Understanding the Future of Alternate Accommodations
We tend to consider the hotel industry in a traditional sense of hotels and resorts. But in case you've been ostrich with your head in the sand for the past few years, the term no longer really applies, replaced instead with 'the accommodations industry' that incorporates all the new table names that were only fringe players a decade ago.
The incredible growth of Airbnb, as an example of one such entrant, has hopefully raised our collective awareness. To narrow down our market scope a bit, according to HVS services apartments in Europe are expected to outgrow traditional hotels for the next three years, with an estimated 23,600 units added through the end of 2022.
Serviced or extended-stay apartments operate differently than the most common home sharing platforms or traditional hotels. Length of stay is a key factor as is the accommodation style which tends to include a kitchen. However, even these points of differentiation are changing as the sector grows, becomes more mainstream and fragments into semi-disparate niches.
For perspective, I had the opportunity to ask Rebecca Hollants Van Loocke, COO EMEA of Frasers Hospitality, an important player in the global alternate lodgings provider market with 140 properties in over 70 cities with over 23,400 keys.
Tell me a little but about the history of Frasers Property.
Frasers Property developed its first property in 1980 with the building of The Centrepoint, a shopping centre in the heart of Singapore's Orchard Road. From owning one shopping centre in the 1980s, we have become a multi-national company with businesses across five asset classes. The assets range from residential, retail, commercial and business parks, to logistics and industrial properties in Singapore, Australia, Europe, China and Southeast Asia.How do you acquire more properties? What are the expansion plans?
We have on-the-ground business development teams in all of our key destinations to help acquire and expand our portfolio across Europe, Asia, Australia, China and Singapore. Our current focus is to develop where we currently are and strengthen our presence in key locations such as Germany, London, Singapore and Australia. We recently opened our first Fraser Suites property in Hamburg in the heart of the central business district.Why are you absent from North America?
America is a huge continent and to enter successfully, you have to enter with impact. The serviced apartment industry is already quite established in North America and, in order to ensure maximum effect, this would more likely be achieved through a joint venture or acquisition, not just one or two property openings within the continent. At this juncture, North America is not our focus right now.What differentiates Frasers Hospitality from other similar firms?
Everything we do is in the interest of the end customer and their experience. We believe this is what brings our customers back, increases retention, reputation and loyalty and ensures new customers through the power of word-of-mouth. This organic growth is what we strive for; we aren't numerically driven, and this ethos extends to our internal teams as well as our external customers. Happy staff deliver great customer service and we truly do believe this is what makes us different, with four core company values - collaborative, progressive, real and respectful - helping us stay true to this ethos.Where do you see the shared segment growing? Will it usurp traditional accommodations?
The whole industry is changing, and we can definitely see the desire for serviced apartments growing as people are choosing flexibility, more space and the opportunity to live like a local. We are seeing this demand more in the 'aparthotel' sector than the full lodge offering and are also noticing the evolving shift to shared and co-living as people want to be sociable and network with like-minded others. I believe traditional accommodations such as The Savoy and The Ritz will survive given their iconic status, but co-sharing is likely to overtake the basic hotel format as we know it because guests are continually looking for more than just a hotel room and want to feel a sense of place.Is Frasers Hospitality going to be eaten by the Airbnb juggernaut? Is there room for anyone else?
As long as we continue to adapt, evolve and listen to what the customer wants, no it won't. There's room for everyone in the shared accommodation space and the demand is only getting stronger. Airbnb is clever and has brought a sense of awareness to the different types of hospitality offerings that are out there, which is only helping to drive growth in the sector and raise the profile of all other operators in this space.
