Extending the value of long stay accommodation
A worldwide surge in long stay properties, from renovated hotel residences to sophisticated newbuilds, is presenting business travellers with a more appealing ‘home away from home’ alternative. With growing demand pushing service and rates upwards, how can corporates negotiate with properties to extend value and traveller benefits?
Long Stay Right on Trend
Long or extended stay properties have become a serious contender in the corporate travel market, offering a new level of comfort, stylish and safe environments, and opportunities for travellers to immerse themselves in local communities.
The US continues to offer the highest number of long stay rooms, with evidence of extended stay properties outperforming the average hotel industry occupancy levels by 10% in 2014. Growing economies such as the UK, Australia, India and Hong Kong have also seen a spike in long stay popularity and demand over recent years. In Asia Pacific, for example, this sector is growing at around 20% year-on-year according to a leading supplier, Astra Apartments.
The key drivers of long stay demand come from regional and multinational companies with mobile workforces, particularly in sectors such as professional services, IT and infrastructure.
Astra Apartments Managing Director, Tom Jeavons-Fellows, says more companies are incorporating executive apartments into their transient hotel program to help control costs and give their travellers more freedom. “National and global corporates expect employees with specific skill sets to travel to maximise their value to the business. These staff would rather stay longer in their work location than suffer a weekly commute,” he said.
While road warriors have typified the long stay traveller for many years, properties are evolving to also attract the younger millennial travellers, who tend to stay for shorter periods.
The new generation of long stay services
Long stay suppliers are meeting the growing wave of demand with an enhanced range and quality of services that make their properties almost as appealing as the traveller’s home. Designed to give business travellers more comfort, more to experience and more to enjoy, these properties are providing contemporary stylish accommodation with an abundance of on-site offerings.
The traditional ‘office park’ style apartments are making way for more homely suites and rooms featuring chic furnishings, gourmet kitchens, washers and dryers, fireplaces and even private terraces. Higher-end properties now offer Michelin-star restaurants, coffee houses, client-only lounge and ‘club floor’ spaces, as well as fitness centres.
Hotel chains joining the race
In addition to independent long stay properties, global hotel chains such as Starwood, Hyatt, Intercontinental and Hilton are leveraging their trusted brand names and moving into this lucrative market segment to deliver a ‘local living’ experience for the traveller.
Hilton’s Homewood Suites and Home2Suites brands, are not only expanding in key cities but increasingly moving into urban areas and provide complimentary grocery shopping services, hot breakfasts, and ‘evening social’ drinks and food for travellers and their families.
Bill Duncan, Global Head of Brand Management for Homewood Suites by Hilton and Home2 Suites by Hilton describes their long stay offer as the “grassroots of service”. “You really get to know your customers and if you love to serve and like to execute a successful guest experience, this is a tremendous segment to be a part of.”
Hotel suppliers such as Asia-Pacific based TFE (Toga Far East) Hotels have structured deals to keep business travellers energised throughout their stays of five or more nights.
Director of Sales, Corporate and Government, Travel Partnerships and MICE for TFE Hotels, Shahnaz Bakhshay, says TFE has developed a benefits package specifically for monthlong stays. “Our long stay offering includes complimentary unlimited internet, no special event surcharges, priority room allocation, late check-out and flexible cancellation terms,” Ms Bakhshay said.
While many hotels now offer these extended stay benefits, higher-end properties are inviting their ‘residents’ to be part of cultural events such as local food and wine tastings, art exhibition previews, and social gatherings with local industry leaders.
Strategies to extend value
With demand for long stay accommodation on the rise, the challenge for corporate clients is to ensure value even as room rates rise. Five key strategies to achieve competitive prices and/or extend long stay value and benefits are considered below:
1. Use volume to negotiate - long stay suppliers can be open to rate negotiation and discounts if booking volume forecasts can be provided e.g. based on company projects to be implemented in specific locations during the year. The greater the volume, the greater the opportunity to negotiate the rate down.
2. Duration – the longer the travellers’ length of stay, the more competitive the weekly rate. For example, booking a three to four week stay can potentially cost less than booking two five day stays (at a higher weekly rate) and paying for additional flights to and from the location.
3. Consider the location – long stay properties in urban locations that are still relatively close to cities can have significantly lower rates than central city properties. Some travellers also prefer to stay in the more relaxed surrounds of local ‘communities’. Provided travellers have easy and cost effective transport access to their workplace, urban properties can offer substantial cost savings.
4. Avoid high-peak if possible – while project timeframes are not always flexible, it is best to avoid long stay accommodation during peak seasons or major sporting or cultural events in any given city, as rates will always be higher at these times.
5. Aim for value adds – as part of any negotiation, explore whether any services that would benefit travellers and are not currently included within the cost, can be provided free of charge e.g. complimentary breakfasts, dry cleaning and wifi services.
Long stay fast facts
• executives, employees, project teams
• short-term projects
• training programs
• long term projects
Stays from one week to one year
Apartment hotels & serviced apartments
• Fully furnished studio suites or one bedroom apartments with ensuite
• Kitchen or kitchenette and small lounge and dining area
• Dedicated work space
• Daily laundry service
Executive apartments/corporate housing
• Secure buildings with one, two or three bedroom apartments
• Fully furnished with larger rooms and a full service kitchen
• Most executive apartments provide all linen, weekly cleaning and an internal laundry service
• Dedicated Long Stay brands both stand alone and within global hotel chains
• Home away from home
• More relaxing
• More space & amenities to entertain
• No lease to sign
• All utilities bills paid
• More comfort means more productive staff
• Cost effective
• Competitive and consistent rates all year round
• Flexible payment options – invoiced prior to arrival however payment may
not be required until after check-out
• Booked within travel policy