The dynamic and fragmented serviced apartment market continues to mature, as the lines blur between the pure hotel sector and its long stay peer.
The latest arrival in the space is from hotel company Room Mate, which is linking up with apartments close to its hotels, and offering guests the combination of an apartment stay, with hotel level of support provided via the neighbouring property. With a strong base in its home Spanish market, the company is looking to expand internationally.
Room Mate has launched the service with a portfolio of 2,500 apartments across 10 cities, all within walking distance of partner hotels. The idea is the brainchild of Enrique Sarasola, founder of Room Mate, which was launched in 2005 and currently operates 18 hotels in 12 cities. “We were eager to offer consumers a new way to travel. In founding BeMate, my goal was to create a new service that seamlessly integrates the comfort and privacy of a home with the services of a traditional hotel.”
BeMate expects to be able to offer apartments across 200 cities by the end of 2015, and will launch mobile booking apps later this year. It vets the properties, with the portfolio including everything from a studio flat to four bedroom homes.
The idea is that guests will access the hotel’s housekeeping, airport transfers, babysitting, luggage storage and food and beverage offering, while staying in their apartment down the street. A 24 hour concierge will also deal with any problems normally handled for hotel guests. BeMate will also act as a booking service, managing all arrangements on behalf of the third party apartment owners.
Currently, Room Mate has 18 hotels across Spain, Mexico and the US, and Florence, Amsterdam and Istanbul in Europe. The BeMate launch cities are Madrid, Barcelona, Granada, Salamanca, Malaga, New York, Florence, Amsterdam, Mexico City and Miami.
Meanwhile at established Irish aparthotel operator Staycity, plans are afoot for a new, premium brand for gateway city centres. The company has signed a 35 year lease on a building in London’s Covent Garden, where it will open the first of the new upmarket sites with 106 apartments, due for completion in late 2015. To differentiate its deluxe offering, the company has hired upmarket Dublin designers Heneghan Peng Architects.
“Covent Garden will be an exciting place for Staycity to operate,” said Staycity CEO Tom Walsh. “It’s a location surrounded by four and five star hotels, so the aim is to give our guests the eye-catching, cutting-edge feel of a top end hotel, while offering the fantastic value for money of a serviced apartment.”
“Our existing London properties in Greenwich and Heathrow are trading with very strong occupancies so we are confident Covent Garden will be hugely popular given its position in this bustling part of the capital.”
The site will be developed by Galliard, with the building purchased by an institutional fund manager on behalf of a pension fund: an indication that the fundamentals of the serviced apartment sector are becoming more acceptable to the investment community.
Staycity currently has more than 1,000 apartments in eight European cities across the UK and in Dublin, Paris and Amsterdam. A pipeline of openings will take the portfolio to 5,000 units within the next five years. The company has the backing of Irelandia, the investment vehicle of the Ryan family, one of Ireland’s wealthiest families and the power behind the eponymous low cost airline.
HA Perspective [by Chris Bown]: The big hotel groups like to keep their serviced apartment offerings separate from their hotel brands. Never mind that behind the scenes, resources are being shared – if you pitch up at the co-located Staybridge and Holiday Inn opposite London’s Olympic Park, the two have separate receptions, and distinct food and beverage offerings.
Set alongside that, Room Mate looks to be a more flexible way to offer both types of accommodation in one location, albeit using third party apartments. And if it is to achieve its aggressive growth figures, then there will be third party hotel partners, too. Which makes the service comparable, in some ways, with an apartment booking via Airbnb – except support is from nearby hotel staff, not the property’s owner.
How well will it work, as an idea? The answer will be down to online visibility and effective distribution; and to the careful balancing of supply and demand. BeMate will also need to be aware of the other problem Airbnb has come up against, that of local regulations restricting short term lets.
Staycity has realised that city centre sites cost considerably more – but that the way to recoup those costs, is to charge more. A premium brand is being developed, to sit alongside Staycity’s bright yellow logo; and with London’s famously high hotel rates, the higher prices will stick. The question for Staycity is where else to take its luxury brand, and how to clearly differentiate it in the market.