Suburban locations

Source: www.bizstay.com

Corporate Housing

Onsite, and often in unit

Sometimes

Often available

Yes – but mainly in the USA

No

No

Varies; usually weekly or biweekly

Occasionally but at extra cost

Sometimes

Sometimes

Sometimes

Sometimes

Sometimes

No

Yes

Sometimes

Usually available, and usually free

Sometimes

Yes, and customizable

Yes

Sometimes

Usually (for stays of 30+ days)

Usually 30 days

Lots

Lots

Upscale Extended Stay Hotel

Onsite, but not in the suite

Yes

Available only in urban high-rise hotels

No

Daily

Monday - Thursday

Daily

Often available, and usually free

Sometimes

Yes, but usually quite small

No

Yes (‘sports court’)

No

Yes

No

Yes

Always available, and usually free

Usually

Yes

Yes

Sometimes

No

None

Lots

Lots

Glossary of terms

A number of acronyms or abbreviations are used in this report. These are as follows.

GDS Global Distribution Systems (e.g.Amadeus, Galileo, Sabre)

HBA Hotel Booking Agent (e.g. Expotel)

Occupancy The percentage of occupied bedrooms in a hotel during a set period

OTA Online Travel Agent (e.g. Expedia, Hotels.com)

RevPAR Revenue per available (hotel) bedroom

RMC Relocation Management Company

TMC Travel Management Company (e.g. CWT, HRG etc)

USP Unique selling point


Welcome to the Global ServicedApartments Industry Report 2013-14.This is the fourth edition of our survey ofworldwide industry supply and demandtrends in this sector.

We have reviewed many surveys,statistics and market intelligence sourcesfor this report. Sometimes it seemed thatthere was too much information, some ofwhich was contradictory, but in thispublication we have tried to present aclear and up to date picture of theserviced apartment market in each of theworld’s principal regions.

By approaching this latest report in thesame way as we did in the previous threeGlobal Serviced Apartments IndustryReports and by posing the samequestions to corporates, agents andoperators we have been able to tracknew and existing trends. There is a lot ofdata in this report which I hope will berelevant to your business.

The Mobility Revolution

Our world is steadily evolving, with thebalance of economic & industrial powertipping from the Western to theemerging economies – especially in theFar East.

Though long-predicted, this change inaxis has caught many by surprise, withsome markets continuing to behave asthough the reality remains a far-offscenario. The increasing globalisation ofbusiness is both cause and effect,creating a more mobile global workforceworking on short to medium termcontracts and projects.

Whilst this also means a secure andbright future for everyone in the serviced

apartments sector, the key to sharing inthis success will lie in understanding thenew processes, how they facilitate greateremployee mobility, and supporting thesedrivers with services and products tomeet customers’ needs.

The serviced apartment industry has oldand new issues to address. From theoperator’s side, the market needs greaterclarity of product and services, as well asbranding. In the corporate camp,company policies on traveller safety,travel policy compliance, environmentaland social responsibility issues need to beconsolidated into programmes that workfor both the employer and employee.

Both ends of the supply chain need topay attention to sovereign state interestsin monitoring work and immigration.Despite growing concern overunemployment, a worldwide shortage oftalent is predicted. As a result we will seecloser government scrutiny of crossborder mobility, especially in regionswithout free trade agreements like in theEU and NAFTA.

I recently attended two conferences thatfocussed on the issues mentioned above.One focussed on business travel, whilstthe other dealt with relocation issues suchas home search, schools, countryfamiliarisation and settling in, their themeswere the same – company policy focus oncompliance, the enforcement thereof andthe role of procurement systems.

The latter is of major concern, not only tocompanies looking to cut costs but alsoto countries facing economic crises andmaking efforts to catch stealthperpetrators. Increased cost cutting cancause an increasing ‘frizz’ factor for the

Commentaryby Charles McCrow,

The Apartment Service


traveller, in turn reducing theireffectiveness at work because they don’thave such a pleasant trip and feelundervalued. Other journey-related costssuch as breakfast and WiFi can wind upmaking these cost cutting initiativescounter-productive.

This is also true in the relocation marketswhere there has been much discussionover the years regarding assignee careand making sure the assignee feelsvalued, or alternatively offering a lumpsum package that enables the assignee todo their own thing. This has a big impacton the settling-in process and demandsspecialist destination knowledge to beexecuted correctly.

This is a growing trend for the future asGeneration Y (those born after 1980),happily uses and depends on technologyto manage their arrangements. They arewilling participants in the mobilerevolution.

The task of balancing cost with staffefficiency and wellbeing varies accordingto company size, culture andcircumstance but good, efficient servicedelivered by specialist suppliers willnever be easily replaced. Advice cannoteasily be delivered online, even if the

encourage a concerted effort in agreeingcommon ground for operators’ servicesand products.

Our 2013 survey for this reportre-affirmed that the standardisation ofservice levels and industry practice isessential to address corporates andagencies’ concerns and help them tomake the right travel or relocationchoices with confidence.

The evolution of the serviced apartmentsector has varied between regions, withlocal flavours and styles forged by localdemand and regulation. But whilst this‘regionalism’ is a vital ingredient formatching supply with demand, this doesnot mean that greater homogenisation ofprocess is either impractical orundesirable.

Standardisation should be theclarification of minimum service levelsand quality thresholds that can beexpected from different categories ofproduct. The emergence of strongbrands will also go a long way to enablethis but with such a large percentage ofindependent providers and systems,clarity on these issues is universallyrequired.

mechanics of the transaction are, sopeople will continue to rely on humaninteraction when it comes to specialistknowledge.

The flipside of the mobile technologydebate is that of policy enforcement,whether with corporate rules, local workand immigration laws or anti-briberylegislation. Increasingly the adoption ofmobile technology will force companiesto empower their staff to find their ownoptions within set rules which will bemonitored by intelligent softwareapplications that detect and report non-compliance. Governments will also usethese systems in order to keep an eye ontemporary workers and visitors onextended business trips.

The world is changing at anunprecedented rate and there isdefinitely a structural change in the waybusiness is done and how, withinnovation and talent (now known as‘human capital’) the new drivers.

Looking ahead, The Apartment Servicewill continue to work with the CorporateHousing Providers Association (CHPA) inthe USA and the Association of ServicedApartment Providers (ASAP) in the UK aswell as other interested groups to

Capri by Fraser, Changi


Introduction

The global serviced apartments Industryis continuing to mature, albeit atdifferent rates in different places acrossthe regions.

The wider hospitality industry is nowshowing real signs of post-recessionrecovery, especially in the servicedapartments sector. This recovery wasoriginally driven by hoteliers droppingtheir rates to attract business, but theemphasis is now on driving rate andrevenue per available room (RevPAR). Asa result, demand is still growing – butnot as quickly as it was two years ago.

International travel is on the up, andmany of the world’s major cities areinvesting in infrastructure projects thatwill attract and facilitate the project workand associated business travel that drivesdemand for both traditional hotels andserviced apartments. However raisingfinance to build and refurbish newapartments remains tough, and this hassignificantly reduced the flow of newsupply coming on-stream in the twoyears since the last edition of this report.

The 2013 hospitality industry has beendescribed as “big, beautiful andbranded.” Whilst the hotel chains launchnew brands, more independent hoteliersare turning to consortia such as BestWestern to benefit from their brandrecognition. Internationally, the majorchains are expanding their portfolios intothe emerging markets, customising their

products and brand standards to localmarket needs in a process dubbed‘Glocalization.’

Demand for serviced apartments isoutstripping supply in many territories,due in part to greater adoption ofserviced apartments in corporate travelpolicies, but also to more apartmentoperators taking short-stay business(i.e. less than a week) away fromtraditional hotels.

But despite the growth in awareness andunderstanding of the serviced apartmentmodel, there is still a long way to gobefore the sector is fully embraced bybusiness users. To a degree this hasbeen self-inflicted; the terminology usedvaries from country to country, as doesthe consistency of the product itself,whilst the GDS distribution channelsthrough which TMCs in particular booktravel, do not work so well for servicedapartments.

Serviced apartment operators, corporatebuyers and agents alike agree thatgreater standardisation is the key todriving the greater understanding ofserviced apartments that will ultimatelyrealise the potential of the sector. Theyalso agree that a Code of Conduct foroperators is essential for the samereason. And yet neither initiative seemsto be any nearer to fruition than theywere at the time of our last report.

Global Industry Overviewby Mark Harris,

Travel Intelligence Network

The Signature, Damac Maison, Dubai In association with Adagio, Frasers Hospitality, Quest Apartments 11

Global travel trends

Despite the continuing worldwideeconomic recession, global tourism hitrecord levels in 2012 and, thanks to theemerging markets in Brazil, Russia, Indiaand China (the BRIC nations),international travel in particular will growin 2013 (source: ITB World Travel TrendsReport 2012/13).

IPK International’s World Travel Monitorestimates that 1.08 billion business traveltrips took place in 2012, with IPK and theWorld Tourism Organisation bothpredicting 3 - 4% growth in internationaltrips during 2013.

The internet is now the world’s preferredbooking channel, accounting for 54% ofall travel bookings, with travel agentsnow handling just 24% of bookings. Boththe Asian and South American marketsare fast catching up with their US andEuropean counterparts in booking travelon-line (source: World Travel Monitor).

The fastest-growing regions in terms ofoutbound travel are South America (tripsup 12% on 2011), Africa (up 9%) and theAsia Pacific region (up 7%), although thelatter is still regarded as the powerhouseof world travel with the IMF’s WorldEconomic Outlook predicting a 5.4%

2013 survey

As with each of the three previouseditions of this report, The ApartmentService has again researched the keydemand and supply trends in the sector.

Wherever possible we have comparedthe results of this year’s survey withprevious years before presenting them toserviced apartment professionals fromaround the world for their commentsand reactions.

We have, wherever possible, tried topresent the most up-to-date figures.Where 2012 data has not been available,we have used 2011 figures instead.

In this year’s report, we have widenedthe net to collate responses fromcorporates and agents, as well asoperators. Whilst the corporates andagents surveyed were largely UK-based(but with international travel profiles),operators were once again surveyedworldwide.

As with our 2011 report, the highestpercentage of serviced apartmentoperators who took part in the surveywere European, followed by Asia (15%)the Americas (12.5%), the Middle East(7.5%) and Australasia (6.3%).

800,000800,000

700,000700,000

600,000600,000

500,000500,000

400,000400,000

300,000300,000

200,000200,000

Extended stayExtended stay

Corporate housingCorporate housing

100,000100,000

00

20092009 20102010 20112011 20132013

Fig 1 Serviced apartments – global estimates (Source: The Apartment Service)Fig 1 Serviced apartments – global estimates (Source: The Apartment Service)

increase in Asia’s Gross Domestic Product(GDP) in 2013.

Global accommodation industry

Overall, the global accommodationindustry (including hotels) enjoyed agood 2012 with demand driving upoccupancy and room rates in most worldregions (source: STR Global).

Demand is outstripping supply in the US,Asia and Middle East, as well as the BRICcountries, but whilst hotel occupancyrates in Africa have improved, rates havefallen back.

There is a mixed picture In Europe. Majorevents such as the Olympics in the UKhave driven both occupancy and rate,but hotels in Western Europe have seenrelatively low growth and hoteliers inSouthern European hoteliers arestruggling (source: STR Global).

The UK’s Guild of Travel ManagementCompanies (GTMC) and JP Morgan CardServices independently estimate thataccommodation accounts for 24.6% ofbusiness travel expenditure by companiesin the UK and US. This suggestscompanies worldwide are spending up


to £140 billion on accommodation forbusiness; so how much of that is beingallocated to serviced apartments?

Serviced apartments - supply

The serviced apartments sector hasexpanded significantly over the last 30years, although the rate of thatexpansion has varied from region toregion, city to city, and from year to year.However the impact of the recession anddifficulties faced by developers whenraising finance have seen the overallsupply of extended stay apartmentsdecline in the last two years.

In 2011, our research put the number ofextended stay apartment unitsworldwide at 599,187 in 8,362 locations,increasing inventory by 34% andlocations served by 17.5% over 2010levels. Today, we estimate that there are655,911 units in 8,802 locations. Thissuggests that supply has increased by9.4%, however the picture in individualregions, or even destinations, inevitablyvaries.

This rate of growth is not reflectedamongst the inventory of the 15 topglobal suppliers, whose supply hasgrown by just 1.7%, suggesting that theoverall increase in supply is due toindependent apartment operators joiningthe market. Figure 2 shows that theglobal supplier rankings have notchanged much since 2011, with just onenew entrant – Sun Suites – to the top 15in 2013.

Fig 2 Top 15 global operators 2009 - 2013 (Source: The Apartment Service)Fig 2 Top 15 global operators 2009 - 2013 (Source: The Apartment Service)

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Sun Suites, Hattiesburg, MS, USA


Fig 3 Top global suppliers increasing supply 2013 vs. 2011(Source: The Apartment Service)Fig 3 Top global suppliers increasing supply 2013 vs. 2011(Source: The Apartment Service)

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50,00050,000

40,00040,000

30,00030,000

20,00020,000

USAUSA

CanadaCanada

10,00010,000

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Fig 4 Corporate housing – global estimates (Source: The Apartment Service)Fig 4 Corporate housing – global estimates (Source: The Apartment Service)


As figure 3 shows, 11 of the top 15 haveincreased their supply, with QuestApartments in Australia showing thebiggest rise (28%), followed by Oakwood(21.3%) and Frasers (9.2%).

By comparison, supply of corporatehousing in the primary US and Canadianmarkets has remained almost static. AsFigure 4 shows, 2013’s 2.2% reduction(65,396 to 63,911) was not as severe asthe 13.9% fall in corporate housingsupply in 2010 over 2009.

This reflects corporate housing operators’ability to withdraw inventory from themarket during tough times and theconsequently fluctuating level of supply.

Confirming the picture of increasingsupply, serviced apartment operatorsreport that their local markets arebecoming more competitive. Figure 5shows that 77.4% of operators said thatlocal supply was increasing.

The spread of supply of servicedapartments across the world’s regionsreflects the roots of the sector, with theUS and Asia Pacific’s vast domestic traveldistances driving extended stays, as themost mature.

100100

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Fig 5 Is the number of apartment operators growing in your region? (Source: The Apartment Service)Fig 5 Is the number of apartment operators growing in your region? (Source: The Apartment Service)

Quest Apartments


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Fig 6 International serviced apartment supply comparison (Source: Savills, ASAP, STR, ABS, STB) Fig 6 International serviced apartment supply comparison (Source: Savills, ASAP, STR, ABS, STB)

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Hong Kong5.3 units

Sydney2.6 unitsSydney

2.6 units

Singapore1.8 units

Singapore1.8 units London

1.2 unitsLondon1.2 units

New York5.2 unitsNew York5.2 units

Europe remains relatively under-developed. As Figure 6 shows, Londonhas just 1.2 apartments per 1,000business visitors compared to Singapore(1.8), Sydney (2.6), New York (5.2) andHong Kong (5.3). However there are anumber of factors restricting furthergrowth in supply.

Development opportunities are oftenlimited, with strong competition fromresidential developers. Financiers do notyet fully understand the commercialpotential of the serviced apartmentsector which can make it harder fordevelopers to raise the money to buildnew apartments.

Our research shows that there has beena significant increase – 11% – in thelocations being served by servicedapartments (see Figure 7), so whatinfluences operators’ choices of newlocations?

Oakwood Worldwide’s Jill Chapmanprovides an insight. “We’ve seen asignificant increase in demand forhousing in Canada. Many citiesthroughout the Alberta province areattracting businesses who want toexplore the region’s untapped naturalresources. Companies involved in theindustries of oil, gas, energy, mining andpotash have begun sending employeesand contractors to the area in greaternumbers over the past two years.”

Ricky Kapoor of the UK’s Hotel BookingAgents Association (HBAA) providesanother, arguing that new supply comesonline “because of the old adage‘location, location, location’. The cleverbit is identifying what makes thatlocation, the corporate offices or theamenities.”

And whilst economic factors may havepreviously limited growth in supply, thepipeline is starting to flow once more,as figure 8 shows.


10,00010,000

4,0004,000

5,0005,000

6,0006,000

7,0007,000

8,0008,000

9,0009,000

3,0003,000

2,0002,000

1,0001,000

0020092009 20102010 20112011 20132013

Fig 7 Locations served by serviced apartments 2009 – 2013 (Source: The Apartment Service) Fig 7 Locations served by serviced apartments 2009 – 2013 (Source: The Apartment Service)

Chain Location Brand Apartments Opening

HiltonHiltonFrasers HospitalityFrasers HospitalityFrasers HospitalityFrasers HospitalityFrasers HospitalityFrasers HospitalityThe Ascott Ltd.CHI ResidencesMarriottJumeirahWorld HotelsAdina ApartmentHotelsFrasers HospitalityFrasers HospitalityFrasers HospitalityThe Ascott Ltd.The Ascott Ltd.HyattHyattDamac PropertiesFrasers HospitalityFrasers HospitalityFrasers HospitalityRezidorEmaar PropertiesFrasers HospitalitySwissotelFrasers Hospitality

IraqPhiladelphiaGurgaonTianjinKuala LumpurBangaloreBahrainWuhanMalaysiaSingaporeEdinburghLondonMakatiBaulkham Hills

FrankfurtChennaiWuxiParisMuscat (Oman)ShanghaiShanghaiDubaiSetiabudiAl Jadaf, DubaiRiyadhDohaDubaiKuninganDubaiJohor, Malaysia

DoubletreeHome2SuitesFraser PlaceFraser PlaceFraser ResidenceFraser SuitesFraser SuitesModena by FraserSomerset ResidencesCHIResidence InnJumeirah LivingWorld HotelsToga Hospitality

Capri by FraserFraser ResidenceModenaCitadinesSomerset ResidencesHyatt PlaceHyatt House

Capri by FraserFraser ResidenceFraser Suites

Fraser Suirtes

Capri by Fraser

200246

186

20445107133149106

51220

1400

70542

2013201320132013201320132013

201320132013201320132013

2014201420142013201420142014201420152015201520152015201620162017

Fig 8 New openings (Source: The Apartment Service)


Serviced Apartments - demand

Demand for serviced apartments hasgrown dramatically in the last 10 years,fuelled by gradually improving productknowledge, understanding of thebenefits of serviced apartments amongstcorporates, improving standards ofapartment and the arrival of majorbrands into the sector.

The gradual easing of the impact of theworldwide recession is illustrated byimproving occupancy figures – up year-on-year for 65% of operators during 2012and un-changed for 23% over 2011,compared to 59% and 22% respectivelyin 2010.

94% of operators report that demand forserviced apartments in their regions isincreasing. This compares to 77% in2011, whilst Figure 9 shows how demandfor one apartment operator - OakwoodWorldwide - has grown. Further evidenceof optimism comes from a 2013 survey ofthe Association of Serviced ApartmentProviders which revealed that 74% ofoperators in the UK and Ireland expecttheir business to increase during 2013.Of those, 50% expect an increase of up to10% whilst 20% expect an increase ofover 10%.

25,00025,000

10,00010,000

15,00015,000

20,00020,000

5,0005,000

2012 Placements exceed 20,0002012 Placements exceed 20,000

0020002000 20022002 20042004 20062006 20082008 20102010 20122012

Fig 9 Growth in demand for serviced apartments – 2000/2012 (Source: Oakwood Worldwide)Fig 9 Growth in demand for serviced apartments – 2000/2012 (Source: Oakwood Worldwide)

Global expansion inthe Euro Zone

Expansions in Asia Pacific& Canada

Investment in Latin America& Emerging Markets

Oakwood Worldwide, Marsham Street, London


2012 occupancy figures collated bySavills show that, over the three yearsperiod to the end of 2012, servicedapartment occupancy exceeded that ofhotels in four of the five main globalcities, with an average differential of3.5% (see Fig 10).

This growth in demand has been fuelledby the global economic recession,particularly amongst corporates whohave turned to serviced apartments as acost-effective alternative to long-termhotel stays, although in some cities

100%100%

95%95%

90%90%

85%85%

80%80%

75%75%

70%70%

65%65%

60%60%Hong KongHong Kong New YorkNew York SydneySydney LondonLondon SingaporeSingapore

Fig 10 Occupancy trends Serviced Apartments vs. Hotels 2009 – 2012 (Source: Savills, ASAP, STR, ABS, STB) Fig 10 Occupancy trends Serviced Apartments vs. Hotels 2009 – 2012 (Source: Savills, ASAP, STR, ABS, STB)

Occ

upan

cyO

ccup

ancy

Serviced apartments Q2 12Serviced apartments Q2 12

Serviced apartments 3-yr aveServiced apartments 3-yr ave

Hotel 3-yr aveHotel 3-yr ave

where demand is particularly high (e.g.London), hotels can sometimes work outcheaper.

Demand is being further fuelled by thegrowth in project and assignment work.Ernst & Young’s 2012 Global MobilityStudy predicts that long term and shortterm assignments will increase by 11%and 20% respectively over the next twoyears. Just under half of the companiessurveyed are increasing the number ofpeople sent to the BRIC countries.

Hotel Booking Agents Association 2013 member survey

• Usage growing – 56.5% of HBA clients used apartments more in 2012 than in 2011

• Large domestic usage (65% of clients), with Europe (43.5%) and the US (21.7%) the most popular international destinations in which serviced apartments are preferred

• 23.8% of HBA clients have average stays of 7 – 29 nights

• Price, duration of stay and total cost of stay are primary purchasing factors

Source: Hotel Booking Agents Association

The UK Institute of Travel and Meetingshas found that serviced apartment usageis growing in 86% of British companies.Our research shows that 60% of UKcorporates’ travel policies now includeserviced apartments, rising to 77% fortravel policies managed by TMCs.

77% of British business travellers nowstay in serviced apartments up to 5 timesa year for trips of up to 7 nights. Of thosewho have stayed in a serviced apartment,79% prefer them to hotels. This trend isreflected in the UK’s Hotel BookingAgents’ sector (see panel below).


EuropeEurope

77.8%77.8%

33.3%33.3%

27.8%27.8%

16.7%16.7%

22.2%22.2%

33.3%33.3%

27.8%27.8%

Middle EastMiddle East North America & Canada

North America & Canada

Latin &South America


AfricaAfrica AsiaAsia Australasia(Australia &

New Zealand)

Australasia(Australia &

New Zealand)

Fig 11 Regions in which UK-based TMC clients use serviced apartments (Source: The Apartment Service)Fig 11 Regions in which UK-based TMC clients use serviced apartments (Source: The Apartment Service)

The same applies to those companiesconsidering serviced apartments in thefuture with Europe and Asia topping thelists (see Figure 12) amongst Britishcorporates. However demand is alsogrowing in Africa and Latin America -both up 10 points for consideringserviced apartments in the future - andin Canada.

The relocation market is another primarysource market for serviced apartments,with business picking up again during2012 and expected to grow during 2013.

According to Weichert RelocationResources’ 2012 Employee MobilitySurvey, 40% of companies expect theirrelocation activity to rise in 2013, whilstglobal relocation firm Cartus predicts a57% increase in relocations as skills gapswiden and recruitment becomesincreasingly competitive.

However relocations are also takinglonger to complete, leading companiesto allow their employees to stay intemporary accommodation – oftenserviced apartments – for longer as partof extended overall relocation periods.

The main challenges of relocationinclude family adjustment, children’seducation and location difficulties. As aresult, relocation companies recommendserviced apartments over hotels becausethey offer relocating individuals andfamily’s space, freedom and flexibility,allowing them to concentrate onadjusting to new surroundings, culturesand jobs.

“Easy access to facilities with a choice ofrecreation amenities on the doorstep areall important considerations that gotowards promoting a happier andhealthier lifestyle for business executives”says Cherie Tan of Frasers Hospitality.

57% of corporates reported that averagelength of stay increased in 2012 over2011, although 38% reported no change.In our 2010 survey, 30% of operatorsreported average length of stay hadincreased and 52% reported change overthe previous year, providing furtherevidence of growing market share.

The serviced apartment experience is alsodriving demand as corporate travellersbecome advocates. “There’s a definiteincrease in requests from people whoactually stay in apartments rather thanthose who book them on their behalf”says Charles McCrow of The ApartmentService. “They know the true value of thecomfort and space apartments provide,so focussing purely on rate is not the wayto calculate the real return on investmentto the corporate.”

The global regions in which Britishbusiness travellers stay in servicedapartments are Europe, Asia, the MiddleEast, North America and Australasia (seeFig 11). The top 4 cities for servicedapartment usage by British-basedcompanies are London, New York, Parisand Barcelona.


EuropeEurope

77.8%77.8%

33.3%33.3%

27.8%27.8% 27.8%27.8%

38.9%38.9%

33.3%33.3%

27.8%27.8%

Middle EastMiddle East North America & Canada

North America & Canada



AfricaAfrica AsiaAsia Australasia(Australia &

New Zealand)

Australasia(Australia &

New Zealand)

Fig 12 Regions in which UK-based TMC clients are considering using serviced apartments(Source: The Apartment Service)Fig 12 Regions in which UK-based TMC clients are considering using serviced apartments(Source: The Apartment Service)

Fraser Place, Melbourne


Serviced apartments vs. hotels

Our research shows that apartmentusage is growing as a percentage of totalhotel nights amongst 60% of UKcorporates, but the reasons offered bycorporates, TMCs and operators varyconsiderably.

The key drivers of corporate apartmentusage are cost per night, length of stayand location (see Figures 13 and 14).Overall trip cost and ease of booking aresecondary factors. TMCs report length ofstay, location and price to be the keydrivers, but also highlight ease ofbooking as a major priority for 33% oftheir clients.

According to serviced apartmentoperators surveyed, their clients’decisions to book are based onconvenience (72%), price/qualitycomparison (69%), cost (64%) andlocation (53%). In 2010, the prioritieswere space (81%), the opportunity tocook (74%) and price (66%).

Steve Thorne of Jumeirah Living explainswhy. “As serviced apartments of anygrade start to become more assimilatedinto corporate hotel programmes, theintrinsic benefits, such as the ability tocook, begin to have less importance inthe buying process.”

Corporates and TMCs alike assess thereturn on investment on servicedapartments using three main criteria.Most popular is rental paid (used by 43%of corporates and 40% of TMCs),followed by total cost of stay includingF&B (29% of corporates, 22% of TMCs)and traveller feedback (29% ofcorporates, 11% of TMCs). 39% ofcompanies don’t measure ROI onserviced apartment usage at all.

Jumeirah Living World Trade Centre Residence, Dubai


LocationLocation

52.5%52.5%

63.8%63.8%

70%70%68.8%68.8%

20.0%20.0%

CostCost ConvenienceConvenience Price/QualitycomparisonPrice/Qualitycomparison

OtherOther

Fig 13 Influences on choices of accommodation - Corporates responses (Source: The Apartment Service)Fig 13 Influences on choices of accommodation - Corporates responses (Source: The Apartment Service)

Fig 14 Influences on choice of accommodation - TMC responses (Source: The Apartment Service)Fig 14 Influences on choice of accommodation - TMC responses (Source: The Apartment Service)

LocationLocation

PricePrice

Ease of BookingEase of Booking

Length of StayLength of Stay

OtherOther

00 0.50.5 11 1.51.5 22 2.52.5 33 3.53.5

11

22

33

44

55

75.0%75.0%25.0%25.0%

25.0%25.0%25.0%25.0%

50.0%50.0%

66.7%66.7%

33.3%33.3%

75.0%75.0%25.0%25.0%

100.0%100.0%

Most importantMost important

Least importantLeast important


Fig 15 Average rental rates achieved by serviced apartment operators (Source: The Apartment Service)Fig 15 Average rental rates achieved by serviced apartment operators (Source: The Apartment Service)

I achievepublished rates

I achievepublished rates

-5%-5%

-10%-10%

-15%-15%

-20%-20%

OtherOther

00 55 1010 1515 2020 2525

25.6%25.6%

16.7%16.7%

17.9%17.9%

15.4%15.4%

14.1%14.1%

10.3%10.3%

apartment operators still offer discountedpricing structures for those who committo longer-stays and this is something thatstill doesn’t form a core part of aconventional hotel’s pricing structure.”

“When the UK apartment market firsttook off in the late 1990’s our biggestUSP against hotels was initially the lowerrate which grabbed the buyer’sattention, followed by the space that wasoffered. This worked well for a time butwith more extended stay operatorsentering the market in the mid 2000’s,particularly in regional markets, servicebecame the new battleground and onethe buyers gravitated towards, perhapsafter having service issues at less service-focussed operators.”

Global deals

Global deals between RelocationManagement Companies (RMCs), TMCs,corporates and serviced apartmentoperators remain the exception to therule. This is due in part to TMCs andspecialist HBAs favouring hotel suppliersable to offer coverage for transient stayseither globally or in the locations

required by their clients, bookable via theGDS systems used by front line staff.

This means that new preferred partnersare only added where new demand orspecific requests arise. “Relocation andtravel management companies tend towork with specialist apartment providerslike us rather than try to accommodateapartments within their own servicedelivery teams” says Charles McCrow.“As well as the lack of productknowledge there’s also a differentmind-set required to source, negotiateand manage compliance issues inserviced apartments.”

TMCs are not geared to managing highvolumes of relationships withindependent hotel (or apartment)operators and therefore prefer to haveone regional or global servicedapartment option in their requiredmarkets, or establish an alliance with aspecialist serviced apartments providerlike The Apartment Service.

This is a major challenge for independentapartment operators because, as SteveThorne points out, “there is still not one

Achieved vs. published rental rates

Serviced apartment rental rates are underincreasing pressure with discountsbecoming commonplace, although thesize of discounts on offer can vary.

According to our research, 43% ofcorporates booking direct withapartments, and 56% of those bookingvia TMCs are achieving discounted rates,with 74% of operators saying thatachieved rental rates are lower than their2011 equivalents.

As Figure 15 shows, discounts averagebetween 10 - 20%, so is the apartmentmarket harder or softer on rate thanhotels? Steve Thorne believes that someapartment operators have increased theirnightly rates to levels comparable withhotel competitors, but without matchingservice levels or convenience.

“Apartment size becomes irrelevant for a1-2 night stay when same-day laundry isnot possible and there are no diningoptions in-house. What was once a well-priced option that could be forgiven forits hotel shortcomings is now, in somecases, perceived as an under-performinghotel alternative. However most serviced


global apartment operator to match thecoverage of a major hotel chain. Whilstevery operator would love to have directrelationships with corporate clients it’simportant to recognise the client’sbuying process and the reason they needthe agent. No matter how big yourapartment brand, unless you are in everysingle major international city, you willnever fully bypass the TMC.”

Distribution

The internet is the principal bookingchannel for serviced apartments. 80% ofcorporate bookings are made online, ofwhich 27% are via a self booking tool.75% of operators claim to be bookableonline with live inventory (see Fig 16).

Although the dominance of the web as abooking channel is reflective of globaltravel trends, both business andconsumer, this also reflects the waningpower of GDS.

Operators are increasingly frustrated bythe fundamental issues of identifying aserviced apartment within GDS, havingsufficient inventory to offer through thechannel, and the short-stay nature ofGDS bookings. As Figure 17 shows, 62%of operators are not represented on anyGDS platform, the same figure reportedin our 2010 survey.

Of the remaining 38%, representation isspread equally amongst Sabre (28%),Galileo and Amadeus (both 25%) andWorldspan (24%). These results alsomirror those of the 2010 survey,although Sabre has increased marketshare.

Serviced apartment operators continueto feel pressured to adopt conventionalhotel-centric booking processes to attracttransient corporate travellers viacorporate programmes or onlinechannels. However the fees inherent inboth GDS and online travel agencies(OTAs) are often prohibitive for smallerserviced apartment operators.

75.0

%75

.0%

25.0%25.0%

Fig 16 Serviced apartments with live inventory, bookable online (Source: The Apartment Service)

Fig 16 Serviced apartments with live inventory, bookable online (Source: The Apartment Service)

Fig 17 Serviced apartments bookable via GDS (Source: The Apartment Service)Fig 17 Serviced apartments bookable via GDS (Source: The Apartment Service)

WorldspanWorldspan

AmadeusAmadeus

GalileoGalileo

SabreSabre

OtherOther

N/AN/A

00 1010 2020 3030 4040 5050

23.6%23.6%

25.0%25.0%

25.0%25.0%

27.8%27.8%

15.3%15.3%

62.5%62.5%


temporary home with all the benefitsthat a hotel could not offer. An increasingshift in the level of relocation contractsoffering shorter periods of housing, orcontracts requiring accommodation afew days at a time has encouraged moreEuropean operators to target the shorter-stay traveller and in doing so, forcingthem to compete head to head withconventional hotels.”

“The disparity of service offering in themarket has made it difficult for thecorporate buyer to truly be sure of whatthey are contracting and so may haveavoided including apartment operatorsas a result unless, as the report concurs,operators’ locations played a part,particularly where hotel accommodationremains under-supplied.”

Thorne believes that the biggest barrierto acceptance is trying to persuade travelmanagers to accept apartmentoperators. “Often the RFP processinstigated by the corporate buyer is notflexible enough to allow the apartmentconcept to shine, but if you talk to theright corporate buyers in HR or relocationthe vast majority are already dealing withapartments on a regular basis andunderstand the benefits.”

The HBAA’s Ricky Kapoor says that thereis still a major education task facing theserviced apartment sector. “There are toomany myths about apartments. That youhave to sign a long lease, the security

By contrast, the influence of social mediais growing. According to a 2012TripAdvisor survey, over 40% of travellersuse social media channels for travelplanning. A separate study byPhoCusWright showed that over 75% oftravellers turn to social networks to shopfor deals, and 30% specifically seek outtravel-related deals.

With the number of social network usersworldwide predicted to increase by morethan 50% to 1.8 billion by 2014 (source:eMarketer), social media’s impact on thetravel and hospitality industry is alreadyprofound. No surprise then that servicedapartment operators are increasing theirpresence in the social media space.

Barriers – extended stay

Corporates who took part in our latestsurvey cited three principal barriers togreater use of serviced apartments fortransient business travel, assignment orrelocation purposes.

The first is a shortage of apartments inrequired locations, second the sector’slimited online booking capability, andthird a lack of understanding about theserviced apartment product itself.

Jumeirah Living’s Steve Thorne believesthat the latter is a perception rather thanreality. “The fundamental reason thesector developed was to accommodatethe extended-stay traveller wanting a

“There are too many myths

about apartments. That

you have to sign a long

lease, the security aspect,

or whether there is

someone at reception.

There is such an array of

different kinds of

apartments, I’m not

surprised corporates are

often confused.”

Ricky Kapoor, HBAA

Premier Apartments Limehouse Lock


aspect, or whether there is someone atreception. There is such an array ofdifferent kinds of apartments, I’m notsurprised corporates are often confused.”

“Product consistency is another issue,which is why we need a grading schemeto define what an apartment includes.For example, does it have a full kitchen?Some say they’ve got a kitchenette, butall they have is a microwave; others willhave a fridge freezer, microwave,washing machine and dishwasher.”

Barriers – corporate housing

In the USA’s corporate housing sector,the barriers are a little different. Driven bythe economic and US housing crisis,demand for apartments has increaseddramatically whilst new supply has driedup due to the construction industrycoming to a virtual standstill.

Securing inventory has become morechallenging, with operators chargingpremiums of 10%+ on short-term leases.Some properties have declined to workwith corporate housing providers oraccept short term leases.

There has been continued pressure onrental rates within EMEA, APAC and theAmericas, with destinations such asLondon, Beijing, Shanghai, New York andWashington D.C. seeing substantial risesin the rents being quoted.

Availability is particularly limited in theBRIC markets such as Delhi, Mumbai,Bangalore and across Brazil forapartments with more than twobedrooms /bathrooms. Meanwhile whatnew build is taking place lies in popularurban destinations where demand isdriving up prices. Seasonality and majorevents such as the Olympic Games alsoaffect corporate housing in terms ofpricing and availability.

Global code of conduct for operators

A recurring theme of each edition of thisreport has been the need (or otherwise)for a global code of conduct for servicedapartment operators.

In this year’s survey 86% of businesstravellers and 72% of agents said thatthere should be a global Code of

Conduct for serviced apartmentoperators. But whilst 74% of operatorsagree, 52% believe that this is notfeasible. These results mirror those of the2010 survey.

There is also a feeling amongst largeroperators that a global code of conduct isnot necessary, arguing that if the aim is toensure a professional approach by theoperator, this is open to interpretationand should be governed by normalbusiness ethics of that country.

Whilst some serviced apartmentoperators want to be seen asindependent of the hotel sector (but stillencroaching on it), any benchmarkingneeds to encompass all forms of theaccommodation industry. As SteveThorne puts it, “with such diversity in oursector – and rightly so – such a universalpoint of reference is a long way off.”

Biggest challenges

Serviced apartment operators identified anumber of challenges in their businessesduring 2013/14. Apart from the Eurozonefinancial crisis and ever-rising utility costs,the biggest challenge facing operators isthat of big hotel brands coming intoserviced apartments sector, especially inthe extended stay segment.

Here their experience, brand awarenessand access to transient booking channelscombine to deliver new business andmaintain market share that mightotherwise be lost to local apartmentoperators.

This is most obvious in the establishedNorth American markets, some Asianand European cities where planningregulations together with marketdemand have enabled brands to establishthemselves in new locations. In Londonthe major hotel brands have yet to makean impact on the established mid-rangeserviced apartment operators.

Increasing average length of stay andattracting more corporate guests is thethird-biggest challenge facing operatorsafter a couple of years in which operatorshave sought the higher average dailyrates from short stays or to fill gaps inoccupancy.

Whilst it is relatively easy to turn on thetaps of the transient market with higherrates but also higher commissions, inunderperforming markets it can be veryhard indeed to turn them off, therebyshifting the market mix for the operatorfor the long-term to a far shorter stay.

Online Travel Agents (OTAs) commissionrates are a relatively new challenge facingoperators. The channel – which demandscommission levels of up to twice that ofconventional TMCs/HBAs – can deliverhigh volumes of business, but is gearedtowards hotels. The threat here is toapartment pricing models, and theinherent dangers of raising expectationsin terms of guest services.


In this year’s survey 86% of

business travellers and 72%

of agents said that there

should be a global Code

of Conduct for serviced

apartment operators.

Business optimism

As Figures 18 & 19 show, the air ofoptimism that has pervaded the servicedapartments sector over the past five yearsshows little sign of abating.

Only a quarter of operators are lessoptimistic about occupancy levels thanthey were two years ago, and even fewerare pessimistic about achieved rentalrates. However this is in stark contrast tothree years ago, when 90% of operatorswere optimistic for the future. But howmuch headroom remains for servicedapartments to take market share fromhotels?

According to Savills’ there are anestimated 110,000 bedrooms acrossLondon’s hotels, B&Bs and servicedapartments of which 7,000 are servicedapartments – 6% of the availableaccommodation in London.

The question is what type of business willgrow that market share. If operators seekto grow their volumes with transientcorporate business, they will have toaccept a higher level of head-oncompetition with hotels, includingmarket conditions, commission levels,market regulation and customerexpectations.

One solution could lie in exploiting theleisure market, which accounts for 30%of customers using serviced apartments,according to the Association of ServicedApartment Providers (ASAP). To achievethis, however, the sector needs to addressthe fundamental issues of customerunderstanding, product consistency andmatching supply in locations with theappropriate demand.

Settling on a single set of definitions andterminology for serviced apartmentswould be a good place to start.


Fig 18 Serviced apartment optimism - occupancy 2013 vs. 2011 (Source: The Apartment Service)Fig 18 Serviced apartment optimism - occupancy 2013 vs. 2011 (Source: The Apartment Service)

More optimisticMore optimistic

Less optimisticLess optimistic

Equally optimisticEqually optimistic

40.5%40.5%

25.3%25.3%

34.2%34.2%

Fig 19 Serviced apartment optimism - achieved rental rate 2013 vs. 2011(Source: The Apartment Service)Fig 19 Serviced apartment optimism - achieved rental rate 2013 vs. 2011(Source: The Apartment Service)

More optimisticMore optimistic

Less optimisticLess optimistic

Equally optimisticEqually optimistic

38.0%38.0%

21.5%21.5%

40.5%40.5%


Partner Perspectives

The brand Aparthotels Adagio is providing urban accommodation solutions forextended stays in major European cities. The brand has the largest network in Europewith 90 properties and 10.000 apartments.

As the No 1 network in Europe, it offers different geographical locations to meet theneeds of the extended stay travellers, providing two product ranges:

• Adagio: positioned on the midscale segment and located in prime locations of key international gateway destinations, offering modern and spacious apartments.

• Adagio access: positioned on the economy segment and located on business districts of major cities, providing convenient and functional apartments.

Both product ranges provide an ergonomic room concept designed for extendedstays, with fully equipped kitchen and modular furniture. Tiered pricing from 4thnight onwards, a 24/7 reception desk and optional services such as breakfast are keyelements of the brand.

Aparthotels Adagio benefits from the operational knowhow, distribution channels andquality standards of its two shareholders, the Accor Group, the world’s leading hoteloperator, and the Pierre & Vacances Center Parcs Group, the European leaderofholiday apartments.

Aparthotels Adagio operates across 7 European countries and plans to open 60properties in the coming 4 years. The UK is set to become one of the key growthterritories in Europe, besides France and Germany. The brand is entering the Brazilianmarket in late 2013 as well as the Middle East with its first opening in Abu Dhabi.

Adagio Basel City

Adagio Access Brussels

Adagio Munich


Quest is the largest and fastest growing serviced apartment operator in Australasiawith more than 150 properties located across Australia, New Zealand and Fiji.

The company’s growth has been achieved through its commitment to meeting theaccommodation needs of the extended stay business traveller, which has consistentlycomprised its largely blue chip client base for over 25 years.

History

Beginning in the suburbs of Melbourne in the late 1980’s, Founder and Chairman ofQuest Paul Constantinou, opened the first Quest business at Royal Gardens in Fitzroy,in response to a specific extended-stay market.

Today

Today, over 25 years on and the Quest Brand remains firmly committed to that samecorporate extended-stay serviced apartment market that its success was founded on.Quest’s long-standing involvement with the evolution of the corporate extended-staymarket in Australia and business format franchise system has placed it at the forefrontof this growing market segment in Australia.

Our�customers

Quest focuses on the corporate traveller market. Our most valued customers comefrom industries including banking, telecommunications, mining and insurance. Thiskind of customer base makes our business revenue particularly stable. Contrast thiswith serviced apartments based in leisure locations, where occupancy and returns areaffected by seasonality and market cycles. Across the industry as a whole, businesstravellers comprise around 60% of total room demand – at Quest they account forover 80%.

Quest is used by 90% of Australia’s Top 500 companies and has a CBD, suburban andregional presence across every state and territory in Australia. These relationshipsprovide Quest franchise businesses with an opportunity to participate in nationaltenders via the central coordination of the Quest National Account Managementfunction.

Market�share

As a pioneer of the Serviced Apartment concept in Australia in the late 1980’s, theQuest Serviced Apartments Group has grown to become the market leader within asegment of the accommodation industry which has grown its share from 15% to 21%since 2000.

Business�model

The Quest Business Model is to establish and franchise Serviced Apartment Businessesin locations where our customers want to be. Quest then manage the national brandactivities, establish, grow and maintain relationships with national clients and supportthe franchise network that operates under the Quest Brand.

Growth

Quest Serviced Apartments has grown since the opening of its first property at RoyalGardens in 1988, to over 150 locations across Australia, New Zealand and Fiji. Indoing so, Quest has delivered a consistent and sustainable return for the benefit of allstakeholders for 25 years.

In fact, Quest has opened between 4 and 10 new businesses in Australia every yearsince 1998. This expansion has been achieved irrespective of economic or propertycycles and almost entirely organically, largely as a result of the strength of thebusiness model.

Quest SOP building

Quest on Franklin Street


Partner Perspectives

A world leader in serviced apartments and premier residences, Frasers Hospitality PteLtd (Frasers) has risen to the forefront of the global premium corporate housingmarket within a short span of 15 years. It is now one of the fastest growing industryplayers worldwide, with plans to increase its portfolio to 77 properties in 41 keygateway cities across Europe, Middle East, North Asia, Southeast Asia and Australiawithin the next three years.

Frasers’ product offerings cater to the different lifestyle needs of a wide spectrum ofbusiness travellers in the various markets: Frasers Gold-Standard premier servicedresidences; Modena 4-star serviced residences; and, Capri by Fraser, the latest brandaddition to the group’s portfolio, an urban inspired, high tech and intuitive hotelresidence that brings together the extensive range of facilities and services of a smarthotel with the comfort and convenience of a full serviced residence to meet the 24x7lifestyle of the tech-forward e-generation traveller.

Frasers is unwavering in its focus on service excellence and innovation to meet theevolving needs of the corporate traveller. This has included the introduction ofunlimited free 24x7 high speed Internet access across all its properties worldwide andthe launch of a mobile website (www.frasershospitality.com), which allows travellersto make reservations, modify bookings and have instant access to propertyinformation, special offers and promotions, via their smartphones while on the go.

Frasers’ intrinsic understanding of the importance of quality service and appreciationof the unique needs of business travellers is evidenced by the numerous industryawards that it has garnered over the years. The most recent wins include theCorporate Housing Provider of the Year 2012 at the Asian Expatriate Management andMobility Awards (EMMA), World’s Leading Serviced Apartment Brand at the WorldTravel Awards, Best Serviced Apartments Company in the Middle East 2012 byBusiness Traveller and Best Serviced Apartment Brand of China 2012 by China HotelStarlight Awards.

Over 90% of Frasers’ residents are business executives from Fortune 500 companiesincluding industries such as banking and finance, law, oil and gas, pharmaceutical,business consulting, IT and entertainment, whose retention rates average from 3 to 6months, up to 10 years. This impressive track record coupled by the positive feedbackgenerated from guest surveys, are testaments to the impeccable service and valueFrasers provides, earning it the trust of most local and international relocationagencies.

Cementing its status as one of the fastest growing industry players worldwide, thegroup is focussed on continuing to drive the Frasers brand towards further globalgrowth, while remaining grounded in its heritage and core values as a world leaderin serviced apartments and premier residences.

THE�FRASER�COLLECTION

BAHRAIN BANGALORE BANGKOK BEIJING BUDAPEST CHENGDU DOHA DUBAIEDINBURGH GLASGOW GUANGZHOU GURGAON HANOI HO CHI MINH CITY HONGKONG ISTANBUL JAKARTA KUALA LUMPUR LONDON MANILA MELBOURNE NANJINGNEW DELHI OSAKA PARIS PERTH SEOUL SHANGHAI SHENZHEN SINGAPORE SUZHOUSYDNEY TIANJIN WUHAN CHANGZHOU (2016) CHENNAI (2014) JOHOR (2015)FRANKFURT (2014) RIYADH (2015) WUXI (2014)

Fraser Suites, Suzhou


Fraser Suites, Sukhumvit

Fraser Place, Anthill, Istanbul

Fraser Residence, Shanghai

Fraser Suites, Dubai


Regional rates comparison

On the opposite page is a comparison of rate ranges for studio, one bedroom and two bedroom apartments in the seven regionscovered by this report. The figures are given in both the local currency and, for ease of comparison, in US$.

This data reveals a huge variance in average rates between regions but also in length of stay. For example a studio apartment inAfrica in 2013 costs between US$71 – 306 for stays of less than one week, rising, compared to the Middle East where the samestay costs between US$82 - 545.

Interestingly, the primary serviced apartment markets of the US and Europe are comparable rate-wise with less developedmarkets. Australasia emerges as the most expensive regional in which to stay in a serviced apartment, with the studio apartmentstarting at US$114 a night. However at the upper end of the pricing scale a studio apartment in the Middle East can cost up toUS$545 – six times the equivalent in India.

Regional Reports


Grosvenor House Apartments by Jumeirah Living

Ra

te r

an

ge

s b

y G

lob

al

Re

gio

n (

low

to

hig

h p

rice

ra

ng

e)

These rates are averag

e rates an

d may vary per lo

catio

n, time of yea

r, region

al promotions

and

specific klen

gths of stay. Rates quo

ted are ba

sd on an

aerag

e 4 star exten

ed stay preperty and

exclude

taxes. E

xcha

nge rates us

ed M

arch

201

3.

Stu

dio

On

e B

ed

roo

mT

wo

be

dro

om

20

10

a

ve

rag

era

tes

L

oca

lC

urr

en

cy

20

12

a

ve

rag

era

tes

Lo

cal

Cu

rre

ncy

US

$V

ari

an

ce

Y-o

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2/

10

20

10

a

ve

rag

era

tes

L

oca

lC

urr

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20

12

a

ve

rag

era

tes

L

oca

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urr

en

cyU

S$

Va

ria

nce

Y-o

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2/

10

20

10

a

ve

rag

era

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L

oca

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cy

20

12

a

ve

rag

era

tes

L

oca

lC

urr

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cyU

S$

Va

ria

nce

Y-o

-Y 1

2/

10

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Lo

wH

igh

Afr

ica

(Z

AR

)

1-6 nights (nightly rate)

630

2,50

065

02,80

071

- 30

63%

12%

645

3,70

065

53,90

072

- 42

72%

5%90

04,60

090

04,60

098

- 50

30%

0%

7 nights + (nightly rate)

530

2,40

056

02,60

061

- 28

56%

8%60

03,60

060

53,70

066

- 40

51%

3%80

04,80

082

54,55

090

- 49

83%

-5%

1 mon

th + (mon

thly rate)

14,000

60,000

15,200

61,500

1,66

4 - 6

,731

9%3%

16,000

77,500

16,200

78,000

1,77

3 - 8

,537

1%1%

22,500

75,000

22,000

74,500

2,40

7 - 8

,149

-2%

-1%

Asi

a (

US

D)


8025

085

275

6%10

%17

030

017

032

50%

8%21

543

021

543

50%

1%


7023

075

245

7%7%

150

270

155

280

3%4%

200

400

200

400

0%0%

1 mon

th + (mon

thly rate)

2,00

04,50

02,20

04,70

010

%4%

2,72

54,60

02,80

04,70

03%

2%3,50

05,00

03,60

05,00

03%

0%

Ind

ian

Su

b C

on

tin

en

t (I

NR

)


2,35

04,50

02,50

04,75

046

- 88

6%6%

2,90

09,00

03,10

09,20

057

- 17

07%

2%4,00

016

,000

4,05

016

,100

75 - 29

81%

1%


2,20

04,75

02,40

04,75

044

- 88

9%0%

2,70

07,45

02,75

07,70

051

- 14

22%

3%3,50

013

,000

3,70

013

,200

68 - 24

46%

2%

1 mon

th + (mon

thly rate)

50,000

72,500

52,000

75,000

962 - 1

,388

4%3%

60,000

116,00

059

,500

117,00

01,10

1 - 2

,165

-1%

1%61

,000

110,00

060

,000

113,00

01,11

0 - 2

,091

-2%

3%

Au

stra

lasi

a/

Ne

w Z

ea

lan

d (

AU

D)


100

190

110

215

114 - 2

2210

%13

%14

024

514

526

015

0 - 2

694%

6%18

030

018

032

518

6 - 3

360%

8%


8017

085

200

88 - 20

76%

18%

125

230

128

240

132 - 2

482%

4%16

526

516

527

517

0 - 2

840%

4%

1 mon

th + (mon

thly rate)

2,12

54,45

02,30

04,75

02,37

6 - 4

,908

8%7%

3,00

05,00

03,10

05,20

03,20

3 - 5

,372

3%4%

3,10

05,50

03,15

06,00

03,25

3 - 6

,196

2%9%

Eu

rop

e (

EU

R)


6527

570

285

91 - 37

28%

4%90

400

9042

511

8 - 5

550%

6%13

555

013

556

0176 - 7

320%

2%


5528

060

300

78 - 39

29%

7%80

375

8238

510

7 - 5

033%

3%90

550

9555

012

4 - 7

196%

0%

1 mon

th + (mon

thly rate)

1,30

04,50

01,40

04,60

01,82

9 - 6

,011

8%2%

2,00

05,00

02,05

05,30

02,67

9 - 6

,926

3%6%

2,50

05,50

02,60

05,50

03,39

7 - 7

,186

4%0%

Mid

dle

Ea

st (

AE

D)


280

1,80

030

02,00

082

- 54

57%

11%

500

2,00

050

02,50

013

6 - 6

810%

25%

600

2,40

061

52,50

016

7 - 6

813%

4%


265

1,60

027

51,80

075

- 49

04%

12%

450

1,65

047

51,80

012

9 - 4

906%

9%55

02,20

055

02,30

015

0 - 6

260%

5%

1 mon

th + (mon

thly rate)

8,00

042

,500

9,00

045

,000

2,45

0 - 1

2,25

212

%6%

7,75

044

,000

8,00

045

,000

2,17

8 - 1

2,25

23%

2%8,50

060

,000

8,00

059

,500

2,17

8 - 1

6,20

0-6%

-1%

No

rth

Am

eri

ca/

Ca

na

da

(U

SD

)


8520

085

210

0%5%

130

350

135

400

4%14

%175

450

170

475

-3%

6%


7020

575

200

7%-2%

130

330

125

360

-4%

9%17

040

016

039

5-6%

-1%

1 mon

th + (mon

thly rate)

1,75

03,20

01,80

03,30

03%

3%1,85

04,00

01,85

04,30

00%

8%2,25

04,75

02,00

04,50

0-11%

-5%

Ce

ntr

al

& S

ou

th A

me

rica

(U

SD

)


6016

060

180

0%12

%90

190

8521

0-6%

11%

130

300

135

325

4%8%


5514

555

150

0%3%

8018

085

200

6%11

%12

035

012

537

54%

7%

1 mon

th + (mon

thly rate)

1,65

02,32

51,70

02,40

03%

3%1,65

03,12

51,70

03,20

03%

2%2,00

04,00

02,05

04,15

03%

4%

Dis

cla

imer

: Th

ese

rate

s a

re a

vera

ge

rate

s a

nd

ma

y va

ry p

er l

oca

tio

n,

tim

e o

f ye

ar,

reg

ion

al

pro

mo

tio

ns

an

d s

pec

ific

len

gth

s o

f st

ays

Fig 20

Ra

te r

an

ge

s b

y g

lob

al

reg

ion(Sou

rce: The

Apartm

ent S

ervice)

spreading to other African countries,especially the coastal regions of sub-Saharan Africa, where the number ofhotel developments rose by 54% in 2012.

In our 2011 report, research by theW Hospitality Group showed that 20 ofAfrica’s largest hotel operators plannedto increase their portfolios by 30,000rooms before 2010. The Carlson RezidorHotel Group has already announcedplans to have 50 hotels across Africa bythe end of 2015, focussing on Angola,Nigeria, Ethiopia, Mozambique, Rwanda,Tanzania, DRC, Ghana and Zambia.

The situation is somewhat different inNorthern Africa, where the politicaluncertainty and civil wars that followed2011’s Arab Spring have discouragedforeign investors. But even this has notprevented the pipeline of new hotelsincreasing by 4% in 2012 to 75 newhotels.

South Africa

South Africa has traditionally been theprimary business travel market in theregion, attracting business travel eventsworth over US$ 28.5 million in 2011(source: Johannesburg TourismCompany) and accounting for 45% of allhotel transactions in the continent since2008 (source: Real Capital Analytics).

Johannesburg is still recognised as thebusiness and commercial capital of theAfrican continent. 55 internationalairlines fly to Johannesburg; 75% ofSouth African corporate headquarters arebased in the city.

However research by HRG highlightsstrong demand for other countries.Ghana recorded 14% growth in businessvisitors in 2012, whilst Kenya and Nigeriaboth saw significant increases in traffic.

Africa

1,6001,600

1,4001,400

1,2001,200

1,0001,000

800800

600600

400400

200200

00

Man

ufac

turin

gof

che

mic

als

Man

ufac

turin

gof

che

mic

als

$US

billi

on(2

011

pric

es)

$US

billi

on(2

011

pric

es)

Aut

omot

ive

man

ufac

turin

gA

utom

otiv

em

anuf

actu

ring

Com

mun

icat

ion

serv

ices

Com

mun

icat

ion

serv

ices

Trav

el &

Tour

ism

Trav

el &

Tour

ism

Educ

atio

nEd

ucat

ion

Fina

ncia

lse

rvic

esFi

nanc

ial

serv

ices

Min

ing

Min

ing

Fig 21 Africa direct GDP by industry(Source: World Tourism & Travel CouncilFig 21 Africa direct GDP by industry(Source: World Tourism & Travel Council

be supplied by sub-Saharan Africa ratherthan the Middle East (source: CarlsonRezidor Hotel Group).

Economic growth across Africa isincreasing demand for business travelacross the region, with African carrierscutting cross-continental routes toaccommodate more flights to Kenya,Nigeria and Ghana.

The region is increasingly attractive tohoteliers too. Whereas interest waspreviously concentrated on South Africaand the main leisure destinations alongthe North Africa coast, investment is now

Travel & Tourism direct GDP in Africareached $69 billion in 2011 exceedingthe GDP of Africa’s Chemicals,Manufacturing, Automotive, andCommunications sectors.

With 8 million direct employees in Africa,Travel & Tourism is one of the leadingemployers in the region, generating andsustaining 19 million jobs overall - nearly1 in 14 jobs in Africa.

Over the last 10 years, six of the world’s10 fastest-growing economies have beenin sub-Saharan Africa. It is estimated that,by 2015, 25% of North American oil will


Nigeria

Nigeria, one of the world’s top tenpetroleum exporters, has 26 hotels underconstruction and 17 others indevelopment in Lagos, the capital Nairobiand Mombassa.

The Tamarind Group operates servicedapartments in the latter two cities,servicing a primarily ex-pat assignmentworker market in both locations. Thereare around 100 serviced apartmentbuildings in Nairobi, most of which areindependently operated having beenintended as, or converted from residentialstock.

In Mombasa there has been a significantnumber of serviced apartmentsdeveloped in the past two years howeveroccupancy levels are low; below 40% inmany cases compared to 75%+ inNairobi.

Tanzania & others

Tanzania is set to challenge both Kenyaand Nigeria in burgeoning business traveltraffic thanks to the increasingimportance of Dar es Salaam as abusiness destination. The commercialcapital of Tanzania is the third fastestgrowing city in Africa after Lagos inNigeria and Bamako in Mali and the ninthfastest in the world.

However growth rates vary vastly fromcountry to country. For example,Namibia’s business travel was describedin 2012 as "very immature, but by nomeans clueless" by Monique Swart,founder of the African Business TravelAssociation.

Kenya

Business travel in Kenya has grownparticularly in the financial services andindustrial markets as Kenyan companiessuch as Kenya Commercial Bank, EquityBank and UAP invest in the South Sudanregion. Exports from Kenya to the regionhave more than doubled, generatingadditional air travel between Juba andNairobi.

The serviced apartments community isgrowing too, having been pioneeredlocally by the luxury, aparthotel-themedPalacina Residence. Serviced apartmentsare seen as a viable alternative to hotelsfor business travel, due partly to the highrates charged by established hotels.

Amongst the new serviced apartments toopen are Batians Peak Apartments andHeri Heights, with 28 and 46 fully-furnished apartments respectively. InKenya, January - June and September -November are the busiest periods forbusiness travel, with leisure bookingsfilled this gap in July, August andDecember when the expatriates tend togo home.

The Tamarind Group predicts that theserviced apartment sector in Kenya willincrease by 500 – 800 units in the nexttwo years and plans to roll out twobranded serviced apartment concepts -Tamarind Tree Residence and TamarindTree Extended Stay - in the four and threestar segments.

Tamarind see a gap in the market for 2 - 3star accommodation and envisage apossible decrease in 4 - 5 staroccupancies and rates due to the increasein 3 star product. Although it is difficultto say how this will affect the servicedapartment segment, many operators willhave to improve both their products andservice levels to maintain competitiveedge.

More new management companies arealso trying to get into the East Africanmarket by signing management contractsfor smaller serviced apartmentdevelopments. The principal challengesfacing local operators are not beinggeared to handle short stays letreservations and bookings, and a lack ofbrand awareness.

“Roads are being built,airports upgraded, hotelsare springing up everywhereand internet andtelecommunicationconnectivity is improving.All the signs are that Africa isbeginning to realise its hugeand undoubted potential asa major businessdestination.”

Chris Schuitmaker - HRG

Batians Peak Apartments, Kenya


Supply

Our research has highlighted 4,634serviced apartments in 76 locations inAfrica. Based on our estimates of theworld’s total supply of servicedapartments, Africa accounts for just0.714% of the global serviced apartmentsmarket in 0.86% of the world’s servicedapartment locations.

Protea Hotel Centurion, Pretoria

The major operators in the region are as follows

Protea Hotels

Southern Sun Resorts

Courtyard Apartments (South Africa)

Other

Executive Apartments and Hotels

Village and Life

Suite Novotel

Relais Hotels

Ambassador Hotel & Executive Suites

Three Cities Urban Park Hotel & Spa -

Uhmlanga

Premiere Classe Serviced Apartments

Executive Suites

Home From Home Hospitality

YAYA Centre

Prime Executive Apartments - Nairobi

Residence Casablanca Aparthotel

Heri Heights Serviced Apartments (Nairobi-

Kenya)

Meltonia Luxury Suites

Three Cities Bantry Bay - Cape Town

Gem Suites - Nairobi

Palmeraie Village (Marrakech)

Reata Serviced Apartments - Nairobi

Batians Peak - Nairobi

Hermitage Gardens Resort (Lagos-Nigeria)

Prime Apartments - Ghana

Palacina Apartments

Sandton - RSA

www.threecities.co.za


19

4

6

6

5

6

1

4

1

1

4

1

4

1

2

1

1

1

1

1

1

1

1

1

1

1

1,520

610

451

396

305

221

126

116

97

92

80

75

75

70

58

50

46

44

38

34

30

29

28

17

15

11


Fig 22

Cit

y r

ate

s a

na

lysi

s(Sou

rce: The

Apartm

ent S

ervice)

Rates

There is a significant disparity betweenthe average rental rates for a studioapartment in the primary South Africanmarket and the emerging Kenyan market.An apartment costing EUR 55 per night inNairobi for stays of up to one week willcost EUR 83 in Cape Town.

Internationally, serviced apartments inAfrica cost, on average, less thananywhere else in the world except theIndian sub-continent.

AF

RIC

A

ST

UD

IOO

NE

BE

DR

OO

MT

WO

BE

DR

OO

M

20

10

/1

1ra

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13

ra

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20

10

/1

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20

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11

ra

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ra

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oY

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Lo

cal

curr

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oca

lcu

rre

ncy

US

$E

uro

%L

oca

lcu

rre

ncy

Lo

cal

curr

en

cyU

S$

Eu

ro%

Lo

cal

curr

en

cyL

oca

lcu

rre

ncy

US

$E

uro

%

Ca

pe

To

wn


ZAR 87

2ZA

R 1,00

0USD

108

.41

EUR 83

.88

15%

ZAR 89

8ZA

R 1,05

0USD

113

.14

EUR 87

.42

17%

ZAR 1,51

0ZA

R 1,60

0USD

173

.41

EUR 13

4.23

6%

7 nights + (w

eekly rate)

ZAR 5,37

1ZA

R 6,44

0USD

697

.92

EUR 54

0.05

20%

ZAR 5,65

7ZA

R 6,35

0USD

688

.36

EUR 53

2.70

12%

ZAR 9,51

3ZA

R 9,87

5USD

1,070

.28

EUR 82

8.47

4%

One mon

th + (mon

thly rate)

ZAR 13

,350

ZAR 14

,275

USD

1,547.02

EUR 1,19

7.03

7%ZA

R 12

,700

ZAR 12

,975

USD

1,406

.53

EUR 1,08

8.48

2%ZA

R 16

,800

ZAR 17,500

USD

1,896

.70

EUR 1,46

8.18

4%

3 mon

th + (mon

thly rate)

ZAR 11,800

ZAR 12

,500

USD

1,354

.66

EUR 1,04

8.59

6%ZA

R 12

,450

ZAR 12

,500

USD

1,354

.78

EUR 1,04

8.70

1%ZA

R 16

,050

ZAR 16

,350

USD

1,771

.77

EUR 1,37

1.31

2%

Na

iro

bi


KES 5,30

0KE

S 6,10

0USD

71.21

EUR 55

.12

15%

KES 8,00

0KE

S 9,00

0USD

105

.07

EUR 81

.31

13%

KES 9,90

0KE

S 10

,850

USD

126

.66

EUR 98

.02

10%

7 nights + (w

eekly rate)

KES 33

,000

KES 32

,500

USD

379

.41

EUR 29

3.66

-1%

KES 54

,500

KES 57

,200

USD

668

.04

EUR 51

6.18

5%KE

S 62

,200

KES 63

,000

USD

734

.69

EUR 56

9.39

1%

One mon

th + (mon

thly rate)

KES 12

0,00

0KE

S 115,00

0USD

1,342

.52

EUR 1,03

9.12

-4%

KES 18

0,00

0KE

S 17

0,00

0USD

1,984

.59

EUR 1,53

5.36

-6%

KES 20

5,00

0KE

S 20

8,00

0USD

2,425

.66

EUR 1,87

9.88

1%

3 mon

th + (mon

thly rate)

KES 111,50

0KE

S 11

0,00

0USD

1,284

.15

EUR 99

3.94

-1%

KES 175,00

0KE

S 16

0,00

0USD

1,867

.85

EUR 1,44

5.42

-9%

KES 19

2,90

0KE

S 19

6,00

0USD

2,285

.71

EUR 1,77

1.35

2%

Ra

tes

in k

ey

cit

ies


e rates an

d may vary per lo

catio

n, time of yea

r, region

al promotions

and

specific klen


ted are ba

sd on an

aerag

e 4 star exten


exclude

taxes. E

xcha

nge rates us

ed M

arch

201

3.

Southern Sun The Cullinan, Cape Town

39

1,6001,600

1,4001,400

1,2001,200

1,0001,000

800800

600600

400400

200200

00

Man

ufac

turin

gof

che

mic

als

Man

ufac

turin

gof

che

mic

als

$US

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Fig 23 Asia direct GDP by industry(Source: World Tourism & Travel Council)Fig 23 Asia direct GDP by industry(Source: World Tourism & Travel Council)

Hotel occupancy across Asia Pacificaveraged 68.3%, up marginally on 2011.This slowing of growth rate is attributedto demand outpacing supply increasesover the previous three years, althoughthe region’s 2012 RevPAR of US$88.24represents the highest achieved since1998.

Regional occupancy increases werehighest in Bangkok (up 11% to 70.5%)and Tokyo (up 10.4% to 82.5%). Thebiggest falls came in Ho Chi Minh City(down 5.4% to 63.7%) followed by Bali(down 4.1% to 69.8%). Three markets –Jakarta, Taipei and Tokyo saw double-digit increases in average daily rate.

The Travel & Tourism industry in Asiawas worth $554 billion in 2011,generating $1.7 trillion in GDP, or 8.4%of Asia’s GDP.

Asia is often referred to as thepowerhouse of world tourism, withoutbound travel amongst Chinese andJapanese nationals leading the way.Outbound travel from China and Japangrew by 20% and 13.7% respectively inthe first half of 2012 and is predicted togrow by 6% overall in 2013 (source: ITBWorld Travel Trends Report).

Across the region, China is the fastestgrowing market. In 2011 Chinesetravellers made over 70 millioninternational trips; this 22% growth over2010 was fuelled partly by the relaxationin visa regulations and is predicted tocontinue with a 12% growth in outboundtravel during 2013. Much of thatoutbound travel will be to destinationswithin the Asia Pacific region. 20% ofhoteliers in APAC expect the number ofChinese visitors to rise by over 40%(source: Hotels.com)

Like most other BRIC nations, one of thechallenges facing China in the globaltravel market is the investment inbusiness and commercial infrastructurerequired to service and drive businesstravel. China is more advanced than, say,Brazil in this respect, with significantinvestment made in regional airports aswell as those servicing the main Chinesebusiness hubs of Shanghai, Beijing andGuangzhou.

Demand

Hotels in the Asia/Pacific regionexperienced positive results in the threekey performance metrics in 2012,according to data compiled by STRGlobal.

Asia

Although the US is recognised as thebirthplace of serviced apartments, thesector has been operating in Asia for over30 years. The market comprises acombination of branded andindependently operated servicedapartments, local furnishedaccommodations, villas, and guesthouses.

Product consistency and quality varyconsiderably however. A reputable,trusted provider is considered essential ina market where secondary cities andremote locations have limited options fortypes of housing available.


Hong Kong

Serviced apartments first appeared inHong Kong as ‘aparthotels’ in the 1980’s.Today, the local market services asubstantial number of ex-pats workingand an ever-increasing number of foreignnationals arriving to work or seekinginvestment from the world’s largest IPOmarket.

These business travellers come mainlyfrom the US and Europe, but arrivalsnumbers from mainland China and SouthEast Asia are growing too. Hong Kong isthe gateway to China and this has been acontributory factor to serviced apartmentoccupancy levels averaging 90 – 95% in2011.

Colliers International estimate that thereare around 17,000 serviced apartments inHong Kong, with the largestconcentrations – and highest averagerates - in the Central and Wan Chaidistricts. But with both local andinternational operators recognising thevalue of serviced apartments, the supplylandscape in Hong Kong is becomingmore competitive, whilst apartmenttenants are becoming more demandingin terms of service and quality.

China

There are more than 520 new hotelsunder construction in the MiddleKingdom.

Tourism growth is primarily originated byforeign tourists: 294 million overnightstays were counted in 2011.Approximately 106 million hotel gueststravel to and within China every year - 70million come from abroad.

Beijing is the centre of China’s servicedapartments sector. There has been aremarkable price growth in the Beijingresidential market in recent years, withcapital values of high-end apartmentstripling since 2001. The average rents ofBeijing serviced apartments haveincreased by 30% over the last two years,with apartment owners and operatorsbenefiting from a supply line stagnantafter the 2008 Olympic Games.

Demand for Beijing’s high-end servicedapartments is partly due to theexpanding presence of multi-nationalcorporations, foreign senior managersand ex-pats overseeing new projects.Demand for corporate housing has alsoincreased as Beijing attracts moreworkers from both overseas and theChinese provinces.

A shortage of high quality office space inthe prime areas and the expansion ofHong Kong’s infrastructure are drivingnew serviced apartments supply in theNew Territories where rentals arecomparatively lower. For example, CHIInternational aim to add another 400serviced apartments to their existing100-strong portfolio by 2015.

India

In India there are more than 295 newhotels planned and 2,900 up-markethotels operating at average 61%occupancy. (source:www.tophotelprojects.com).

The tourism sector in India alsoexperiences continued growth. The 1,000existing first class and luxury hotels willbe supplemented by 295 new propertiesand 48,000 hotel rooms.


Shama Century City, Shanghai

Japan

There are 13 new up-scale hotels cominginto an already saturated Japanese hotelmarket. The largest project is the 376-room Marriott Hotel in Osaka, due toopen in spring 2014. 346 rooms willcome on-stream when the new Hiltonopens in Okinawa in early 2014.

Other projects in Japan include theRitz-Carlton in Osaka (136 rooms,opening May 2014) and the boutiqueAndaz Hotel in Tokyo (164 rooms,opening early 2014).

Philippines

The second fastest growing economy inAsia and a stable political environmentare combining to fuel a surging Manilahospitality market, particularly in thehigh end luxury sector, with escalatingroom rates and strong occupanciessetting the stage for dramatic futuregrowth for the sector.

With an economy growing at 7.1% - justa few points behind China - there is astrong pipeline of growth and investmentin the hotel sector with 5,797 roomsopening over the next five years, growingsupply by 37%. Research by C9Hospitality predicts that average roomrates of 6% and occupancy in luxuryaccommodation of 72%.

Manila is home to 15,567 hotel rooms,57% of which are in the up-scale tier. Thecorporate transient and meetings marketsaccount for 78% of total hotel roomnights. The urban spread of MegaManila is expected to create new marketsfor the apartments sector.

Singapore

The rising number of companies sendingemployees on short-term assignmentshas seen serviced apartment operators inSingapore encounter a surge in demandfor short stays – especially if the assigneeis accompanied by family members.

The Ascott Ltd reports that compared toan average assignment of two to threeyears, average stays now range from afew weeks to six months. 60% ofresidents in Oakwood properties inSingapore stay for less than one monthup to a similar maximum.

Citadines Tokyo Shinjuku

Discovery Suites, Pasig

Studio Residence, 8 on Claymore, Singapore


Taiwan

Taiwan is one of the crucial transit hubsin Asia, as an important industrial andexport partner for the United States andthe European Union. Taiwan is part ofthe Four Asian Tigers, with Hong Kong,Singapore and South Korea in the 1990sand has been successfully transformedfrom a cheap labour-intensivemanufacturing economy into a worldleader in advanced technology.

In 2009, Taiwan was one of the worst-hiteconomies in the Asia Pacific region butbounced back in 2010 and 2011,registering 10.7% and 4.0% GDP growth,respectively. Mainland Chinese residentsfrom 13 cities can now travelindependently in Taiwan.

Signs of rejuvenation have sparkled inTaiwan’s hotel market with theemergence of new hotels like the WTaipei and Le Meridien.

With a relatively low incoming supply ofupscale hotels and high occupancy ratesin both Taichung and Kaohsiung’smarkets, hotel developers are receivingencouraging signals about futuredemand.

Limited high-end hotel supply in Taiwancoupled with a positive tourist arrivalsoutlook provide opportunities forTaiwan’s hotel market to bloom.

The strongest increase in visitor arrivals isstill from mainland China. Since Taiwanhas lifted the travel restrictions formainland Chinese visitors, arrivalstatistics from mainland China hasregistered a CAGR of 55.3% from 2007 to2011. According to the Taiwan TourismBureau (TTB), total visitors to Taiwan areexpected to reach 10 million by 2016.

Taiwan is also a major centre forexhibitions in Asia. In Taipei, Taipei WorldTrade Centre (TWTC) and Taipei WorldTrade Centre Nangang Exhibition Hall(TaipeiEx) are two of the major MICEfacilities in Taipei that caters to bothdomestic and the international events.

Hotel room supply increased by 3.1%between 2006 and 2012. Standardtourist hotels form the bulk of lodgings,accounting for 73% of the total

accommodation supply in June 2012. Theoverall supply growth rate spiked in 2010at 3.6%.

Thailand

Thailand’s serviced apartments sector iscentred on Bangkok, where Knight Frankput the number of serviced apartmentsat just under 16,000, an increase of 1.2%on 2011. 45% of that stock is located inSukhumvit - home to a substantialproportion of the region’s 789,000ex-pats.

Following the political unrest of 2009 –2011, demand and supply of servicedapartments is set to grow again inThailand. Serviced apartment occupancylevels in 2012 were marginally above thatof the hotel competitors, up 5% to75.59%.

Vietnam

Despite the Vietnamese economyunderperforming, Ho Chi Minh City(HCMC) has maintained a high GDPgrowth rate and considered as the mostdynamic city in the country. And despitethe real estate market being significantlyaffected in comparison to otherindustries, the serviced apartment sectoris now attracting investors drawn byrising demand.

Around 60% of the 3,000 servicedapartments in HCMC are located in thecentral business district, with The AscottLtd and Frasers Hospitality amongst themajor players locally. The market can alsobe subdivided by tenants’ nationalities.Residents of District 1 and 3 come fromJapan, Singapore, and Malaysia, Central,Southern and Eastern Europe. Those inthe new urban areas in District 7 such asPhu My Hung tend to be from Korean,China and Taiwan. Tenants from the USor UK are centred on District 2.

By 2015 an additional 20 servicedapartment projects providing 5,200 unitswill take the total supply to nearly 9,000apartments. The new projects will beconcentrated in District 4 and Tan BinhDistrict.

Oakwood Residence, Bangna, Bangkok

Somerset West Lake, Hanoi


Furthermore, residents’ programmes likelocal city tours and cultural workshopsoffered at serviced residences such asAscott’s help expatriates and businesstravellers assimilate quickly into theirnew environment.

Compared with booking multiple roomsin a hotel, companies are able to enjoygreater value by housing their executivesin a larger serviced apartment whereeach executive can still enjoy the privacyof individual bedrooms. Companies canalso have the flexibility to adjust theduration of the leases in servicedapartments, should there be changes inthe duration of projects or assignments.

According to The Apartment Service’sGlobal Serviced Apartments IndustryReport 2011-2012, the servicedapartment industry has grown 34% inunits in just two years, between 2010and 2012.

The strong demand for servicedresidences is also reflected in the GlobalServiced Apartment Market Reviewpublished by Savills in 2012. Occupancydata for key global financial centrespoints to an average occupancy of 87.9%for Q2 2012, ranging from 85% inSingapore to 91.6% in Hong Kong.

Looking ahead, the serviced apartmentindustry is poised for further growth inAsia given the region’s strong economicfundamentals, which will continue toattract foreign direct investments,relocating expatriates and businesstravellers on project assignments.

Ascott, being the largest internationalserviced residence owner-operator,currently has a portfolio of over 120operating properties in Asia, with another40 properties under development. Wesee strong potential for further growth inthis region.

China, in particular, will continue to beour fastest growing market. It is theworld’s second largest economy and atop destination for overseas assignments.Besides gateway cities such as Beijing andShanghai, there is increasing demand inhigh growth cities such as Chengdu,Wuhan and Xiamen. These cities havebeen attracting foreign direct investmentsdue to their rapid urbanisation andstrong infrastructure. Ascott currently hasover 8,000 apartment units in China. Inthe next few years, we target to expandto 12,000 apartment units and opennearly 20 new properties in cities such asBeijing, Chengdu, Foshan, Guangzhou,Hangzhou, Hong Kong SAR, Macau,Shanghai, Shenzhen, Suzhou, Xiamen,Xi’an and Wuhan.

Ascott is also looking to expand inSingapore, where demand remainsstrong, driven by the inflow of foreigninvestment and various governmentinitiatives to reinvent Singapore as anexciting business and leisure destination

Elsewhere in Asia, we expect to open over20 properties in India, Indonesia,Malaysia, Vietnam and the Philippineswhere sustained foreign investment willcontinue to generate significant demandfor quality accommodation.

With more growth opportunities forserviced apartments, we can also expectcompetition for the extended-stay marketto become stiffer. Serviced apartmentoperators will need to be adaptable tomarket needs, stay ahead of the trends,innovate and enhance quality as wegrow. Ascott intends to leverage itsglobal presence to achieve economies ofscale and will continue to focus onimproving guest experience throughrefurbishment programmes and othercustomer service initiatives.

Market perspective

Asia is the fastest growing region in theworld today. Many companies areexpanding in Asia to tap on the region’sgrowth opportunities.

According to a 2012 talent mobility studyby global professional services firm,Towers Watson and workforce mobilityassociation, Worldwide ERC, 45% ofcompanies worldwide projected anincrease in cross-border expatriateassignments till 2014, with 65% of therespondents identifying Asia as the mostfrequent destination for suchassignments. Amongst Asiancorporations, an overwhelming 85%cite the region itself as their primarydestination for cross-border assignments.

This increased talent mobility createsstrong demand for qualityaccommodation including servicedapartments in Asia.

Serviced apartments are gainingpopularity as more companies recognisethe benefits that serviced apartments canprovide for their executives’ relocation orproject assignments.

Serviced apartments bridge the gapbetween hotels which cater mainly toshort stays and the traditional rentalmarket. In addition to services andfacilities typically found in hotels,serviced apartments offer more space,comfort and privacy, much like a normalapartment. With a fully equippedkitchen, separate living area, homeentertainment system and broadbandand wireless Internet connectivity,serviced apartments combine theconvenience of hotel services and theunique feeling of staying in a spacioushome away from home.

Boom�time�for�servicedapartments�in�Asia

By�Tony�Soh,�Chief�Corporate

Officer,�The�Ascott�Limited

Tony Soh, Chief Corporate Officer,The Ascott Limited


Supply

Our research has highlighted 49,480serviced apartments in 419 locationsacross the Asia region. Based on ourestimates of the world’s total supply ofserviced apartments, Asia accounts for7.54% of the global serviced apartmentsmarket and in 4.76% of the world’sserviced apartment locations.

Based on these figures, regional supplyhas therefore increased by 16.8% since2011.

Somerset Vista, Ho Chi Minh City


The major operators in the region are as follows.

Somerset

Other Serviced Residences

Oakwood

Citadines Aparthotels

Fraser Suites

Compass Hospitality

Nieva World Apartments

Ascott The Residence

Other

Tokyu Stay Apartment Hotels - Tokyo

Centre Point Residences Bangkok

Shama Group

Marriott Executive Apartments

Kantary Collection

Far East Serviced Apartments Company -

Singapore

Shangri-la Serviced Residences

Fraser Place

Cape Collection

Kameo Collection

Lanson Place

Modena

St. Mary Residences - Kuala Lumpur

Fraser Residence

Kempinski Residences

Capri

Damas Suites & Residences - Kuala

Lumpur

Jazz Residence at Pacific Place - Kuching

(Malaysia)

Royal Suites & Tower - Shenzhen

Belvedere Serviced Apartments - Shanghai

Green Court Serviced Apartments -

Shanghai

New Harbour Serviced Apartments -

Shanghai

Le Papillon India

Sunflower Hotel & Residence - Shenzhen

Ovolo Group

Easy Beijing (new entry)

Green Tree Suites (China)

Phachara Suites - Bangkok

Asahi Homes (Tokyo) (new entry)

Pan Pacific Serviced Suites - Singapore

Signature Crest (India) (new entry)

Star City Hotels (Chennai) (new entry)

Best Western

Hotel Mystays Asakusa - Tokyo

Heritage Hotels

Far East Serviced Apartments Company -

Malaysia

Regalia Residences - Changning Shanghai

Canton Residence - Guanghzhou

The Ascott Ltd.

The Ascott Ltd.

Oakwood Corp Housing

The Ascott Ltd.

The Ascott Ltd.

Marriott

Kasemkij Properties

Shangri-la Hotels

Kasemkij Properties

Kasemkij Properties

Frasers Hospitality

Eastern & Oriental

Kempinski Hotels

Frasers Hospitality

New World Group

Pan Pacific Hotels

Best Western

New World Group

33

63

17

19

14

10

14

11

16

14

9

13

11

7

9

17

6

5

5

5

3

1

6

6

2

1

2

1

1

1

1

5

1

5

1

1

1

6

3

10

5

2

1

10

1

1

1

5,892

5,205

2,700

2,324

2,324

2,000

2,000

1,990

1,945

1,820

1,600

1,552

1,454

1,162

1,029

966

940

833

833

705

689

650

510

500

488

398

354

275

261

260

255

250

248

237

200

200

194

185

180

172

172

162

160

150

149

143

142

The major operators in the region (continued).


Hyatt Regency Sha´tin - Hong Kong

Kingland Serviced Apartments - Shanghai

Belgravia Serviced Apartments - Shanghai

Grand Mercure - Bangalore

CHI International

Eastern Garden Serviced Apartments -

Shanghai

Grand Hyatt Residences - Mumbai

Hundred Stay Shinjuku - Tokyo

Luminous Modern Universe Apartment

Hotel - Shanghai

World Union Serviced Apartments -

Shanghai

Flexstay Inn - Higashi Ueno, Tokyo

Leading Noble Suites - Shanghai

The Leela Kempinski - Gurgaon

Remington Hotel

8 on Claymore by Summit Serviced

Residences

99 Bonham - Hong Kong

Mayson Shanghai Pudong Serviced

Apartments

Shanghai ACME Expo Riverside Serviced

Apartments

Taj Wellington Mews - Mumbai

Lalco Residency - Mumbai

Ladoll Serviced Apartments - Shanghai

21 Whitfield - Hong Kong

V Causeway Bay - Hong Kong

The Jervois - Hong Kong

Four Points - Pune

Hyatt Park Plaza - Hyderabad

Park Hyatt Hyderabad

Skyla Serviced Apartments

Melange Lavelle - Bangalore

Grand Residency - Mumbai

Mandarin Oriental Guangzhou

V Wanchai

Hotel Cloud 9 Residency - Bangalore

The Lalit - Mumbai

Maple Suites - Bangalore

Royal Comfort Apartments (Bangalore)

D Habitat Serviced Apartments - Bangalore

Sheraton Nha Trang Hotel & Spa in Nha

Trang (new entry)

New World Group

Hyatt

Grand Mercure

Resorts World Manila

Preferred Hotel Group

V Hotels

Sheraton

Hyatt

Hyatt

Jones, Lang LaSalle

Mandarin

V Hotels

Starwood Hotels

1

1

1

1

1

4

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

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142

133

130

126

126

121

115

111

102

100

100

97

90

90

89

85

84

80

80

80

68

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54

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49

48

42

42

42

37

35

30

25

22

21

19

19

10

7

Rates

The spread, size and diversity of the Asiamarket is reflected in average servicedapartment rates. A studio apartment inBangalore, for example, costs theequivalent of EUR 41.48 per night for astay of up to one week, compared to EUR124 in Mumbai and EUR 144 in Hong Kong.

Over-supply in the Japaneseaccommodation market is reflected bythe average rate for the same size ofapartment and stay profile in Tokyo - EUR111. At the other end of the spectrum, thestrength of the Chinese economy isreflected in average rates of EUR 146 inShanghai.

Internationally, average rates comparefavourably with the US and Europe; $85 –245 compared to $85 – 200 and $70 –300 respectively



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INR 2,27

5INR 2,90

0USD

53.42

USD

41.38

27%

INR 2,72

5INR 3,40

0USD

62.63

EUR 48

.52

25%

INR 3,61

0INR 4,65

0USD

85.66

EUR 66

.36

29%

7 nights + (w

eekly rate)

INR 16

,000

INR 19

,050

USD

350

.41

EUR 27

1.34

19%

INR 20

,100

INR 23

,500

USD

432

.34

EUR 33

3.96

17%

INR 26

,200

INR 30

,000

USD

552

.66

EUR 42

8.27

14%

One mon

th + (mon

thly rate)

INR 46

,900

INR 54

,200

USD

996

.96

EUR 77

215

%INR 60

,200

INR 69

,500

USD

1,278

.62

EUR 98

7.18

16%

INR 82

,900

INR 85

,000

USD

1,565

.87

EUR 1,21

3.20

3%

3 mon

th + (mon

thly rate)

INR 44

,000

INR 51

,000

USD

938

.07

EUR 72

6.46

16%

INR 55

,000

INR 62

,000

USD

1,140

.62

EUR 88

0.65

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INR 74

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INR 76

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USD

1,400

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Ho

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HKD

1,450

HKD

1,450

USD

186

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EUR 14

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1,550

HKD

1,525

USD

196

.50

EUR 15

1.93

-2%

HKD

1,765

HKD

1,770

USD

228

.07

EUR 176.10

0%

7 nights + (w

eekly rate)

HKD

9,000

HKD

9,000

USD

1,159

.69

EUR 89

6.66

0%HKD

10,27

5HKD

10,00

0USD

1,288

.54

EUR 99

6.28

-3%

HKD

11,80

0HKD

11,50

0USD

1,481

.82

EUR 1154

.55

-3%

One mon

th + (mon

thly rate)

HKD

31,25

0HKD

31,00

0USD

3,994

, 48

EUR 3,08

8.46

-1%

HKD

40,00

0HKD

38,75

0USD

4,993

.10

EUR 3,86

0.58

-3%

HKD

43,00

0HKD

42,75

0USD

5,508

.57

EUR 4.25

7.86

-1%

3 mon

th + (mon

thly rate)

HKD

29,50

0HKD

28,75

0USD

3,704

.59

EUR 2,86

3.40

-3%

HKD

37,50

0HKD

37,00

0USD

4,767

.61

EUR 3,68

5.67

-1%

HKD

40,00

0HKD

39,50

0USD

5,089

.79

EUR 3,93

4.06

-1%

Mu

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INR 8,80

0INR 8,75

0USD

160

.88

EUR 12

4.28

-1%

INR 12

,400

INR 12

,500

USD

229

.84

EUR 17

7.56

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,150

INR 20

,000

USD

368

.53

EUR 28

5.42

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7 nights + (w

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INR 55

,000

INR 54

,100

USD

994

.68

EUR 76

8.46

-2%

INR 76

,000

INR 77

,000

USD

1,415

.83

EUR 1,09

3.75

1%INR 12

1,00

0INR 119,00

0USD

2,192

.73

EUR 1,69

8.26

-2%

One mon

th + (mon

thly rate)

INR 10

0,00

0INR 99

,000

USD

1,820

.32

EUR 1,40

6.23

-1%

INR 116,50

0INR 112,50

0USD

2,068

.58

EUR 1,59

8.01

-3%

INR 13

0,50

0INR 12

8,00

0USD

2,358

.57

EUR 1,82

6.60

-2%

3 mon

th + (mon

thly rate)

INR 91

,000

INR 88

,500

USD

1,627

.26

EUR 1,25

7.09

-3%

INR 10

4,00

0INR 10

1,00

0USD

1,857

.13

EUR 1,43

4.66

-3%

INR 116,00

0INR 114,00

0USD

2,099

.64

EUR 1,62

5.96

-2%

Sh

an

gh

ai


CNY 1,10

0CNY 1,175

USD

188

.95

EUR 14

6.04

7%CNY 1,42

0CNY 1,40

0USD

225

.13

EUR 17

3.93

-1%

CNY 2,00

0CNY 1,95

0USD

313

.61

EUR 24

2.28

-3%

7 nights + (w

eekly rate)

CNY 6,82

5CNY 7,00

0USD

1,125

.67

EUR 87

0.04

3%CNY 9,34

5CNY 9,60

0USD

1,543

.76

EUR 1,19

2.67

3%CNY 13

,020

CNY 14

,500

USD

2,332

.03

EUR 1,80

1.45

11%

One mon

th + (mon

thly rate)

CNY 26

,026

CNY 27

,800

USD

4,470

.51

EUR 3,45

5.30

7%CNY 34

,000

CNY 36

,000

USD

5,789

.09

EUR 4,47

2.50

6%CNY 44

,500

CNY 46

,000

USD

7,398

.16

EUR 5,71

4.96

3%

3 mon

th + (mon

thly rate)

CNY 24

,000

CNY 25

,800

USD

4,148

.89

EUR 3,20

6.69

8%CNY 32

,000

CNY 34

,000

USD

5,468

.09

EUR 4,22

4.44

6%CNY 40

,000

CNY 41

,800

USD

6,721

.84

EUR 5,19

2.31

4%

Sin

ga

po

re1-6 nights (nightly rate)

SGD 371

SGD 350

USD

279

.69

EUR 21

6.60

-6%

SGD 424

SGD 400

USD

319

.84

EUR 24

7.23

-6%

SGD 511

SGD 495

USD

395

.79

EUR 30

5.89

-3%

7 nights + (w

eekly rate)

SGD 1,860

SGD1,77

5USD

1,419

.31

EUR 1,09

7.20

-5%

SGD 2,375

SGD 2,300

USD

1,839

.03

EUR 1,42

1.60

-3%

SGD 2,850

SGD 2,750

USD

2,198

.84

EUR 1,69

9.38

-4%

One mon

th + (mon

thly rate)

SGD 7,750

SGD 7,500

USD

5,997

.09

EUR 4,63

6.06

-3%

SGD 8,840

SGD 8,700

USD

6,956

.32

EUR 5,37

7.34

-2%

SGD 9,500

SGD 9,000

USD

7,196

.14

EUR 5,56

1-5%

3 mon

th + (mon

thly rate)

SGD 7,260

SGD 7,000

USD

5,597

.28

EUR 4,32

6.29

-4%

SGD 8,600

SGD 8,400

USD

6,716

.44

EUR 5.19

0.82

-2%

SGD 9,000

SGD 8,675

USD

6,936

.28

EUR 5,36

0.19

-4%

To

ky

o1-6 nights (nightly rate)

JPY 13

,000

JPY 13

,750

USD

144

.53

EUR 111.70

6%JPY 17,000

JPY 17,000

USD

178

.71

EUR 13

8.13

0%JPY 23

,000

JPY 23

,300

USD

244

.88

EUR 18

9.35

1%

7 nights + (w

eekly rate)

JPY 72

,000

JPY 75

,000

USD

788

.37

EUR 60

9.30

4%JPY 94

,000

JPY 95

,000

USD

998

.67

EUR 77

1.89

1%JPY 11

8,00

0JPY 119,00

0USD

1,250

.65

EUR 96

7.07

1%

One mon

th + (mon

thly rate)

JPY 20

3,00

0JPY 20

6,30

0USD

2,168

.24

EUR 1,67

5.97

2%JPY 21

8,00

0JPY 22

0,00

0USD

2,312

.70

EUR 1,78

7.54

1%JPY 25

3,00

0JPY 25

4,00

0USD

2,669

.46

EUR 2,06

4.16

0%

3 mon

th + (mon

thly rate)

JPY 19

5,00

0JPY 19

8,60

0USD

2,087

.74

EUR 1,61

3.66

2%JPY 20

0,00

0JPY 20

3,00

0USD

2,133

.99

EUR 1,64

9.41

2%JPY 23

0,00

0JPY 23

1,00

0USD

2,427

.86

EUR 1,87

7.55

0%

Ra

tes

in k

ey

cit

ies


e rates an

d may vary per lo

catio

n, time of yea

r, region

al promotions

and

specific klen


ted are ba

sd on an

aerag

e 4 star exten


exclude

taxes. E

xcha

nge rates us

ed M

arch

201

3.

Fig 24

Cit

y r

ate

s a

na

lysi

s(Sou

rce: The

Apartm

ent S

ervice)

Quest Apartments is expanding intoregional locations in response tocorporates travelling more frequently,and staying away from home for longerperiods.

Paul Constantinou of Quest Apartmentssays that as long as this corporatedemand profile continues, “this is whereour business growth will be focussed."Ascott’s country general manager DeanMinett agrees. “It’s no secret that marketssuch as Perth are experiencing highdemand due to the resources boom andlimited room inventory in the market.

The news for the region’s servicedapartment sector is not entirely goodhowever. Global economic conditions area major challenge for the sector due tobanks’ continuing reluctance to funddevelopments. As Kieran Spencer ofPunthill says "a decline in apartment salespresents a significant threat to industrygrowth."

Fig 25 Guest types staying in Australian serviced apartments (Source: Ibis World 2011)Fig 25 Guest types staying in Australian serviced apartments (Source: Ibis World 2011)

Business

Holiday/Leisure

International Travellers

Government Sector

Other (inc. airline crewstopovers)

Total

50

32

8

5

5

100

Customer Type Proportion of TotalDemand

%

By the end of 2012, the top tenaccommodation operators accounted for40.3% of the total room supply inAustralia, catering to domestic businesstravellers who are staying away fromhome for longer and spending moremoney while they are away.

Corporate customers are increasinglydoing their business outside of major citycentres, gravitating towards regional andsuburban hubs where Governmentinfrastructure is supporting industrygrowth and development. In turn, this isdriving demand for extended stayaccommodation.

Melbourne is an example of this. Thecity now features in the EconomistIntelligence Unit’s survey of the world’smost attractive places to live and is oneof the fastest growing in Australia,predicted to overtake Sydney as thecountry’s largest city by 2050. As aresult, Melbourne is an attractiveproposition for investors who want tobuy in a sought-after city where valuescould quickly increase.

The tourism industry contributedAUS$34.55 billion, or 2.5% of GDP, to theAustralian economy in 2011. Year on yeargrowth is being driven mainly by thestaggering increase in internationalarrivals, from 300,000 to one billion inthe last 25 years.

Demand

Australian serviced apartments are inhigh demand and short supply; a trendthat shows no sign of slowing.

In 2012, the total number of domesticovernight trips grew by 5.8% comparedto 2011; the total number of visitor nightsgrew by 6.7% and visitor expenditureincreased by 17.5%.

As a consequence of this and otherfactors, demand for qualityaccommodation is burgeoningnationwide - stimulated by growth inagriculture, telecommunications,construction and mining. The region hasalso witnessed significant investment inmajor education, health andadministration facilities from both thepublic and private sectors.

Australasia


Raising the money to build anaccommodation facility, land availabilityand competition from alternative usessuch as office space, provide furtherobstacles.

Serviced Apartments now represent 25%of the total accommodation market inAustralia - up from just 10% in 1999.And despite the challenges, this figurewill rise to 30% in the coming years.

In line with a positive earnings trend,serviced apartments have attracted agrowing share of the accommodationmarket and generate over AUS$2 billionin revenues.

Rates & RevPAR

Average room rates and RevPAR havebeen, and are forecast to continue, togrow strongly and outpace inflationforecasts. Leading economic forecasters,Deloitte Access Economics predicts thatnational RevPAR will grow by 4.3% overthe next three years.

Opportunities are abundant and yet,after more than a decade of on-going,consistent growth, serviced apartmentroom supply declined in 2012.

Operators faces challenges such asrestrictive local planning schemes,arduous processes and a lack ofunderstanding around investmentmodels (where developers can invest butdo not have to operate the facility). This isstalling major supply increases across thecountry.

Market

Deloitte Access Economics Report Q1 2013 ReportForecast (p/a over next three years)

%�Growth�inOccupancy��

%�Growth�in�ARR

%�Growth�inRevPAR

Sydney Metro

Melbourne Metro

Brisbane Metro

Perth Metro

Adelaide Metro

Canberra Metro

Darwin Metro

0.9%

1.2%

0.5%

0.5%

0.0%

1.0%

0.0%

3.8%

4.3%

5.7%

9.3%

2.9%

3.5%

3.9%

4.7%

5.5%

6.2%

9.8%

3.0%

4.5%

3.5%

Fig 26 Tourism & Hotel Market Outlook 2012 (Source: Deloitte)

Fig 27 Share of accommodation market by revenue (Source: ABS, Atchison Consultants)Fig 27 Share of accommodation market by revenue (Source: ABS, Atchison Consultants)

Hotels

Motels

Serviced Apartments

Total

53

33

14

100

49

27

24

100

48

26

26

100

Period March 1998%

March 2005%

March 2011%


Key players

The Australian serviced apartments sectoris predicted to outperform the hotelsector over the next three years,according to Atchison Consultants. Thefirm forecasts investor returns of between13% and 15% per annum compared to10% - 11% per for hotels.

A separate report by Jones Lang LaSalleHotels says that 3,712 hotel rooms wereunder construction in September 2012 ofwhich a third were serviced apartments,but adds that serviced apartments willhave to show a positive yield for at leastthree years to tempt back investors.

Nevertheless Australia’s servicedapartment sector is attracting newinvestors and is benefitting fromincreasing numbers of business travellersto Australia. International arrivals rose by10% in 2011 and Atchison Consultantsestimates that business travellers accountfor 50% of guests who stay in servicedapartments, attracted by the lower costscompared to hotels.

The sector is highly fragmented, and nosingle player has a significant marketshare. While the sector dates back to the1970s, the real growth spurt occurred inthe build-up to the Sydney Olympicswith the number of establishments with15 rooms or more growing from 479 in1998 to 973 by March 2011. The biggestplayers, after Quest, are Oaks Hotels andResorts, the Mantra Group and Mirvac(now part of Accor) (3.2%).

New Zealand

The region has traditionally experiencedsluggish growth in demand foraccommodation, reflective of theprolonged and subdued nature of thedomestic economy and declininginternational visitor numbers. As a result,the market is dominated by 3-4 starmotels, with limited alternative hotelaccommodation.

The Christchurch region is nowsignificantly undersupplied due todestruction caused by the 2011earthquake. There are increasingnumbers of contractors travelling to thecity for work associated with the re-build,

and therefore demand for new, qualityaccommodation for business travellers isnow growing.

In Wellington, growth in both supply anddemand are slow – though the existingaccommodation in this area is no longermeeting business travellers’ needs. InAuckland, visitor nights are growing at anaverage of 3-4% per annum, with themarket expected to be significantlyundersupplied within 3-4 years.


Quest World Square, Haymarket

We work directly with corporates andtheir travellers to develop betterrelationships and greater understandingof serviced apartments. We deal withTMCs too but they provide an extra linkin the chain that has to be managed, andthe churn of clients between TMCs makesthe management of these ‘trade’relationships much tougher.

Online travel agents (OTAs) are arelatively new, but growing phenomenonin the supply chain, mostly in the leisuremarket. There are two problems herefrom our perspective; first, smalleroperators tend to use these sites to dumpinventory, which undermines theintegrity of our pricing models. Second,you can’t form any relationship with thecustomer, so the transaction becomespurely about the price. Commoditising aproduct diminishes profitability, andoperators have to ask themselves whetherthere are the customers they really want.

Product education is just one of threeprincipal challenges facing servicedapartment operators in Australia. Thedifficulties operators encounter raisingthe necessary capital for their projectsreflects Australasia’s financial markets’lack of understanding of servicedapartments. This also explains in partwhy hotels are not growing in Australia atthe same rate they are doing around theworld. And when you do get thefunding, the next problem is obtainingthe right planning to make the projecthappen.

In this market the brand is all powerful;however you have to make sure that theinvestment in the brand delivers clarityback to customers. The first priority is toget local customers to understand yourbrand and make it feel that it is theirbrand. We did this successfully in NewZealand where we initially struggled toget traction. Brand is the essence of longterm sustainability.

Looking to the future my hope is that wesee continued investment in the servicedapartment industry. I also hope that theentire accommodation industry becomesless fragmented. Right now, hotels seeserviced apartments as trying to stealtheir business but we need their

knowledge and understanding of thehospitality industry. Hotels will always killus for experience but serviced apartmentscan deliver the privacy and space to allowcustomers get the job done.

My greatest fear is the global businessmarket. Asia has a massive influence onAustralian market performance so we willbe vulnerable if the Asian market is hit byunforeseen factors. We need confidencein the business market, and I’m pleasedto see that corners are slowly beingturned in the UK and US. Above all, wemust avoid negative confidence.

Market perspective

Despite starting Quest 25 years ago I amstill enthused about the potential for theserviced apartment market, especially interms of what the apartment offering isand the benefits to the customer. Whoknows, we may even get a commondefinition of what constitutes a servicedapartment one day!

In recent years Australia has becomede-centralised; former regional towns arenow regional cities, and the lack ofaccommodation in these areas is beingaddressed by serviced apartments ratherthan mainstream hotels. AlthoughAustralia has major international centres,the hotel chains tend to be concentratedin the main cities.

As it has in other global regions,educating travellers and travel managersabout serviced apartments has been aslow process, partly because theterminology has been hard for corporatesto grasp. Demand for servicedapartments is being driven by theextended stay market, where demandhas grown by 30% due to companiesexpanding and more consultants findingthemselves on the road to service theircustomers.

More short-term contract workers isanother factor driving demand, withAsian and Indian IT consultants cominginto Australia, as well as from the US. Ourproduct is perfect for these customersbecause so many of them are familiarwith the serviced apartment productfrom The Ascott, Frasers and otherleading operators. They are an educatedmarket, which makes it easy to dobusiness.

The business mix in Quest Apartments is80/20 in favour of corporates. Our leisurebusiness is mainly for those visitingfriends and relatives or attending majorsporting events like the F1 Grand Prix.When corporates are in town for a longperiod they bring their families too.

By Paul Constantinou Chairman, Quest Apartments


Paul Constantinou

Supply

Our research has highlighted 57,220serviced apartments in 1,104 locationsacross Australasia. Based on our estimatesof the world’s total supply of servicedapartments, Australasia houses 8.72% ofthe global serviced apartments market, and12.54% of the world’s serviced apartmentlocations.

Based on these figures, regional supply hastherefore increased by 14.5% since 2011.

Rates

Serviced apartment rental rates in Australiaand New Zealand are the most expensive inthe Asia Pacific region, ranging fromAUS$110 – 200 per night for a studioapartment to AUS$180 – 275 for a twobedroomed apartment.

Within the region itself, there is also asignificant difference in average ratesbetween Sydney and Auckland; a studioapartment in the former costs almost 50%more than the same size of apartment inthe New Zealand capital.


Mantra Group (formerly Stella Hospitality)

Other

Quest Serviced Apartments

Oaks Apartments

Mercure Australia

Meriton Serviced Apartments

Adina Apartment Hotels

Mirvac

Waldorf Serviced Apartments

Quest Serviced Apartments - New Zealand

and Fiji

Punt Hill Serviced Apartments

Somerset

Corporate Keys

Medina Serviced Apartments

Fraser Suites

Astra Apartments

Best Western Australia

Central Group

Q Resorts

Fraser Place

Clifton on Northbourne - Canberra


VR Hotels

The York

Apartments by Nagee - Canberra

Sheraton Mirage Port Douglas

Kingston Terrace (Canberra)

Terrace Villas (new entry)

Park Squire Motor Inn & Serviced

Apartments

Quest

Accor

Toga Hospitality

Accor

Quest

The Ascott Ltd.

Toga Hospitality

Frasers Hospitality

Prime Group of

Companies

Frasers Hospitality

The Ascott Ltd.

Swiss Belhotels

Sheraton (Starwood)

130

556

120

38

40

11

26

36

27

35

15

3

1

4

2

17

19

4

4

1

1

1

7

1

1

1

1

1

1

13,600

13,457

6,786

4,432

4,173

2,674

2263

2,000

1,900

1,415

707

534

500

350

320

309

300

280

233

158

153

128

116

110

90

90

74

50

18


AU

ST

RA

LA

SIA

ST

UD

IOO

NE

BE

DR

OO

MT

WO

BE

DR

OO

M

20

10

/1

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te2

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2/

13

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20

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13

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20

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Yo

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Lo

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US

$E

uro

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Lo

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S$

Eu

ro%

Lo

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lcu

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US

$E

uro

Au

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NZD

115

NZD

145

USD

119

.60

EUR 92

.56

26%

NZD

158

NZD

175

USD

144

.37

EUR 111.70

11%

NZD

210

NZD

225

USD

185

.78

EUR 14

3.74

7%

7 nights + (w

eekly rate)

NZD

750

NZD

900

USD

742

.32

EUR 57

4.49

20%

NZD

900

NZD

1,100

USD

907.46

EUR 70

2.12

22%

NZD

1,210

NZD

1,375

USD

1,135

.31

EUR 87

8.42

14%

One mon

th + (mon

thly rate)

NZD

2,910

NZD

3,100

USD

2,556

.88

EUR 1,97

8.81

7%NZD

3,550

NZD

3,720

USD

3,068

.88

EUR 2,37

6.53

5%NZD

4,700

NZD

4,900

USD

4,045

.83

EUR 3,13

0.37

4%

3 mon

th + (mon

thly rate)

NZD

2,750

NZD

2,950

USD

2,433

.16

EUR 1,88

2.97

7%NZD

3,250

NZD

3,400

USD

2,807.31

EUR 2,17

2.09

5%NZD

4,350

NZD

4,500

USD

3,715

.56

EUR 28

74.83

3%

Sy

dn

ey


AUD 148

AUD 172

USD

178

.48

EUR 13

8.04

16%

AUD 190

AUD 210

USD

217.92

EUR 16

8.53

11%

AUD 285

AUD 313

USD

324

.82

EUR 25

1.24

10%

7 nights + (w

eekly rate)

AUD 779

AUD 950

USD

985

.82

EUR 76

2.42

22%

AUD 872

AUD 1,000

USD

1,037.76

EUR 80

2.69

15%

AUD 105

8AU

D 1,200

USD

1,245

.31

EUR 96

3.23

13%

One mon

th + (mon

thly rate)

AUD 2,750

AUD 3,000

USD

3,113

.11

EUR 2,40

7.64

9%AU

D 3,020

AUD 3,200

USD

3,320

.82

EUR 2,56

8.60

6%AU

D 369

3AU

D 3,875

USD

4,021

.31

EUR 3,111.97

5%

3 mon

th + (mon

thly rate)

AUD 2,500

AUD 2,800

USD

2,905

.57

EUR 2,24

7.13

12%

AUD 2,725

AUD 2,900

USD

3,009

.49

EUR 2,32

7.80

6%AU

D 331

0AU

D 3,400

USD

3,528

.48

EUR 2,73

0.50

3%

Ra

tes

in k

ey

cit

ies


e rates an

d may vary per lo

catio

n, time of yea

r, region

al promotions

and

specific klen


ted are ba

sd on an

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e 4 star exten


exclude

taxes. E

xcha

nge rates us

ed M

arch

201

3.

Fig 28

Cit

y r

ate

s a

na

lysi

s(Sou

rce: The

Apartm

ent S

ervice)

53

Central& South America

South America’s economic growth andincreasing stability has created apromising business climate in the region.The development of the main cities hasalso thrown up compelling investmentopportunities.

However, the picture in each of theregion’s countries is not consistent.Whilst nations integrated to the financialmarkets of South America such as Brazil,Chile, Colombia, Peru and Uruguay haverecovered steadily from the recession,they struggled until 2011. Since then,raw-material exporters such as Argentina,Bolivia, Ecuador, Paraguay and Venezuelahave also grown.

involvement of well-known brands likeHilton, who opened the 245-room HiltonBogota.

Many major hotel brands are active inSouth America. Some, like Hilton, IHGand Accor are focussing on thecondohotel concept but no longer try tolabel them ‘apartment hotels’ as they didin the early 2000’s.

Argentina and Chile are set for large-scaleexpansion of hotel supply, althoughcommentators believe that it will besome time before they are on a par withother emerging markets.

The condohotel concept is popular in theregion and is being deployed to grow thedeveloping markets in Colombia,Uruguay and Argentina.

A condo hotel, also known as a hotel-condo or a Condotel, is a building usedas both a condominium and a hotel.Condo hotels are typically high-risebuildings developed and operated asluxury hotels. They have condominiumunits which allow someone to own afull-service home which, when not inuse, can be rented out.

Condo hotels are popular amongst‘capital-challenged’ developers and havealso returned to the Brazilian marketthanks to greater regulation and the

Demand

In terms of hospitality industryinfrastructure, Latin America remainsfragmented, composed mainly ofindependent hotel operators, althoughthe major chains view Argentina andChile as regions in which there issignificant scope for expansion.

The key source markets for business travelto this region are the US, Canada,Australia and Germany. Some majorinternational airlines have directconnections to either the US or Europe,but long-haul tourism is neither easy norcheap, limiting the hotel sector’s growthpotential.

Over the last three years RevPAR hasincreased in Buenos Aires, Santiago andthe Uruguayan capital Montevideo,driven by increased occupancy. As withother regions demand has outstrippedsupply. For example, during 2011/12supply in Buenos Aires increased by2.1%, whilst demand leapt by 7.2%.

Summit Residences, Mexico City


Fig 29 Key cities annual occupancy (Source: STR Global)Fig 29 Key cities annual occupancy (Source: STR Global)

20112011

20102010

20092009

0.00.0 20.020.0 40.040.0 60.060.0 80.080.0

MontevideoMontevideo

Santiago de ChileSantiago de Chile

Buenos AiresBuenos Aires

But, with the next World Cup andOlympics events taking place in Brazil,and the economic expansion of theregion, South America is becoming morepopular with corporates and ex-pats andthe region’s serviced apartments sector isset to be transformed too, especially inthe main cities for business related stays.These are:

Argentina Buenos Aires

Brazil Sao Paulo, Rio de Janeiro, Curitiba, Porto Alegre

Chile Santiago

Columbia Bogota

Mexico Guadalajara

Uruguay Montevideo

Local corporates are now looking at waysto cut accommodation costs, so the

Serviced Apartments

The serviced apartments industry isrelatively new in Latin America, havingonly begun to establish itself in the last 5�-7 years. The market is dominated bylocal providers and, inevitably, theserviced apartment product varies greatlyacross the region.

Some countries struggle to service ormaintain their apartment stock, which ismade up mainly of older and poorlyconstructed buildings with small squarefootage and space, amenities are limitedand the provision of both housewaresand furnishings is inconsistent.

On-site or in-suite laundry is uncommon,and the photographs of apartments usedin many serviced apartment brochuresand websites are not always the actualproduct. Trusted on-the-groundrepresentation is critical for corporatesconsidering housing their personnel inserviced apartments in this region.

serviced apartment industry is starting toappeal to them. However supply islimited, even in major cities like Rio deJaneiro and Santiago.

As a new industry, corporates are not yetaccustomed to the serviced apartmentproduct so ex-pats and in-boundassignment workers form the backboneof apartment users. This should changein the next two to three years ascorporate demand and supply grow andnew operators come into the sector tochallenge the main hotel brands andlocal independents that currentlydominate.


Brazil

In early 2012 Brazil became the world’ssixth largest economy with a GDP of$2.52 trillion.

Occupancy, average daily rates andRevPAR are growing across Brazil’s hotelindustry, which generated record profitsfor operators in 2012 – 36% of totalrevenue. This, coupled with the majorinternational events being staged in Braziland growing international investment inLatin America has made Brazilian hotelsan attractive investment option.

Nevertheless there is an imbalancebetween supply and demand. Brazil’s10,000 hotels and 500,000 rooms hostedmore than 5.4 million internationaltourists in 2011. Yet only 238 hotelprojects are planned for the period to2015, adding a further 38,854 rooms.

Chile

In common with the rest of the region,business tourism is growing in Chile,especially in Santiago. As a result therange of accommodation available totravellers has been increasing year-on-year, especially for aparthotels, inSantiago and the other main cities ofConcepcion, Antofagasta, Puerto Monttand Copiapo.

In Santiago’s serviced apartmentcommunity, the average stay is 4 - 5nights, an increase on previous years, andthe proportion of corporates to leisuretravellers is increasing too. According tolocal operators, most bookings comefrom the international booking portalsrather than directly with the operators,reflecting the lack of awareness ofserviced apartment locations in Chile.

Operators are preparing for futuregrowth by refurbishing their apartments,investing in technology to improvedistribution and providing better guestcare in order to improve their competitiveedge against hotels.

The biggest barrier to growth in servicedapartments in Chile is once again that ofeducating prospective users on theconcept and benefits of using anaparthotel. Local rules for accreditationhave just been introduced.

Columbia

In Colombia, traditional hotel rooms arewidely used to service the relocationmarket. The main cities for businessrelated stays are Bogotá, Medellín, Caliand Barranquilla and Cartagena.

The local serviced apartments market isemerging thanks largely to hoteloperators adding aparthotels to theirportfolios for which ex-pats are theprimary consumers. By contrast, inArgentina the main option to hotels aredirect private lettings on fully furnishedapartments.

Colombia’s development is attractinginvestors and business travellers withshort and long term accommodationneeds.

The serviced apartment sector ispredicted to grow tremendously over thenext two years as corporations beginoperating in Columbia.

Supply

Our research has highlighted 6,115serviced apartments in 65 locations inCentral and South America. Based onour estimates of the world’s total supplyof serviced apartments, the region

accounts for just 0.9% of the globalserviced apartments market in 0.73% ofthe world’s serviced apartment locations.

Rates

Average serviced apartment rental ratesvary between the different countries inthe region. In Buenos Aires, a studioapartment costs around EUR 45.58 pernight for a stay of up to one week,compared to EUR 67.90 in Rio de Janeiroand EUR 87.50 in Sao Paolo. This reflectsthe growing appeal of Brazil in this region.

Internationally, average rates are amongstthe lowest in world, beaten only by Indiafor studio apartments. However at two-bedroom apartment level rates rival thoseof European operators.

“There is still great roomfor growth in Brazil’shotel supply, especiallyoutside of the majorcities. Unlike past WorldCup and Olympics hostcities, we expect SãoPaulo and Rio de Janeiroto absorb supplyadditions more easilyand maintain demandwell past the games,given the cities’deficiency in supplyfrom the get-go.”

says Manuela Gorni, SeniorVice President of Jones LangLaSalle Hotels in São Paolo.


Othon World Hotels, Brazil


Mercure

Othon Suites – Brazil

LOI Suites (Argentina/Brazil)

Temporary Apartments – Buenos Aires

Dazzler Suites – Buenos Aires

Brasiliana Santana Gold Flat – Sao Paulo

Live Skyline (Brazil)

Augusta Park Suite Hotel – Sao Paulo

Aparthotel Cabildo Suites – Buenos Aires

Hollywood Suites & Lofts – Buenos Aires

Ayres de Ricoleta – Buenos Aires

Ayres de Libertad – Buenos Aires

Alameda Aparthotel – Sao Paulo

Oscar Freire Imovel Total

25

15

5

4

3

1

5

1

1

1

1

1

1

1

2,607

2,434

332

160

144

96

90

54

48

41

38

30

28

13

SO

UT

H A

ME

RIC

A

ST

UD

IOO

NE

BE

DR

OO

MT

WO

BE

DR

OO

M

20

10

/1

1ra

te2

01

2/

13

ra

teY

oY

va

ria

nce

20

10

/1

1ra

te2

01

2/

13

ra

teY

oY

va

ria

nce

20

10

/1

1ra

te2

01

2/

13

ra

teY

oY

va

ria

nce

Lo

cal

curr

en

cyL

oca

lcu

rre

ncy

US

$E

uro

%L

oca

lcu

rre

ncy

Lo

cal

curr

en

cyU

S$

Eu

ro%

Lo

cal

curr

en

cyL

oca

lcu

rre

ncy

US

$E

uro

%

Bu

en

os

Air

es


ARS

250

ARS

300

USD

58.86

EUR 45

.58

20%

ARS

340

ARS

420

USD

82.39

EUR 63

.66

23%

ARS

500

ARS

575

USD

112

.79

EUR 87

.13

15%

7 nights + (w

eekly rate)

ARS

1,600

ARS

1,875

USD

367

.79

EUR 28

4.03

17%

ARS

2,210

ARS

2,500

USD

490

.39

EUR 37

8.81

13%

ARS

3,200

ARS

3,400

USD

666

.93

EUR 51

5.18

6%

One mon

th + (mon

thly rate)

ARS

6,840

ARS

7,100

USD

1,392

.70

EUR 1,07

5.53

4%ARS

7,345

ARS

7,600

USD

1,490

.78

EUR 1,15

1.57

3%ARS

8,400

ARS

8,650

USD

1,696

.75

EUR 1,311.10

3%

3 mon

th + (mon

thly rate)

ARS

6,445

ARS

6,700

USD

1,314

.24

EUR 1,01

5.25

4%ARS

6,610

ARS

6,900

USD

1,353

.47

EUR 1,04

5.51

5%ARS

7,650

ARS

7,875

USD

154

4.73

EUR 1,19

3.63

3%

Rio

de

Ja

ne

iro


BRL 14

0BR

L 174

USD

87.69

EUR 67

.90

24%

BRL 21

5BR

L 26

0USD

131

.08

EUR 10

1.28

21%

BRL 24

5BR

L 31

0USD

155

.72

EUR 12

0.37

26%

7 nights + (w

eekly rate)

BRL 84

0BR

L 1,10

0USD

553

.95

EUR 42

8.15

30%

BRL 1,35

0BR

L 1,57

5USD

794

.04

EUR 61

3.53

17%

BRL 1,50

5BR

L 1,90

0USD

954

.40

EUR 73

7.69

26%

One mon

th + (mon

thly rate)

BRL 3,30

0BR

L 3,75

0USD

1,888

.46

EUR 1,45

9.60

14%

BRL 4,75

0BR

L 5,10

0USD

2,568

.31

EUR 1,98

57%

BRL 6,30

0BR

L 6,80

0USD

3,415

.73

EUR 2,64

0.17

8%

3 mon

th + (mon

thly rate)

BRL 3,00

0BR

L 3,30

0USD

1,661

.84

EUR 1,28

4.45

10%

BRL 4,30

0BR

L 4,75

0USD

2,392

.05

EUR 1,84

8.77

10%

BRL 5,80

0BR

L 6,10

0USD

3,064

.11

EUR 2,36

8.24

5%

Sa

o P

au

lo1-6 nights (nightly rate)

N/A

BRL 22

5USD

113

.30

EUR 87

.50

N/A

BRL 30

0USD

151

.07

EUR 116.66

N/A

BRL 37

5USD

188

.84

EUR 14

5N/A

7 nights + (w

eekly rate)

N/A

BRL 1,20

0USD

604

.29

EUR 46

6.65

N/A

BRL 1,90

0USD

956

.80

EUR 73

8.86

N/A

BRL 2,40

0USD

1,208

.59

EUR 93

3.41

N/A

One mon

th + (mon

thly rate)

N/A

BRL 4,75

0USD

2,391

.99

EUR 1,84

7.17

N/A

BRL 6,50

0USD

3,273

.35

EUR 2,52

7.70

N/A

BRL 8,00

0USD

4,028

.63

EUR 3,112.62

N/A

3 mon

th + (mon

thly rate)

N/A

BRL 4,50

0USD

2,266

.10

EUR 1,74

9.94

N/A

BRL 6,00

0USD

3,021

.46

EUR 2,32

3.36

N/A

BRL 7,50

0USD

3,776

.84

EUR 2,91

7.80

N/A

Ra

tes

in k

ey

cit

ies


e rates an

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catio

n, time of yea

r, region

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and

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Fig 30

Cit

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Apartm

ent S

ervice)

57

GBTA says that Germany will see thebiggest increase in business travel spendat 5% in 2013 alone. By comparison, theUK will see a 1.9% growth, but elsewherethe picture is less rosy. Business travelspending levels in France, Spain and Italyis predicted to fall by 1.4%, 6.2% and2.9% respectively.

However, the association also says that2014 will see the five key Europeanbusiness travel markets (Germany, theUK, France, Italy and Spain) returning togrowth thanks to increased internationaloutbound travel as trade levels recover.

Europe’s hotel industry is keeping pacewith the worldwide expansion in supply.There are currently more than 1,180 newfour and five star hotels in the pipeline,compared to 1,700 in Asia and just 450in North America (source:www.tophotelprojects.com).

Amongst the largest projects is theAndermatt Swiss Alps development inSwitzerland, which will include the 299million Swiss francs Chedi hotel.Northern Spain will house the new Gran

Demand

The Global Business Travel Association(GBTA) predicts that overall spend willgrow throughout 2013 across most ofdeveloped Europe, fuelled by risingdomestic business travel expenditure.

Europe

1,6001,600

1,4001,400

1,2001,200

1,0001,000

800800

600600

400400

200200

00

Man

ufac

turin

gof

che

mic

als

Man

ufac

turin

gof

che

mic

als

$US

billi

on(2

011

pric

es)

$US

billi

on(2

011

pric

es)

Aut

omot

ive

man

ufac

turin

gA

utom

otiv

em

anuf

actu

ring

Com

mun

icat

ion

serv

ices

Com

mun

icat

ion

serv

ices

Trav

el &

Tour

ism

Trav

el &

Tour

ism

Educ

atio

nEd

ucat

ion

Fina

ncia

lse

rvic

esFi

nanc

ial

serv

ices

Min

ing

Min

ing

Fig 31 Europe direct GDP by industry (Source: World Travel & Tourism Council)Fig 31 Europe direct GDP by industry (Source: World Travel & Tourism Council)

Travel and tourism delivered 7.9% ofEurope’s entire GDP in 2011, directlyemploying 10 million people andsustaining 28 million jobs. Employmentin the travel industry is predicted to growby 1.2% per annum over the remainderof the decade, more than any othersector of the economy.


Marie Hickey, Associate Director at Savillssaid: “London’s under-supply becomesmore pronounced when taking intoaccount business visitor numbers, thetraditional users of serviced apartments.New York and Hong Kong have 5.2 and5.3 units per 1,000 visitors respectivelywhilst London has just 1.2 units.”

Germany

The German serviced apartment industryhas seen overnight stays grow by 30% inrecent years, especially in cities such asBerlin, Dusseldorf, Hamburg andMunich.

With approximately 50 properties, Berlinis the serviced apartment capital ofGermany although the overall Germanmarket is reckoned to house 15,000 -25,000 serviced apartment units.However the serviced apartmentindustries in Germany, Austria andSwitzerland are all looking to expandtheir long-stay capacities.

UK

The UK’s Association of ServicedApartment Providers’ (ASAP) report thatthe average weekly rental figure forLondon for 2012 was £1105 – up 17%on 2011- and £606 outside London.Occupancy was down 1% in London at83%, compared to 79% (up 1% on 2011)in the regions. October was the sector’sbest month, with occupancy at 89% forLondon and 82% in the regions.

There is considerable optimism amongstUK apartment operators. ASAP reportsthat 74% of members expect business toincrease during 2013; of those, 50%expect an increase of up to 10% this yearand 20% expect an increase of over 10%.59% of ASAP members increased theirrates in 2013 with 32% holding their2012 rates.

Many ASAP members are growing theirbusinesses by introducing new servicessuch as earlier check-in and later check-out times; discount vouchers for localrestaurants, continental breakfast andso on.

Corporate confidence in the Londonmarket is high thanks to travel managersand travellers embracing the costbenefits of apartments as an alternativeto hotel stays.

Currently, the majority of servicedapartments are concentrated in the WestEnd, the City and Canary Wharf, but inthe last 18 months demand has grownfor apartments in smaller, suburbanlocations like St Albans, Heathrow,Stratford-Woking-and Windsor.

All lie within easy commuting distance ofboth London and the out-of townbusiness parks. Windsor is a perfectalternative to Slough, while St Albansattracts those working in north Londonand the surrounding areas of Luton,Hatfield and others.

However research by Savills suggests thatdemand is still outstripping supply.Savills estimate that London has apotential capacity for 16,300 servicedapartment units, and that this wouldrequire a 200% increase in inventory.

Scala tourism hub, located betweenZaragoza and Barcelona, which willeventually house 70 hotels, 32 casinos,five theme parks and apartments for upto 100,000 residents.

Hotel sector

The European hotel industry postedmixed results in 2012, according to STRGlobal. But although overall occupancywas up only marginally at 66.2% over theyear, December 2012 saw Europeanhotels declare their highest increase inoccupancy for the year – 2.8%.

The biggest winners during 2012occupancy-wise were Reykjavik (up12.7% to 70.3%), followed by Bratislava(up 10.4% to 51.4%). The biggest loserwas Athens (down 10.5% to 53.1%).

STR predicts continued rate growth in26 of the 38 European markets, butdeclining occupancy in 19 Europeanmarkets during 2013.

Serviced apartments

The European serviced apartmentsmarket is the 2nd largest in the worldafter the US. A mix of serviced apartmentproducts have co-existed for the last 15 –20 years, creating an array ofinternational, regional and localoperators supported by specialistbooking agencies.

Serviced apartment stock in Europe is amixture of old and new stock, althoughthe arrival of the branded operators hasbrought greater investment in newproduct, especially in London where the2012 Olympics proved an effective driverof new supply.

The principal concentrations of servicedapartments in Europe lie in the businesshubs of London, Paris, Geneva, Dublin,Brussels and Berlin. Yet, like so many ofthe other global regions, the servicedapartment product in these locationsvaries according to the respectivenational standards.


Grosvenor House, London

Spain

Spain is a relatively new market forserviced apartments because the conceptis virtually unknown. Traction is likely toarrive when Spain has recovered from therecession, but in the meantime hotels arethe main accommodation provider forbusiness travellers. Most of the bigcompanies in Spain work with a TMC, forwhom hotels are the easy option in termsof technology, rates and income.Companies are now including servicedapartments in their corporate travelprogrammes but are adapting hotel-oriented booking process, which makes itharder to understand serviced apartmentoperators’ terms and conditions.

In the wake of Spain’s financial crisis,many investors have been left withproperties they cannot sell. One solutionhas been to turn them into servicedapartments; as a result, there is nowplenty of supply at relatively low rentalrates.

As Andres Garcia General Manager atMadrid Rental Flats says, “in Madrideverything is so complicated. The averageprice keep going down and there is a pricewar between operators. Hotels are nowgiving corporate rates that undercut us.”

On the downside there is still a lack ofproduct awareness about the servicedapartment concept. Brands will help toaddress that need but there is someconfusion due to the different namesapplied to serviced apartments, such asextended stay, aparthotels and boardinghouses. We need simpler and clearercommunication and terminology.

There are also technology limitations tothe future growth of extended stay. Forexample, last year Adagio launched along stay website but the GDS cannotprocess a booking if one night is notavailable. Another challenge is that ratesfor longer stays tend not to be availableonline.

Future growth for this sector in Europewill come from both the business orleisure segments. There is a lot ofoverseas and long haul leisure business inthe destinations Adagio services,especially from Brazil. Internationalmobility relocation will grow too,especially with Indian IT specialistsrelocating to Europe.

In the short term the economic downturnin key European countries is a majorissue; travel budgets are still underpressure. Mid to long term there is still todo educating the consumer, especially inthe leisure market.

Market perspective

Corporates’ extended stay requirementsare growing and many companies aremanaging this demand within their travelprogrammes. In some countries, such asFrance, corporates have integratedaccommodation for assignment workinto their programmes, adapting the RFPprocess to cover extended stay.

However many Travel Managers remainunaware of their company’s extendedstay volumes. In 2012 Adagio did someresearch in Germany to quantify thepotential for extended stay. Whilst 20% ofthose interviewed have centralised theirbuying to cover extended stay, theopposite was the case for 26% oforganisations, where responsibility wasspread across project management andHR, leaving the travel manager unawareof the volumes involved. This highlightsthe fact that extended stay is not yet amajor focus for many corporates.

Although one of the key markets forserviced apartments is Germany, this isstill relatively under-developed, as isBelgium. At Adagio we have had greatsuccess with our properties in Cologne,Geneva, Vienna and other key capitals.

When we are evaluating a potentialdevelopment our development teamconsiders multiple criteria including thelocal economy and each market sectorincluding leisure. For example, 45% ofthe guests staying at our Liverpoolproperty are from outside the UK. If alocation is really good the presence of acompetitor will help.

Whilst UK and US companies work withrelocation agents, this category ofintermediary is less prominent in otherEuropean countries where individualagents do operate but do not bookapartments. In Europe extended staybookings are fulfilled locally by phone.

By Vangelis Porikis Director, Central & NorthernEurope, Adagio S.A.S.


Vangelis Porikis

The Eurozone crisis is an on-goingchallenge with flat growth ratesimpacting on the leisure market inparticular so I see future growth comingfrom the corporate market where there’sa great opportunity to grow the business.

There’s a lot of residential stock thatwould benefit from being turned intoserviced apartments. However there’salso a danger of unprofessional operatorscoming in and damaging the reputationof the sector. Property-focussedentrepreneurs are not geared to thissector; we are hoteliers first and run ourapartments in the same way.

I also believe that there could becasualties in London from our sector,where the post-Olympic blues are alreadyin full swing. This doesn’t apply toDublin where the market is not asmature. Outside London in the UK thereis over-supply in some cities, which willmake it more challenging still.

Market perspective

The development of the servicedapartment segment in Europe is excitingbecause the customers are getting moreand more aware of our product. They arerealising that there is not only analternative to a regular hotel room forextended stays. A while ago one of ourguests said to me: "I would not usescissors to cut my lawn. So why should Istay in a hotel room for a month?"

The providers are reacting and there aremany new openings of servicedapartments throughout Europe. Theportfolio is growing. Unlike the hotelmarket there is a better chance to berecognized because of the service rangeand solutions to compensate a long timeaway from home that are being offered,not only by the price. This means ofcourse a wide selection for the client tochoose from.

And because the new providersareinvesting in marketing, we are seeinggreater and better understanding of theproduct amongst customers.

Market perspective

The Prem Group has been running at90% occupancy for the last 3 years, whichis above average for the UK. Our problemhas been rate pressure although, havingbeen at its worst level in 2010, RevPAR isgrowing in Dublin, which reflects thetrends in the local hotel sector.

Our customer base is predominatelycorporate and assignment or project-related and is therefore so very muchlong stay, however this is complementedby a strong year-round leisure market androbust events market too. Dublin hasinvested in its infrastructure with theConference Centre and O2 arena; thereare now more corporates with EuropeanHQs in Dublin such as Google, so thedemand for extended stay has growntremendously.

At our provincial UK locations occupancyhas consistently reached 80 - 85%, whilstrates have grown by around 4% year onyear. We’ve been helped here particularlyby growth in the leisure market,especially amongst the late 20’s tomid-30’s age group. Our average lengthof stay is less than one week, with just20% staying for longer periods.

2013 has started quietly with a slightdecline in business. This trend started inlate 2012 and demonstrates that theprovincial UK market is under pressure.Dublin has already been through the painof austerity strategies but it is taking theUK longer to come out of this phase,whilst business in Northern Europe hasseen a slowdown too.

Hotels are our main competitors so wetry to take market share from them. Webelieve we can provide a better productat a more cost effective price, especiallyfor long stay, although hotels can bemore flexible in their rate strategybecause serviced apartments have veryhigh fixed costs.

By Jim Murphy, Managing Director,Prem Group

By Tim Düysen, VP Marketing& Distribution, Derag Livinghotels


Derag living/sleeping area

The Derag Livinghotels have been in theGerman speaking market since the early80s. We have recently opened newproperties in Duesseldorf and Munich. Intotal we operate 14 properties, e.g. inBerlin, Munich, Frankfurt, Cologne/Bonn, Nuremberg and Vienna. Our nextopenings will be concentrated on topdestinations in Germany - even if we arealready represented there. We will openanother property in Munich's city centreand one more in the outskirts. Anotherone in Frankfurt and a 2nd very specialproperty for guests with very highdemands in the heart of Duesseldorf.

However there is still a lot of basichomework the industry has to do. Forexample there is no consistentterminology for our product. Mostproviders talk about ServicedApartments, but our clients use differntterms, and this is a global problem.

This is a good time for our industry inEurope. The clients have a solution forextended stays that will bring morecomfort and save money at the sametime. The providers have the opportunityto extend there range of products in amarket that is not as overcrowded as thehotel market.

Supply

Our research has highlighted 85,263serviced apartments in 1,212 locationsacross Europe. Based on our estimates ofthe world’s total supply of servicedapartments, Europe houses 13% of theglobal serviced apartments market, and13.8% of the world’s serviced apartmentlocations.



Tim Düysen


Maeva

Adagio + Adagio Access (formerly Citea)

Pierre & Vacances

Other


My Suite Apparthotels (Now: Park &

Suites)

Residhome (France)

Suite Novotel

Sejours et Affaires

ResidHotel (France)

ATA Hotels

Derag Apartmenthotels

Innside Premium Hotels

Bridgestreet (estimated)

Achat Hotels

Fraser Suites


Eden Hotels

City Hotels (new entry)

G-Hotel


Acora Hotel und Wohnen

SACO Apartments

Marlin Apartments

Victor's Residenz-Hotels GmbH

Best Western

Othon Suites - Portugal

Fraser Residence

Staybridge Suites - Europe

StayAt Hotel Apartments

Premier Group (UK & Ireland)


Max Serviced Apartments

Oakwood UK

Roomspace Serviced Apartments

Fraser Place

Aedifica

Htel Serviced Apartments

MaMaison

VIP Suites

Cheval residences

Thon Residences

ESPA Hotels

Residence Inn

Live Skyline

The Marmara Hotels

Excellior

Radisson Blu Dubrovnik

B-Aparthotels - Brussels

Pierre & Vacances

Pierre & Vacances

The Ascott Ltd.

Accor

Frasers Hospitality

Marriott

Frasers Hospitality

IHG

The Ascott Ltd.


Frasers Hospitality

Marriott

Radisson

177

90

80

98

39

45

35

27

42

33

8

11

10

38

14

6

7

4

9

8

5

4

25

8

4

20

4

5

3

3

8

2

11

28

54

2

32

2

6

4

6

4

4

2

9

4

3

1

5

13,193

9,337

9,059

6,942

5,102

4,040

3,500

3,402

2,520

2,437

1,601

1,465

1,412

1,200

1,046

1,013

895

833

719

717

665

627

625

600

600

500

482

479

443

428

424

400

400

373

350

320

295

280

279

274

270

246

240

232

220

218

210

207

200

For stays of 1 – 6 nights, servicedapartments in Madrid, Brussels andLisbon offer the best value at EUR 95,EUR 100 and EUR 100 per nightrespectively for a studio apartment.

London is the most expensive city inEurope for serviced apartmentaccommodation in this category, withthe same studio apartment costing EUR205 per night for a stay of up to sixnights. Paris and Amsterdam come next,followed by Moscow.

Average rental rates for servicedapartments across Europe comparefavourably to those in Australasia and theMiddle East, but are more expensive thanthose in Africa, Asia or the Americas.


Lindner Hotels & Residences

Hellsten Hotel Apartments

Old Town Apartments

Acorn Serviced Apartments - London

Golden Leaf Hotels & Residences

Buroma Apartsuites

Apartamentos Playa Club - Lanzarote

Solplay Aparthotels

Boscolo Luxury Residence Budapest

Eurohotel & Suites

Grosvenor House Hotel Apartments

Perfect Visit

Sol Melia

Altis Hotels (new entry)

Solitaire Hotels

Hoteles Quo

The Spires

Your Home From Home

Babka Towers


Winter's Hotelgesellschaft mbH

Laris Hotels (Poland)

Arass Suites

Apartamentos El Dorado - Lanzarote

Properties Unique

Birchover Apartments - Derby

Lisbon Apartments

Senator Apartments (Ukraine)

Aparthotels & Residences

Art Appart

HSH Group - Germany

Astons Apartments

The Richmond - Liverpool

Radisson Blu Trysil - Norway

Aparthotel Wellington - Brussels

Apartamentos Los Cocoteros - Lanzarote

Levante (new entry)

Domus Residence

Freedom Serviced Apartments

Centro Residence

Erel Group

Radisson Blu Galway

Splendom Suites

AKA London

Grandom Suites

Serrano 70

Sunlight Hotels

Boscolo Hotels & Resorts

by Jumeirah

The Ascott Ltd.

Sunlight Hotels

Radisson

Sunlight Hotels

Radisson

Korman Communities

VP Hoteles

24

3

4

11

1

30

1

1

1

1

1

3

2

2

1

3

3

4

1

1

2

4

1

1

20

2

6

2

2

2

2

3

1

1

1

1

2

1

3

1

2

1

1

1

1

1

197

195

189

180

170

160

145

142

138

137

133

127

124

120

106

100

95

92

85

85

85

84

83

81

75

70

66

62

60

60

60

54

51

50

45

44

39

38

35

18

16

11

11

9

9

7


EU

RO

PE

ST

UD

IOO

NE

BE

DR

OO

MT

WO

BE

DR

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M

20

10

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20

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20

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13

ra

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Lo

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US

$E

uro

%L

oca

lcu

rre

ncy

Lo

cal

curr

en

cyU

S$

Eu

ro%

Lo

cal

curr

en

cyL

oca

lcu

rre

ncy

US

$E

uro

Am

ste

rda

m1-6 nights (nightly rate)

EUR 12

0EU

R 12

5USD

161

.42

N/A

4%EU

R 20

4EU

R 18

5USD

238

.94

N/A

-9%

EUR 25

7EU

R 23

5USD

303

.52

N/A

-9%

7 nights + (w

eekly rate)

EUR 79

8EU

R 82

0USD

1,059

.08

N/A

3%EU

R 1,35

6EU

R 1,20

0USD

1,549

.87

N/A

-11%

EUR 1,70

9EU

R 1,60

0USD

2,066

.49

N/A

-6%

One mon

th + (mon

thly rate)

EUR 3,19

8EU

R 3,25

0USD

4,197

.56

N/A

2%EU

R 4,85

0EU

R 4,68

0USD

6,044

.48

N/A

-3%

EUR 5,62

5EU

R 5,50

0USD

7,103

.56

N/A

-2%

3 mon

th + (mon

thly rate)

EUR 3,00

0EU

R 3,05

0USD

3,939

.25

N/A

2%EU

R 4,30

0EU

R 4,25

0USD

5,489

.12

N/A

-1%

EUR 5,20

0EU

R 5,15

0USD

6,653

.53

N/A

-1%

Bru

sse

ls (

ne

w e

ntr

y)


N/A

EUR 10

0USD

129

.20

N/A

N/A

EUR 16

0USD

206

.73

N/A

N/A

EUR 20

0USD

258

.41

N/A

N/A

7 nights + (w

eekly rate)

N/A

EUR 69

5USD

897

.92

N/A

N/A

EUR 1,00

8USD

1,302

.38

N/A

N/A

EUR 1,31

0USD

1,692

.58

N/A

N/A

One mon

th + (mon

thly rate)

N/A

EUR 3,00

0USD

3,875

.90

N/A

N/A

EUR 3,95

0USD

5,103

.58

N/A

N/A

EUR 5,45

0USD

7,041

.65

N/A

N/A

3 mon

th + (mon

thly rate)

N/A

EUR 2,87

5USD

3,714

.40

N/A

N/A

EUR 3,87

5USD

5,006

.68

N/A

N/A

EUR 5,27

5USD

6,815

.54

N/A

N/A

Fra

nk

furt


EUR 115

EUR 10

8USD

139

.54

N/A

-6%

EUR 18

6EU

R 16

5USD

213

.15

N/A

-11%

EUR 24

5EU

R 21

0N/A

-14%

7 nights + (w

eekly rate)

EUR 72

5EU

R 69

5USD

897

.80

N/A

-4%

EUR 1171

EUR 1,05

0USD

1,356

.39

N/A

-10%

EUR 1,54

3EU

R 1,27

5USD

1,646

.54

N/A

-17%

One mon

th + (mon

thly rate)

EUR 2,83

0EU

R 2,75

0USD

3,552

.45

N/A

-3%

EUR 43

13EU

R 4,15

0USD

5,360

.98

N/A

-4%

EUR 5,68

3EU

R 5,37

5USD

6,941

.28

N/A

-5%

3 mon

th + (mon

thly rate)

EUR 2,60

0EU

R 2,55

0USD

3,294

.09

N/A

-2%

EUR 39

00EU

R 3,77

5USD

4,875

.04

N/A

-3%

EUR 5,20

0EU

R 4,90

0USD

6,327

.87

N/A

-6%

Lis

bo

n1-6 nights (nightly rate)

EUR 10

5EU

R 10

0USD

129

.13

N/A

-5%

EUR 14

0EU

R 14

5USD

187

.20

N/A

4%EU

R 22

5EU

R 22

0USD

284

.03

N/A

-2%

7 nights + (w

eekly rate)

EUR 59

5EU

R 59

0USD

761

.72

N/A

-1%

EUR 87

5EU

R 87

5USD

1,129

.66

N/A

0%EU

R 1,15

5EU

R 1,15

0USD

1,484

.70

N/A

0%

One mon

th + (mon

thly rate)

EUR 2,32

0EU

R 2,30

0USD

2,969

.40

N/A

-1%

EUR 3,41

2EU

R 3,40

0USD

4,389

.55

N/A

0%EU

R 4,50

4EU

R 4,40

0USD

5,680

.60

N/A

-2%

3 mon

th + (mon

thly rate)

EUR 2,10

0EU

R 2,00

0USD

2,582

.09

N/A

-5%

EUR 3,25

0EU

R 3,20

0USD

4,131

.34

N/A

-2%

EUR 4,25

0EU

R 4,20

0USD

5,422

.39

N/A

-1%

Lo

nd

on


GBP

185

GBP

175

USD

264

.59

EUR 20

5.22

-5%

GBP

264

GBP

275

USD

415

.71

EUR 32

2.48

4%GBP

357

GBP

345

USD

521

.55

EUR 40

4.66

-3%

7 nights + (w

eekly rate)

GBP

1,165

GBP

1,225

USD

1,851

.87

EUR 1,43

6.52

5%GBP

1,663

GBP

1,700

USD

2,569

.87

EUR 1,99

3.53

2%GBP

2,249

GBP

2,200

USD

3,326

.71

EUR 2,58

2.27

-2%

One mon

th + (mon

thly rate)

GBP

3,850

GBP

3,975

USD

6,009

.12

EUR 4,66

1.35

3%GBP

5,800

GBP

5,975

USD

9,032

.56

EUR 7,00

8.28

3%GBP

7,850

GBP

7,800

USD

11,79

4.69

EUR 9,15

5.30

-1%

3 mon

th + (mon

thly rate)

GBP

3,600

GBP

3,750

USD

5,668

.98

EUR 4,39

7.50

4%GBP

5,400

GBP

5,500

USD

8.314

.49

EUR 6,45

1.14

2%GBP

7,250

GBP

7,250

USD

10,96

3.02

EUR 8,50

7.93

0%

Ma

dri

d1-6 nights (nightly rate)

EUR 79

EUR 95

USD

122

.67

N/A

20%

EUR 14

1EU

R 16

5USD

212

.85

N/A

17%

EUR 18

9EU

R 20

0USD

257

.98

N/A

6%

7 nights + (w

eekly rate)

EUR 54

0EU

R 61

0USD

786

.89

N/A

13%

EUR 91

0EU

R 10

40USD

1,341

.50

N/A

14%

EUR 1,14

5EU

R 1,20

0USD

1,547.89

N/A

5%

One mon

th + (mon

thly rate)

EUR 1,95

0EU

R 2,115

USD

2,728

.32

N/A

8%EU

R 3,19

0EU

R 3,35

0USD

4,321

.19

N/A

5%EU

R 4,22

0EU

R 4,35

0USD

5,611.10

N/A

3%

3 mon

th + (mon

thly rate)

EUR 1,87

5EU

R 2,00

0USD

2,579

.97

N/A

7%EU

R 3,12

0EU

R 3,20

0USD

4,127

.70

N/A

3%EU

R 4,01

0EU

R 4,10

0USD

5,288

.27

N/A

2%

Mo

sco

w1-6 nights (nightly rate)

RUB 5,10

0RU

B 6,20

5USD

200

.60

EUR 15

5.65

21%

RUB 5,58

2RU

B 7,10

0USD

229

.52

EUR 17

8.06

27%

RUB 7,174

RUB 9,00

0USD

290

.97

EUR 22

5.68

25%

7 nights + (w

eekly rate)

RUB 32

,100

RUB 34

,800

USD

1,125

.03

EUR 87

2.91

8%RU

B 31

,634

RUB 33

,700

USD

1,089

.51

EUR 84

5.04

7%RU

B 45

,198

RUB 47,000

USD

1,519

.49

EUR 1,17

8.48

4%

One mon

th + (mon

thly rate)

RUB 115,00

0RU

B 11

8,30

0USD

3,824

.28

EUR 2,96

6.94

3%RU

B 116,50

5RU

B 11

8,20

0USD

3,821

.36

EUR 2,96

3.91

1%RU

B 16

6,49

3RU

B 16

8,30

0USD

5,442

.44

EUR 4,21

9.97

1%

3 mon

th + (mon

thly rate)

RUB 11

0,20

0RU

B 114,20

0USD

3,691

.74

EUR 2,86

4.12

4%RU

B 111,19

6RU

B 113,25

0USD

3,661

.33

EUR 2,83

9.79

2%RU

B 16

1,27

8RU

B 16

4,00

0USD

5,303

.39

EUR 41

12.15

2%

Pa

ris


EUR 16

1EU

R 16

0USD

206

.37

N/A

-1%

EUR 24

9EU

R 24

0USD

309

.56

N/A

-4%

EUR 42

4EU

R 37

5USD

483

.63

N/A

-11%

7 nights + (w

eekly rate)

EUR 90

0EU

R 95

0USD

1,225

.33

N/A

6%EU

R 1,53

5EU

R 1,50

0USD

1,934

.73

N/A

-2%

EUR 2,67

5EU

R 2,55

0USD

3,288

.67

N/A

-5%

One mon

th + (mon

thly rate)

EUR 3,42

5EU

R 3,75

0USD

4,836

.84

N/A

9%EU

R 5,30

0EU

R 5,80

0USD

7,480

.97

N/A

9%EU

R 9,25

0EU

R 10

,000

USD

12,89

6.75

N/A

8%

3 mon

th + (mon

thly rate)

EUR 3,19

0EU

R 3,50

0USD

4,514

.38

N/A

9%EU

R 5,00

0EU

R 5,20

0USD

6,707.08

N/A

4%EU

R 8,80

0EU

R 9,30

0USD

11,99

33.97

N/A

6%

Ra

tes

in k

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cit

ies


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and

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3.


Middle East

In comparison to other global regions,the travel and tourism industries in theMiddle East lag behind other sectors incontributing to regional GDP. In 2011,travel contributed $72 billion to theeconomy, yet employs 1.8 million,making this industry the biggestemployer in the Middle East.

Demand

The Middle East’s hotel industry enjoyed2012, achieving its third highest RevPARof US$131.48 since 2005. The region

remains popular with developers andguests alike, with supply growing by6.3% and demand by 10.2%.

The biggest winners were in Cairo,where occupancy rose by by 2.4%, andAmman, where occupancy rose by15.1%. Jeddah (up 9%) and Dubai (up7.9%) ended the year with the largestADR increases.

The majority of serviced apartments inthese parts have been either convertedfrom, or designed like, residential


IHG, Yas Island, Abu Dhabi

apartments. This lack of standardisationmeans that the design and content of theregion’s serviced apartments are oftendetermined by local planning regulationsrather than brand guidelines.

The market is changing however, withmore hotel chains electing to addkitchenettes to existing hotel room unitsto create studio apartments and fullkitchens to the larger suites, thereby ineffect creating their own servicedapartments. This approach is likely tobecome more common place in theMiddle East as new operator brands enterthe market.

Among these are The Ascott and FraserSuites. Marriott Executive Apartmentsand its mid-market sister brand,Residence Inn, are typically twinned withthe four-star Courtyard by Marriott hotelbrand.

InterContinental Residence Suites andthe ‘Holiday Inn’ of serviced apartments,IHG’s Staybridge Suites, are now presentin Abu Dhabi and Cairo. Accor’s Adagioconcept will soon open in Jeddah, AbuDhabi and Fujairah, while MillenniumExecutive Apartments are planned inDoha and Abu Dhabi.

Occupancy at the newly-opened FraserSuites Doha is running at more than70%. Average length of stay is 5 – 6nights but the operator is targeting anaverage stay of 35 – 40 nights to stabiliseoccupancy and act as a buffer for slumpsin the market.

The group has the advantage of beingable to cross sell the new Doha propertyand its hotels in Bahrain and Dubai, withothers due to open across the Middle Eastin the future. Fraser Suites Doha mostlyattracts business travellers from the GCCcountries, including Saudi Arabia and theUAE, but this could change as the leisuremarket starts to develop.

Arjaan is the name to which all erstwhileRotana serviced apartments wereconverted. EWA by HMH (Coral) is nowoperational in six locations across theArabian Gulf and also Beirut. The onlyexample of a ‘standardised’ servicedapartment brand to date in the GCC isthe 180-unit Suite Novotel next to Mallof the Emirates in Dubai.

Qatar

Serviced apartments are well positionedto capitalise on the business boom inDoha following the opening of the newQatar Convention Centre and in the yearsleading up to the 2022 FIFA World Cup.

Having opened their first Qatar project in2011, Frasers Hospitality were amongstthe first operators on the ground in acountry that plans to have 90,000apartments in place when the WorldCup comes to town. Currently the totalhotel bedroom supply in Qatar is around16,000 units.

Kempinski serviced apartments andMarriott Executive Apartments are alsooperational in Doha and other globalhotel groups are planning a mix of hotelaccommodation and serviced residences.

800800

700700

600600

500500

400400

300300

200200

100100

00

Man

ufac

turin

gof

che

mic

als

Man

ufac

turin

gof

che

mic

als

$US

billi

on(2

011

pric

es)

$US

billi

on(2

011

pric

es)

Aut

omot

ive

man

ufac

turin

gA

utom

otiv

em

anuf

actu

ring

Com

mun

icat

ion

serv

ices

Com

mun

icat

ion

serv

ices

Trav

el &

Tour

ism

Trav

el &

Tour

ism

Educ

atio

nEd

ucat

ion

Fina

ncia

lse

rvic

esFi

nanc

ial

serv

ices

Min

ing

Min

ing

Fig 33 Middle East direct GDP by industry (Source: World Travel & Tourism Council)Fig 33 Middle East direct GDP by industry (Source: World Travel & Tourism Council)


baby formula or meals for their children.They have the necessary equipment pre-stocked in the serviced residence, savingthem the hassle of packing whatever theymay need into their luggage.

At our Somerset branded servicedresidences, the facilities are gearedtowards families and there is typically achildren’s playroom for the little ones orchild-care services available to parentswho may be in need of assistance.

Taking a more holistic view of the futureof serviced residences in the region, wecannot ignore the effects of the ArabSpring. Through the Arab Spring, thepolitical and social turmoil experiencedby countries such as Libya, Egypt andTunisia, saw hotel occupancy levelsplummet. However, in other parts of theMiddle East, stable destinations such asDubai and Doha have largely benefitedfrom the crises. The two cities and otherpeaceful destinations saw a markedincrease in tourist arrivals and investmentdollars, lending a positive outlook for theserviced residence industry.

Throughout the GCC as the regioncontinues to grow, opportunities in theconstruction, consultancy and bankingindustries abound. Coupled with anactive and dynamic energy market,business travel in the region is booming.Over the years, there has been a high-percentage of expatriates relocating tothe Gulf region and the demand forquality and well-managed servicedresidences show little signs of abating.

In Ascott, there is a continued focus andemphasis on the long-stay corporatemarket. Our top accounts originate fromthe banking and finance sector, the oiland gas industry and other consultancyservice providers. Ascott also maintains ahealthy working relationship withrelocation companies that are helpingorganisations to search for reputableaccommodation providers. The ease ofsettling into an Ascott serviced residenceis one of the many reasons companiesfind the Ascott proposition compelling.With their accommodation sorted out, itallows them to focus on other importantaspects of their relocation.

With Ascott, expatriates also have theflexibility of staying in a servicedresidence for a shorter period of time,compared to the traditional apartmentrental scheme which typically has aminimum lease period of 1-2 years. Thisallows relocating expatriates to take theirtime to assess their personal situationbefore committing to any long termdecisions.

More than just catering to the needs ofthe many expatriates relocating to theregion, there is also a strong web of inter-city business travel within the region.Major international companies are settingup offices in business friendly cities suchas Dubai, Doha and Bahrain. Having anextensive network of serviced residencesenables our corporate clients to workwith a single point of contact for theiraccommodation needs.

The Ascott properties within the GCC,work closely together to ensure guestsstaying within the Ascott network arewell-taken care of. We help our guestssecure their reservations in our affiliatedproperties and because we are familiarwith their lifestyle habits, theirpreferences are communicated with theother property as well. The act can be assimple as pre-stocking the guests’favourite juice in the fridge or taking intoconsideration payment preferences. Suchare the little details the guests at Ascottappreciate and keep them coming back.

We remain confident of the servicedresidence industry in the GCC and willcontinue to expand our presence in theGCC through partnerships in the region.

Market perspective

Once considered the less attractiveoption in the hospitality industry, theserviced residence segment today is onethat is experiencing rapid growth andincreasing popularity. The valueproposition put forth by servicedresidences is apparent not just totravellers but also to real estate ownersand developers. Serviced residences haveproven to be more resilient to the cyclicalchanges in the economy and offer astable rate of return for the manystakeholders involved.

We’ve noticed traditional hotel brandsentering the industry in the past fewyears and the competition for the long-stay market has intensified. Presently, thestrategy most hotel chains haveemployed is to co-locate their servicedresidence units together with the otherhotel rooms. While this option allowshotel operators to keep costs low throughthe sharing of facilities and manpower,the lean cost structure of servicedresidences is inherently competitive.Serviced residence operators continue tomaintain a positive advantage inproviding a home away from home forguests on extended stay.

In the Middle East, the serviced residencemodel has gained traction with many ofthe large Arab families who tend to traveltogether. In the Gulf region, theresidences at Ascott range from a studioto a three-bedroom residence and thelarger residences are extremely popularin the region. Arab families also tend tobring along their nanny or maids to helptake care of their children and to this end,our newer properties, such as the newAscott Doha which features a threebedroom unit with a maid’s room inaddition to the three bedrooms.

The fully-equipped kitchen also allowsfamilies to prepare a home-cooked mealinstead of dining out. The kitchen alsoposes a world of conveniences forparents with infants – from preparing

By Melvin Quah, Area GeneralManager, Gulf Region, The Ascott Limited


Supply

Our research has highlighted 40,364serviced apartments in 289 locationsacross the Middle East. Based on ourestimate of the world’s total supply theregion houses 6.2% of the globalserviced apartments market and 3.3% ofthe world’s serviced apartment locations.


Rates

Serviced apartment rental rates in theMiddle East are amongst the mostexpensive in the world. A studioapartment in Abu Dhabi for a stay of lessthan one week costs EUR 100, whilst thesame stay and standard of apartment inDubai costs EUR 126 and in Doha EUR 131.

Middle Eastern serviced apartment ratesare comparable on the internationalstage with US and European rates,underlining the maturity of the servicedapartments sector in this region.



Other

Damac Properties

Arjaan Hotel Apartments by Rotana

Bavaria Executive Suites (Dubai)

Mövenpick Hotels& Resorts (new entry)



Golden Sands (Dubai)

The Address - The Boulevard / Dubai

Somerset

Grand Midwest

Marina 101 - Dubai

Bavaria Executive Suites (Sharjah)

TIME Hotel Apartments - Dubai (formerly

Layia Hospitality)

Flora Hotels & Serviced Apartments -

Dubai

Nuran Serviced Residences (Dubai) (new

entry)

Bonnington Jumeirah Lakes Towers

EWA Hotel Apartments

Suite Novotel

Residence Inn

Intercontinental Suites (Dubai)(new entry)

Residence Suites (Dubai) (new entry)


Green Lakes (Dubai) (new entry)

Oasis Beach Tower (Dubai) (new entry)

Radisson Blu Diplomat Hotel & Residences

- Bahrain

Radisson Blu Dubai Marina

Millennium Copthorne Dubai

Al Hamra Palace Beach Resort (Dubai)

Dusit Residence Dubai Marina

Abidos Hotel Apartments - Dubai

Vision Hotel Apartments - Abu Dhabi

TAJ Palace Dubai

The Dunes Hotel & Suites Qatar

Vision Links Hotel Apartments - Abu Dhabi

Dusit Pearl Coast Premier Apartments

(Dubai)

Rotana Hotels

Marriott

The Ascott Ltd.

Emaar Hospitality

The Ascott Ltd.

TIME Hotels &

Apartments

Accor

Marriott

Shangri-la Hotels

Emirates Hotels &

Resorts

Radisson

Radisson

Millennium Copthorne

Casa Hotels & Resorts

Dusit Hotels & Resorts

Vision Hotels

TAJ Hotels Worldwide

Vision Hotels


172

37

22

1

3

5

2

1

1

3

3

1

1

4

3

2

1

6

2

2

1

1

2

1

1

1

1

1

1

1

1

1

1

1

1

1

16,259

7,817

4,481

2,100

903

680

600

600

542

525

510

506

400

393

388

320

272

257

253

240

212

212

206

181

180

180

152

151

145

145

132

125

90

85

74

48

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DR

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1ra

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1ra

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2/

13

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20

10

/1

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Lo

cal

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Lo

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uro

%L

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Lo

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US

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Ab

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ha

bi (n

ew

en

try)

1-6 nights (n

ightly rate)N/A

AED

475USD

129.32EU

R 100.51N/A

AED

700USD

190.58EU

R 148.12N/A

AED

975USD

265.45EU

R 206.31N/A

7 nights + (w

eekly rate)N/A

AED

2,750USD

748.69EU

R 581.87N/A

AED

4,000USD

1,089.01EU

R 846.41N/A

AED

5,500USD

1,497.39EU

R 1,163.48N/A

One m

onth + (m

onthly rate)

N/A

AED

10,300USD

2,804.20EU

R 2,179.38N/A

AED

16,500USD

4,492.18EU

R 3,491.42N/A

AED

23,000USD

6,262.30EU

R 4,865.46N/A

3 mon

th + (mon

thly rate)N/A

AED

9,400USD

2,559.18EU

R 1,989.05N/A

AED

15,800USD

4,301.60EU

R 3,343.30N/A

AED

20,000USD

5,445.48EU

R 4,230.83N/A

Du

ba

i1-6 n

ights (nightly rate)

AED

456AED

598USD

162.81EU

R 126.3031%

AED

682AED

785USD

213.72EU

R 165.8315%

AED

890AED

1,029USD

280.15EU

R 217.7516%

7 nights + (w

eekly rate)AED

2,830AED

3,100USD

843.99EU

R 654.7510%

AED

4,175AED

4,300USD

1,170.68EU

R 908.353%

AED

5,500AED

6,000USD

1,633.50EU

R 1,269.709%

One m

onth + (m

onthly rate)

AED

10,200AED

10,700USD

2,913.12EU

R 2,259.955%

AED

17,250AED

18,000USD

4,900.50EU

R 3,809.094%

AED

23,400AED

25,000USD

6,806.24EU

R 5,290.407%

3 mon

th + (mon

thly rate)AED

9,900AED

10,200USD

2,776.96EU

R 2,154.683%

AED

17,000AED

17,400USD

4,737.15EU

R 3,682.122%

AED

22,500AED

23,400USD

6,370.64EU

R 4,951.814%

Do

ha

(ne

w e

ntry

)1-6 n


N/A

QAR 616

USD

169.20EU

R 131.35N/A

QAR 875

USD

240.34EU

R 186.58N/A

QAR 1,200

USD

329.61EU

R 255.82N/A

7 nights + (w

eekly rate)N/A

QAR 3,900

USD

1,071.23EU

R 831.63N/A

QAR 5,700

USD

1,565.64EU

R 1,215.46N/A

QAR 7,800

USD

2,142.48EU

R 1,662.81N/A

One m

onth + (m

onthly rate)

N/A

QAR 15,500

USD

4,257.45EU

R 3,305.19N/A

QAR 23,500

USD

6,454.93EU

R 5,010.66N/A

QAR 30,000

USD

8,240.30EU

R 6,395.41N/A

3 mon

th + (mon

thly rate)N/A

QAR 13,000

USD

3,570.76EU

R 2,772.09N/A

QAR 21,000

USD

5,768.23EU

R 4,477.61N/A

QAR 26,400

USD

7,251.46EU

R 5,627.96N/A

Ra

tes in

ke

y citie

s

These rates are average rates and m

ay vary per location, tim

e of year, regional prom

otions and specific klengths of stay. Rates q

uoted are basd on an aerage 4 star extened stay p

reperty and exclude taxes. Exchang

e rates used March

Fig 34 City

rate

s an

aly

sis(Source: The A

partm

ent Service)

70

USA & Canada

2,0002,000

1,8001,800

1,6001,600

1,4001,400

1,2001,200

1,0001,000

800800

600600

400400

200200

20122012 20132013 2013201300

Con

stan

t 201

2 U

S $b

nC

onst

ant 2

012

US

$bn

10.010.0

9.09.0

8.08.0

7.07.0

6.06.0

5.05.0

4.04.0

3.03.0

2.02.0

1.01.0

20122012 20132013 2013201300

% o

f who

le e

cono

my

GD

P%

of w

hole

eco

nom

y G

DP

DirectDirect IndirectIndirect InducedInducedAll values are in constant 2012 prices & exchange rates

140140

120120

100100

8080

6060

4040

2020

20122012 20132013 2013201300

Con

stan

t 201

2 U

S $b

nC

onst

ant 2

012

US

$bn

6.06.0

5.05.0

4.04.0

3.03.0

2.02.0

1.01.0

20122012 20132013 2013201300

% o

f who

le e

cono

my

GD

P%

of w

hole

eco

nom

y G

DP

DirectDirect IndirectIndirect InducedInducedAll values are in constant 2012 prices & exchange rates

Fig 35 Travel & tourism contribution to GDP (Source: World Travel & Tourism Council)


House brand in 2011. This investoractivity demonstrates that demandcontinues to outstrip supply in even themost mature of markets, reflected inaverage rates and healthy operatormargins.

Although new supply is at record lowlevels in the US, re-branding is at theopposite end of the scale, collectivelyincreasing extended stay room supply by2.5% to 355,702 units in 2012. Supplyshortages are being addressed though;the number of rooms under constructionis up 98% year-on-year.

Figure 36 shows that traditional hoteloperators have moved into the extendedstay market in each of the three mainsub-segments of up-scale, mid-price andeconomy products.

80% of the US’ extended stay stock islocated in the country’s biggest 100cities, with Dallas-Fort Worth leading theway at 18,658 followed by Houston(12,333) and Washington DC (11,319).

As you would expect from a relativelynew market, extended stay apartments inCanada tend to be of more recentconstruction, with inventory in both highrise condominiums and town homes insuburban areas. One and two bedroomapartments are commonplace, howeverthe availability of three bedroom

apartments is limited. Otherwise therange of amenities available to users isbroadly the same as in US counterparts.

Corporate housing

The US corporate housing industry isnow worth $2.49 billion whilst thecontinued growth of the sector ishighlighted by revenues in 2012 showinga 9.5% increase in just two years (source:Corporate Housing Providers Association[CHPA]).

“Although corporate housing oftenfollows the same cycles as the overalllodging industry, corporate housingrevenue actually outpaced overall hotelroom revenue,” says Brad Laspe,chairman of the CHPA.

CHPA estimates put supply at 62,204units in the US in 2011 with a predictedexpansion of 2.7% in 2012, although thisreflects a decline in inventory over 2010.However corporate housing providers areable to adjust their inventory accordingto demand, which also enables operatorsto maintain better operating marginsthan the overall lodging industry.

Los Angeles is now the largest corporatehousing market with 5,223 units,followed by Washington DC, New Yorkand Houston. Overall occupancy in theUS corporate housing was 88.6%,showing little change over the last four

A fifth of the estimated $6.6 trillion ofglobal GDP generated from travel andtourism is provided by the US. Thedomestic market provides employment to5.6m people – 3.9% of the total USworkforce.

The volumes in Canada might be lower incomparison - CAD79.6bn in 2012 (4.4%of GDP) but the local prognosis isarguably even healthier than the US.South of the border annual growth is putat 2.1% whereas Canadian marketgrowth is put at 3.5%. This sector is evenmore important in terms of GDPcontributions – 4.4% in 2013 (sources:World Travel & Tourism Council).

The US serviced apartments industry canbe sub-divided into two principal sub-sections; extended stay and corporatehousing. The serviced apartments sectorhas its roots in the US, from where theaparthotel concept and other variants onthe apartment model were also spawned.Corporate housing has been around for50 years and the market is made up ofnational, regional and local providers.

Extended stay

According to the Highland Group, over$1 billion was invested in the extendedstay sector in 2012, Starwood purchasingIntown Suites for $800m following asimilar investment from Hyatt in the Hyatt

Up-scale�segment�

(average�daily�rate�$90+)

Mid-price�segment�

(average�daily�rate�$40�-�90)

Economy�segment�

(average�daily�rate�$40or�less)

Homewood Suites by Hilton

Hyatt House

Larkspur Landing

Sierra Suites

Sonesta ES Suites

Staybridge Suites (IHG)

Candlewood Suites (IHG)

Chase Suite Hotels

Crestwood Suites

Extended Stay America

Hawthorn Suites

Homestead Studio Suites

Home-Towne Suites

Home 2 Suites by Hilton

Mainstay Suites by Choice Hotels

Studio Plus

TownePlace Suites by Marriott

Budget Suites

Crossland Suites

InTown Suites

Lodge America

Savannah Suites

Studio 6

Suburban Extended Stay Hotels by

Choice Hotels

Sun Suites

Value Place

Fig 36 Principal US extended stay brands (Source: The Highland Group)


years. The average stay in the UScorporate housing market was 86 nightsin 2011, compared to 83 nights in 2010.

Corporate housing revenues performedbetter than their hotel competitors, risingby 6.8% in 2011. At the same time theshortage of finance for new developmentwill limit growth in hotel room supply,thereby helping corporate housing totake a greater share of theaccommodation market providing a lackof available apartments for corporatehousing providers to lease is addressed.

The Canadian corporate housing marketis much newer than in the US. TheHighland Group estimates that there arejust 5,242 units in Canada in whichaverage occupancy declined from 81% in2010 to 80% in 2011 yet average ratesincreased by 9%. Overall, the Canadiancorporate housing industry is estimatedto generate room revenues of over $170million annually. In common with themore mature US market, project orassignment work is the most commonpurpose of stay in Canadian corporatehousing followed by relocation.

14%14%

24%24%31%

31%5%5%

26%26%

Fig 37 Canadian corporate housing (Source: The Highland Group)Fig 37 Canadian corporate housing (Source: The Highland Group)

RelocationRelocation

Government/MilitaryGovernment/Military

Insurance/EmergencyInsurance/Emergency

Project/TrainingProject/Training

OtherOtherOther


Homewood Suites

Market perspective

A big trend in New York City is that morepeople are finding and booking thesetypes of accommodations online on theirown.

Companies have done away with thededicated person or department doingthe bookings for everyone in thecompany. More and more, the individualcompanies are on their own with doingtheir own online research and bookingtheir stay, then just providing a receipt totheir company for reimbursement.

American Express’ travel department indowntown Manhattan recently laid offstaff. This sets a trend that I believe couldbe replicated across America.

In NYC, there are about 100 servicedapartment operators. About 20 arenational/international chains and about80 are smaller mom-and-pop operatorswith decades of experiences each. Themix of business in Manhattan is about75% business-related and 25% leisure.The other main cities for which wereceive bookings are San Francisco, LosAngeles and Washington DC.

We are seeing many clients becomingmore price-sensitive and less brand-aware. More clients do not care aboutstaying with a nationwide provider.Although the sector has just aboutweathered the recession, operators havehad to lower their monthly rates andslightly decrease the number of units intheir inventory.

Going forward we anticipate transactionsto grow over the next 2 years. Morepeople are seeing the benefits of servicedapartments such as more space andlower costs. In NYC, we know that thevalue proposition of serviced apartmentsis being spread amongst all the businesstravellers coming into town.

By Ray Madronio, LocalBigwig.com


Market perspective

Value Place is seeing significant increasesin demand for its extended-stay lodging,a trend reflected nationwide for thissector. Nationally, extended-stay hoteldemand in 2012 was up 2.1% on 2011whilst Value Place saw its 2012occupancy for stabilized company-owned properties climb to 86.5 percent,up 2.2 percent from 2011.

Currently, Value Place is a nationalcompany covering the United States asits target market. Together with otherlarge national chains we make up thelion’s share of the economy extended-stay business. Value Place is the largesteconomy extended-stay franchise inAmerica with 181 properties operating in 32 states.

We take 43% of our guests from businesstravel. Many of these bookings comefrom company travel coordinators whoare seeking affordable, clean andcomfortable accommodations for theiremployees. For the same reasons, ValuePlace also appeals to business travelprofessionals who may foot their own billfor lodging and other on-the-roadexpenses or who travel on a strict perdiem budget.

Typically these guests are blue-collarworkers or traveling sales representatives.Our remaining 57% are for guests onvacation, visiting family, transitioningbetween homes, or dealing with medicalcare or family situations. In 2010, a USAToday article deemed Value Place a“recession-proof business” as it managedto grow in a down economy. We are stillproving that assessment.

One of the by-products of the recessionis increased customer demand for value,a trend that complements Value Place’sstrengths of clean, comfortable andaffordable lodging. That means it’s likelythe percentage of business travelersmaking up our guest profile willcontinue to grow dramatically in the nexttwo years. In fact, Value Place expects tosee economy extended-stay lodgingemerge as a new norm for thosetravelling for work.

Value Place’s unique business modelmakes it especially appealing for businesstravelers and the companies that employthem. Value Place offers all the amenitiesand basics of an apartment, including in-room kitchens that offer convenience andkeep meal costs affordable. With its leanstaffing and operating model, Value Placeensures that costs remain low andaffordable.

Obtaining financing in a difficulteconomy can be a struggle for somefranchisees. This occasionally can pose an

By Kyle Rogg, COO, Value Place

issue for all-new constructions projectssuch as Value Place. Despite tight creditmarkets, our franchisees continue tomanage to develop. Those who aresuccessful typically end up buildingseveral properties.

The extended-stay market shows no signsof stopping after experiencing steadygrowth since 2003. That growthunderscores the strong value propositionbehind Value Place: a great lodgingsolution for our guests and a profitableinvestment for our franchisees.



Residence Inn

Extended Stay Apartments

Candlewood Suites

Homewood Suites

Town Place Suites

Other

Oakwood

Value Place

Staybridge Suites


Extended Stay Deluxe

Hawthorn Suites

Hyatt House (formerly Summerfield Suites)

Studio 6

Suburban

In Town Suites

Shilo Inns

Crossland

Studio Plus

MainStay Suites

Sun Suites

Crestwood Suites

Mercure South America

Othon Suites - Brazil


Sonesta ES Suites

Savannah Suites

Home 2 Suites

Siegel Suites

Chase Suite Hotels

Larkspur Landing

Furnished Quarters

AKA Serviced Residences

Premiere Suites

Four Seasons

AVE Apartments & Suites

CitiSuites San Francisco

Signature Properties (New York)

Affordable Corporate Suites


One King West - Toronto

Temporary Living (new entry)

Lodge America


Melia Orlando Suite Hotel

Town Inn Furnished Suites - Toronto

ARK Apartment Homes

Temporary Apartments - Buenos Aires

Dazzler Suites

Element Hotels

Marriott

Extended Stay Hotels

Intercontinental Hotel

Group (IHG)

Hilton

Marriott


(est)


Group (IHG)



Wyndham Worldwide

Hyatt

G6 Hospitality

Choice Hotels



Choice Hotels

Accor

Hilton

Korman

Korman

Hyatt

Marriott

Sol Melia

Korman

Fen Hoteles

Starwood

733

363

300

241

258

340

1,850

181

185

131

109

106

57

70

63

138

41

34

46

43

22

20

25

15

130

17

14

19

16

12

11

4

9

15

5

6

1

8

11

5

1

6

2

2

1

1

2

4

3

1

90,475

41,000

28,972

26,484

25,765

23,800

22,800

21,587

20,106

17,000

11,200

10,681

8,140

7,771

7,351

6,900

6,150

4,400

3,600

3,330

2,970

2,700

2,607

2,434

2,145

2,082

1,680

1,653

1,600

1,535

1,320

1,054

919

750

650

600

500

500

400

332

330

275

270

260

240

200

160

160

144

100

Supply

Our research has highlighted 418,950serviced apartments in 5,702 locationsacross the US, Canada, Central and SouthAmerica. Based on our estimates of theworld’s total supply of servicedapartments, the Americas house 63.8%of the global serviced apartments marketin 64.8% of the world’s servicedapartment locations.


Rate summary

For stays of 1 – 6 nights, servicedapartments in Canada are substantiallycheaper than those in the US. But ratesdiffer within North America too; a studioapartment in Boston starts at $140 pernight for a stay of up to one week,compared with $200 a night for the sameproduct in New York.

Internationally, rates are comparable withAsia, averaging $85 – 200 a night, some$20 – 50 a night more than operators inCentral or South America.


The major operators in the region (continued).

Brasiliana Santana Gold Flat

Live Skyline

Conrad Miami

The Alexandra Hotel - Toronto

Regent Park Suite Hotel - Sao Paulo

Mandarin Oriental New York

Four Seasons Houston

Augusta Park Suite Hotel - Sao Paulo

Today Living Group

Aparthotel Cabildo Suites - Buenos Aires

Hollywood Suites & Lofts - Buenos Aires

Ayres de Recoleta - Buenos Aires

Ayres de Libertad - Buenos Aires

Crescent Suites Hotel (Boston)

Alameda Aparthotel - Sao Paulo

Oscar Freire Imovel Total - Sao Paulo

Mandarin Oriental

1

5

1

1

1

1

1

1

6

1

1

1

1

1

1

1

96

90

76

75

70

65

64

54

50

48

41

38

30

30

28

13


US

A/

CA

NA

DA

ST

UD

IOO

NE

BE

DR

OO

MT

WO

BE

DR

OO

M

20

10

/1

1ra

te2

01

2/

13

rate

Yo

Yv

aria

nce

20

10

/1

1ra

te2

01

2/

13

rate

Yo

Yv

aria

nce

20

10

/1

1 ra

te2

01

2/

13

rate

Yo

Yv

aria

nce

Lo

cal

curre

ncy

Lo

cal

curre

ncy

US

$E

uro

%L

oca

lcu

rren

cyL

oca

lcu

rren

cyU

S$

Eu

ro%

Lo

cal

curre

ncy

Lo

cal

curre

ncy

US

$E

uro

%

Bo

ston

1-6 nights (n

ightly rate)N/A

USD

140N/A

EUR 108.16

N/A

USD

150N/A

EUR 115.88

N/A

USD

175N/A

EUR 135.21

N/A

7 nights + (w

eekly rate)N/A

USD

875N/A

EUR 675.99

N/A

USD

950N/A

EUR 733.99

N/A

USD

1,130N/A

EUR 873.06

N/A

One m

onth + (m

onthly rate)

N/A

USD

3,300N/A

EUR 2,549.46

N/A

USD

3,500N/A

EUR 2,704.18

N/A

USD

4,300N/A

EUR 3,321.64

N/A

3 mon

th + (mon

thly rate)N/A

USD

3,100N/A

EUR 2,394.95

N/A

USD

3,300N/A

EUR 2,549.66

N/A

USD

4,000N/A

EUR 3,089.90

N/A

Ne

w Y

ork

1-6 nights (n

ightly rate)USD

195USD

200N/A

EUR 154.50

3%USD

270USD

265N/A

EUR 204.73

-2%USD

385USD

325N/A

EUR 251.02

-15%

7 nights + (w

eekly rate)USD

1280USD

1,350N/A

EUR 1,042.88

5%USD

1880USD

1,775N/A

EUR 1371.33

-6%USD

2590USD

2,500N/A

EUR 1,930.89

-3%

One m

onth + (m

onthly rate)

USD

3275USD

3,400N/A

EUR 2,626.50

4%USD

4560USD

4,600N/A

EUR 3,553.88

1%USD

5000USD

4,800N/A

EUR 3,707.81

-4%

3 mon

th + (mon

thly rate)USD

2975USD

3,100N/A

EUR 2,394.75

4%USD

3,800USD

3,900N/A

EUR 3,013.07

3%USD

4800USD

4,650N/A

EUR 3,591.46

-3%

To

ron

to1-6 n


CAD 101

CAD 125

23%CAD 124

CAD 145

USD

141.71EU

R 109.4517%

CAD 150

CAD 176

USD

172EU

R 132.8717%

7 nights + (w

eekly rate)CAD 670

CAD 700

USD

684.15EU

R 528.394%

CAD 775

CAD 845

USD

825.83EU

R 637.859%

CAD 975

CAD 1,050

USD

1,026.18EU

R 792.698%

One m

onth + (m

onthly rate)

CAD 2,345

CAD 2,600

USD

2,541.12EU

R 1,962.6011%

CAD 2,770

CAD 3,000

USD

2,931.94EU

R 2,264.568%

CAD 3,400

CAD 3,650

USD

3,567.31EU

R 2,755.657%

3 mon

th + (mon

thly rate)CAD 2,035

CAD 2,350

USD

2,296.78EU

R 1,773.8915%

CAD 2,400

CAD 2,675

USD

2,614.30EU

R 2,019.4611%

CAD 3,225

CAD 3,400

USD

3,322.98EU

R 2,566.915%

Ra

tes in

ke

y citie

s

These rates are average rates and m

ay vary per location, tim

e of year, regional prom

otions and specific klengths of stay. Rates q

uoted are basd on an aerage 4 star extened stay p

reperty and exclude taxes. Exchang

e rates used March 2013.

Fig 38 City

rate

s an

aly

sis(Source: The A

partm

ent Service)

78

Report Conclusionsby Mark Harris

The serviced apartments sector is on the verge of a new chapterin its success story. Although the availability of finance to powerthe new development pipeline remains restricted, the expansionof global brands into new and emerging economies, togetherwith the launch of new sub-brands within the sector to meetdifferent customer needs are all signs of substantial impendinggrowth.

Corporates recognise the benefits of serviced apartments, evenif they don’t yet fully understand the differences between howapartments and traditional hotels work. This places the onus onintermediaries to provide the missing product knowledge andto integrate serviced apartments into corporate travel andrelocation programmes. How long travel and relocationprogrammes will remain separate in an increasingly mobileworld remains to be seen.

Specialist knowledge tends to be vested in specialists likeThe Apartment Service. Travel Management Companies andRelocation Management Companies may be the conduitbetween the two ends of the supply chain, but a forensicunderstanding of serviced apartment leases, bookingprocesses, services and regionalisms in product is essential.

Although the research undertaken for this reportoverwhelmingly confirms that lack of standardisation in qualityand service thresholds is the main barrier to future corporateadoption of serviced apartments, the question is whether thesupply chain can be brought together to realise this consensus.

In the meantime, the growing realisation amongst propertyprofessionals, hospitality providers and entrepreneurs that theextended stay market can provide good returns on investmentwill fuel the pipeline for both existing and new providers. Likeany free market however, the skill will lie in ensuring thatsupply remains the right side of demand.


Global Apartment Listingsby Bard Vos

Leading Serviced apartment providers by brand Locations Apartments

Accor

The Ascott Ltd.


Frasers Hospitality


Group (IHG)

Marriott

Pierre et Vacances

Adagio (Europe)

Adagio Access (formerly Citea)

Mercure (South America+ Australia)

Mirvac Hotels & Resorts

Suite Novotel (EMEA)

Total


Citadines

Somerset


Total

Crossland

Extended Stay America


Homestead Suite Studios

Studioplus

Total

Fraser Residence

Fraser Suites

Fraser Place

Modena Residence (new brand)

Capri

Total

Candlewood Suites

Staybridge Suites

Total


Residence Inn

Town Place Suites

Total

Pierre & Vacances

Maeva

Total

38

52

65

36

30

221

15

59

39

64

177

34

363

109

131

46

683

11

25

9

3

2

50

300

188

488

23

737

258

1,018

80

177

257

4,486

4,851

6,780

2,000

3,781

21,898

2,990

7,554

6,951

5,290

22,785

4,400

41,000

11,200

17,000

3,600

77,200

989

4,155

1,418

689

488

7,739

28,972

20,549

49,521

3,059

90,947

25,765

119,771

9,059

13,193

22,252


Top 15 Global serviced apartment providers Locations Units

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Marriott (Worldwide)

Extended Stay Hotels (USA)

Intercontinental Hotel Group

(Worldwide)

Oakwood Corp Housing (estimated) -

inc 186 loc’ns/5500 units from

Execustay

Hilton Homewood Suites (USA)

The Ascott Ltd (Worldwide)

Pierre & Vacances (Europe)

Accor Hotels (Worldwide)

Value Place (USA)

Mantra Group

Choice Hotels (USA)

Hawthorn Suites

Frasers Hospitality


Sun Suites

1,018

683

488

2,081

241

177

257

221

181

130

106

92

50

155

22

119,771

77,200

49,521

31,373

26,484

22,785

22,252

21,898

21,587

13,600

10,681

10,000

7,739

8,201

2,970


Shama Tsim Sha Tsui Hong Kong

Regional Summaries

Africa Locations Apartments

Protea Hotels

Southern Sun Resorts

Courtyard Apartments (South Africa)

Other

Executive Apartments and Hotels

Village and Life

Suite Novotel

Relais Hotels

Ambassador Hotel & Executive Suites

Three Cities Urban Park Hotel & Spa - Uhmlanga

Premiere Classe Serviced Apartments

Executive Suites

Home From Home Hospitality

YAYA Centre

Prime Executive Apartments - Nairobi

Residence Casablanca Aparthotel

Heri Heights Serviced Apartments (Nairobi-Kenya)

Meltonia Luxury Suites

Three Cities Bantry Bay - Cape Town

Gem Suites - Nairobi

Palmeraie Village (Marrakech)

Reata Serviced Apartments - Nairobi

Batians Peak - Nairobi

Hermitage Gardens Resort (Lagos-Nigeria)

Prime Apartments - Ghana

Palacina Apartments

Sandton - RSA



19

4

6

6

5

6

1

4

1

1

4

1

4

1

2

1

1

1

1

1

1

1

1

1

1

1

1,520

610

451

396

305

221

126

116

97

92

80

75

75

70

58

50

46

44

38

34

30

29

28

17

15

1

Total 76 4,634


Asia Locations Apartments

Somerset


Oakwood


Fraser Suites

Compass Hospitality

Nieva World Apartments


Other

Tokyu Stay Apartment Hotels - Tokyo

Centre Point Residences Bangkok

Shama Group


Kantary Collection

Far East Serviced Apartments Company - Singapore


Fraser Place

Cape Collection

Kameo Collection

Lanson Place

Modena

St. Mary Residences - Kuala Lumpur

Fraser Residence

Kempinski Residences

Capri

Damas Suites & Residences - Kuala Lumpur

Jazz Residence at Pacific Place - Kuching (Malaysia)

Royal Suites & Tower - Shenzhen

Belvedere Serviced Apartments - Shanghai

Green Court Serviced Apartments - Shanghai

New Harbour Serviced Apartments - Shanghai

Le Papillon India

Sunflower Hotel & Residence - Shenzhen

Ovolo Group

Easy Beijing (new entry)

Green Tree Suites (China)

Phachara Suites - Bangkok

Asahi Homes (Tokyo) (new entry)

Pan Pacific Serviced Suites - Singapore

Signature Crest (India) (new entry)

Star City Hotels (Chennai) (new entry)

Best Western

Hotel Mystays Asakusa - Tokyo

Heritage Hotels

Far East Serviced Apartments Company - Malaysia

Regalia Residences - Changning Shanghai



Kingland Serviced Apartments - Shanghai

Belgravia Serviced Apartments - Shanghai

Grand Mercure - Bangalore

The Ascott Ltd.

The Ascott Ltd.

Oakwood Corp Housing (est)

The Ascott Ltd.

The Ascott Ltd.

Marriott

Kasemkij Properties

Shangri-la Hotels

Kasemkij Properties

Kasemkij Properties

Frasers Hospitality

Eastern & Oriental

Kempinski Hotels

Frasers Hospitality

New World Group

Pan Pacific Hotels

Best Western

New World Group

Hyatt

Grand Mercure

33

63

17

19

14

10

14

11

16

14

9

13

11

7

9

17

6

5

5

5

3

1

6

6

2

1

2

1

1

1

1

5

1

5

1

1

1

6

3

10

5

2

1

10

1

1

1

1

1

1

1

5,892

5,205

2,700

2,324

2,324

2,000

2,000

1,990

1,945

1,820

1,600

1,552

1,454

1,162

1,029

966

940

833

833

705

689

650

510

500

488

398

354

275

261

260

255

250

248

237

200

200

194

185

180

172

172

162

160

150

149

143

142

133

130

126

126


Asia cont... Locations Apartments

CHI International

Eastern Garden Serviced Apartments - Shanghai

Grand Hyatt Residences - Mumbai

Hundred Stay Shinjuku - Tokyo

Luminous Modern Universe Apartment Hotel - Shanghai

World Union Serviced Apartments - Shanghai

Flexstay Inn - Higashi Ueno, Tokyo

Leading Noble Suites - Shanghai

The Leela Kempinski - Gurgaon

Remington Hotel

8 on Claymore by Summit Serviced Residences

99 Bonham - Hong Kong

Mayson Shanghai Pudong Serviced Apartments

Shanghai ACME Expo Riverside Serviced Apartments

Taj Wellington Mews - Mumbai

Lalco Residency - Mumbai

Ladoll Serviced Apartments - Shanghai

21 Whitfield - Hong Kong

V Causeway Bay - Hong Kong

The Jervois - Hong Kong

Four Points - Pune

Hyatt Park Plaza - Hyderabad

Park Hyatt Hyderabad

Skyla Serviced Apartments

Melange Lavelle - Bangalore

Grand Residency - Mumbai

Mandarin Oriental Guangzhou

V Wanchai

Hotel Cloud 9 Residency - Bangalore

The Lalit - Mumbai

Maple Suites - Bangalore

Royal Comfort Apartments (Bangalore)

D Habitat Serviced Apartments - Bangalore

Sheraton Nha Trang Hotel & Spa in Nha Trang (new entry)

Resorts World Manila

Preferred Hotel Group

V Hotels

Sheraton

Hyatt

Hyatt

Jones, Lang LaSalle

Mandarin

V Hotels

Starwood Hotels

4

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

2

1

1

121

115

111

102

100

100

97

90

90

89

85

84

80

80

80

68

60

54

53

49

48

42

42

42

37

35

30

25

22

21

19

19

10

7

Total 419 49,480




Australia/New Zealand Locations Apartments

Mantra Group (formerly Stella Hospitality)

Other


Oaks Apartments

Mercure Australia

Meriton Serviced Apartments


Mirvac

Waldorf Serviced Apartments

Quest Serviced Apartments - New Zealand and Fiji

Punt Hill Serviced Apartments

Somerset

Corporate Keys

Medina Serviced Apartments

Fraser Suites

Astra Apartments

Best Western Australia

Central Group

Q Resorts

Fraser Place

Clifton on Northbourne - Canberra


VR Hotels

The York

Apartments by Nagee - Canberra

Sheraton Mirage Port Douglas

Kingston Terrace (Canberra)

Terrace Villas (new entry)

Park Squire Motor Inn & Serviced Apartments

Quest

Accor

Toga Hospitality

Accor

Quest

The Ascott Ltd.

Toga Hospitality

Frasers Hospitality

Prime Group of Companies

Frasers Hospitality

The Ascott Ltd.

Swiss Belhotels

Sheraton (Starwood)

130

556

120

38

40

11

26

36

27

35

15

3

1

4

2

17

19

4

4

1

1

1

7

1

1

1

1

1

1

13,600

13,457

6,786

4,432

4,173

2,674

2263

2,000

1,900

1,415

707

534

500

350

320

309

300

280

233

158

153

128

116

110

90

90

74

50

18

Total 1,104 57,220

Europe Locations Apartments

Maeva

Adagio + Adagio Access (formerly Citea)

Pierre & Vacances

Other


My Suite Apparthotels (Now: Park & Suites)

Residhome (France)

Suite Novotel

Sejours et Affaires

ResidHotel (France)

ATA Hotels

Derag Apartmenthotels

Innside Premium Hotels


Achat Hotels

Fraser Suites


Eden Hotels

City Hotels (new entry)

G-Hotel


Acora Hotel und Wohnen

SACO Apartments

Marlin Apartments

Victor's Residenz-Hotels GmbH

Best Western

Othon Suites - Portugal

Fraser Residence

Staybridge Suites - Europe

StayAt Hotel Apartments

Premier Group (UK & Ireland)


Max Serviced Apartments

Oakwood - UK

Roomspace Serviced Apartments

Fraser Place

Aedifica

Htel Serviced Apartments

MaMaison

VIP Suites

Cheval residences

Thon Residences

ESPA Hotels

Residence Inn

Live Skyline

The Marmara Hotels

Excellior

Radisson Blu Dubrovnik

B-Aparthotels - Brussels

Lindner Hotels & Residences

Hellsten Hotel Apartments

Pierre & Vacances

Pierre & Vacances

The Ascott Ltd.

Accor

Frasers Hospitality

Marriott

Frasers Hospitality

Intercontinental Hotel Group

The Ascott Ltd.


Frasers Hospitality

Marriott

Radisson

177

90

80

98

39

45

35

27

42

33

8

11

10

38

14

6

7

4

9

8

5

4

25

8

4

20

4

5

3

3

8

2

11

28

54

2

32

2

6

4

6

4

4

2

9

4

3

1

5

24

3

13,193

9,337

9,059

6,942

5,102

4,040

3,500

3,402

2,520

2,437

1,601

1,465

1,412

1,200

1,046

1,013

895

833

719

717

665

627

625

600

600

500

482

479

443

428

424

400

400

373

350

320

295

280

279

274

270

246

240

232

220

218

210

207

200

197

195



Europe cont... Locations Apartments

Old Town Apartments

Acorn Serviced Apartments - London

Golden Leaf Hotels & Residences

Buroma Apartsuites

Apartamentos Playa Club - Lanzarote

Solplay Aparthotels

Boscolo Luxury Residence Budapest

Eurohotel & Suites

Grosvenor House Hotel Apartments

Perfect Visit

Sol Melia

Altis Hotels (new entry)

Solitaire Hotels

Hoteles Quo

The Spires

Your Home From Home

Babka Towers


Winter's Hotelgesellschaft mbH

Laris Hotels (Poland)

Arass Suites

Apartamentos El Dorado - Lanzarote

Properties Unique

Birchover Apartments - Derby

Lisbon Apartments

Senator Apartments (Ukraine)

Aparthotels & Residences

Art Appart

HSH Group - Germany

Astons Apartments

The Richmond - Liverpool

Radisson Blu Trysil - Norway

Aparthotel Wellington - Brussels

Apartamentos Los Cocoteros - Lanzarote

Levante (new entry)

Domus Residence

Freedom Serviced Apartments

Centro Residence

Erel Group

Radisson Blu Galway

Splendom Suites

AKA London

Grandom Suites

Serrano 70

Sunlight Hotels

Boscolo Hotels & Resorts

by Jumeirah

The Ascott Ltd.

Sunlight Hotels

Radisson

Sunlight Hotels

Radisson

Korman Communities

VP Hoteles

4

11

1

30

1

1

1

1

1

3

2

2

1

3

3

4

1

1

2

4

1

1

20

2

6

2

2

2

2

3

1

1

1

1

2

1

3

1

2

1

1

1

1

1

189

180

170

160

145

142

138

137

133

127

124

120

106

100

95

92

85

85

85

84

83

81

75

70

66

62

60

60

60

54

51

50

45

44

39

38

35

18

16

11

11

9

9

7

Total 1,212 85,263

Middle East Locations Apartments

Other

Damac Properties

Arjaan Hotel Apartments by Rotana

Bavaria Executive Suites (Dubai)

Mövenpick Hotels& Resorts (new entry)



Golden Sands (Dubai)

The Address - The Boulevard / Dubai

Somerset

Grand Midwest

Marina 101 - Dubai

Bavaria Executive Suites (Sharjah)

TIME Hotel Apartments - Dubai (formerly Layia Hospitality)

Flora Hotels & Serviced Apartments - Dubai

Nuran Serviced Residences (Dubai) (new entry)

Bonnington Jumeirah Lakes Towers

EWA Hotel Apartments

Suite Novotel

Residence Inn

Intercontinental Suites (Dubai)(new entry)

Residence Suites (Dubai) (new entry)


Green Lakes (Dubai) (new entry)

Oasis Beach Tower (Dubai) (new entry)

Radisson Blu Diplomat Hotel & Residences - Bahrain

Radisson Blu Dubai Marina

Millennium Copthorne Dubai

Al Hamra Palace Beach Resort (Dubai)

Dusit Residence Dubai Marina

Abidos Hotel Apartments - Dubai

Vision Hotel Apartments - Abu Dhabi

TAJ Palace Dubai

The Dunes Hotel & Suites Qatar

Vision Links Hotel Apartments - Abu Dhabi

Dusit Pearl Coast Premier Apartments (Dubai)

Rotana Hotels

Marriott

The Ascott Ltd.

Emaar Hospitality

The Ascott Ltd.

TIME Hotels & Apartments

Accor

Marriott

Shangri-la Hotels

Emirates Hotels & Resorts

Radisson

Radisson

Millennium Copthorne

Casa Hotels & Resorts


Vision Hotels

TAJ Hotels Worldwide

Vision Hotels


172

37

22

1

3

5

2

1

1

3

3

1

1

4

3

2

1

6

2

2

1

1

2

1

1

1

1

1

1

1

1

1

1

1

1

1

16,259

7,817

4,481

2,100

903

680

600

600

542

525

510

506

400

393

388

320

272

257

253

240

212

212

206

181

180

180

152

151

145

145

132

125

90

85

74

48

Total 289 40,364



The Residences at the Ritz-Carlton, Toronto

US & Canada Locations Apartments

Residence Inn

Extended Stay Apartments

Candlewood Suites

Homewood Suites

Town Place Suites

Other

Oakwood

Value Place

Staybridge Suites



Hawthorn Suites

Hyatt House (formerly Summerfield Suites)

Studio 6

Suburban

In Town Suites

Shilo Inns

Crossland

Studio Plus

MainStay Suites

Sun Suites

Crestwood Suites

Mercure South America

Othon Suites - Brazil


Sonesta ES Suites

Savannah Suites

Home 2 Suites

Siegel Suites

Chase Suite Hotels

Larkspur Landing

Furnished Quarters

AKA Serviced Residences

Premiere Suites

Four Seasons

AVE Apartments & Suites

CitiSuites San Francisco

Signature Properties (New York)

Affordable Corporate Suites


One King West - Toronto

Temporary Living (new entry)

Lodge America


Melia Orlando Suite Hotel

Town Inn Furnished Suites - Toronto

ARK Apartment Homes

Temporary Apartments - Buenos Aires

Dazzler Suites

Element Hotels

Brasiliana Santana Gold Flat

Marriott


Intercontinental Hotel Group (IHG)

Hilton

Marriott


Intercontinental Hotel Group (IHG)



Wyndham Worldwide

Hyatt

G6 Hospitality

Choice Hotels



Choice Hotels

Accor

Hilton

Korman

Korman

Hyatt

Marriott

Sol Melia

Korman

Fen Hoteles

Starwood

733

363

300

241

258

340

1,850

181

185

131

109

106

57

70

63

138

41

34

46

43

22

20

25

15

130

17

14

19

16

12

11

4

9

15

5

6

1

8

11

5

1

6

2

2

1

1

2

4

3

1

1

90,475

41,000

28,972

26,484

25,765

23,800

22,800

21,587

20,106

17,000

11,200

10,681

8,140

7,771

7,351

6,900

6,150

4,400

3,600

3,330

2,970

2,700

2,607

2,434

2,145

2,082

1,680

1,653

1,600

1,535

1,320

1,054

919

750

650

600

500

500

400

332

330

275

270

260

240

200

160

160

144

100

96

Total 289 40,364


US & Canada cont... Locations Apartments

Live Skyline

Conrad Miami

The Alexandra Hotel - Toronto

Regent Park Suite Hotel - Sao Paulo

Mandarin Oriental New York

Four Seasons Houston

Augusta Park Suite Hotel - Sao Paulo

Today Living Group

Aparthotel Cabildo Suites - Buenos Aires

Hollywood Suites & Lofts - Buenos Aires

Ayres de Recoleta - Buenos Aires

Ayres de Libertad - Buenos Aires

Crescent Suites Hotel (Boston)

Alameda Aparthotel - Sao Paulo

Oscar Freire Imovel Total - Sao Paulo

Mandarin Oriental

5

1

1

1

1

1

1

6

1

1

1

1

1

1

1

90

76

75

70

65

64

54

50

48

41

38

30

30

28

13

Total 5,702 418,950

TOTAL LOCATIONS & SERVICED APARTMENTS WORLDWIDE 8,802 655,911

Corporate housingUSA

Canada

63,911

5,242

TOTAL CORPORATE HOUSING IN USA/CANADA 69,153


I N T E R N AT I O N A L C O R P O R AT E A N D

R E L O C AT I O N H O U S I N G S O L U T I O N S

J U S T G O T E A S I E R . . .

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We offer Relocation companies and HR management complete temporary accommodation services

with cost savings in convenient locations to suit your individual business needs.

The Apartment Service is also your gateway to nearly 524,000 apartments worldwide - many with real time,

online booking on your website.

Why not contact our sales team to discuss your particular accommodation requirements and to see how

we can facilitate your procurement process?

Telephone +44 (0) 20 8944 3612 or email us at [email protected]

T H E L E A D I N G R E F E R E N C E G U I D E

F O R S E RV I C E D A PA R T M E N T B U Y E R S ,

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The Global Serviced ApartmentsIndustry Report 2008 / 09

a TIN report

Helping corporates with their serviced apartments

needs worldwide since 1981.