The 2016 ASAP Serviced Apartment Convention saw 400 delegates come together on Thursday 1 December, at etc Venues, Bishopsgate, for the key annual gathering of the serviced apartment sector.
James Foice, CEO of the ASAP, opened the event highlighting the impressive 31% growth in membership of the Association to 175 members in the last year. The success of ASAP’s Quality Accreditation Programme has been especially significant, particularly internationally with quality accredited operators now in over 130 cities across the world including 37 operators in the USA and Canada, thanks to ASAP’s strong partnership with the Corporate Housing Providers Association (CHPA).
The first international chapter of the ASAP was announced in the Netherlands and Richard Whittaker, Deputy Chairman of the ASAP confirmed that the Association is looking to increase its global reach through further affiliations with other associations.
Quality accreditation was confirmed as the top membership benefit by 60% of ASAP’s members in the recent members survey, with networking events (25%) next most important. James Foice urged all members to get behind the promotion of the Quality Accreditation Programme throughout the world, and mentioned there has been interest in the programme in India, Japan as well as in West and East Africa.
The new ASAP HR Strategic Think Tank Group was congratulated on a number of achievements in 2016 including a careers campaign in the Caterer’s ‘Check-into-Hospitality’ publication, publishing a new Careers Guide for the sector as well as establishing new partnerships with both the University of Surrey and Bournemouth University. There are also plans to unveil an ‘ASAP Academy’ offering an executive leadership programme for the sector in 2017.
The new ASAP News hub and information portal has been particularly successful since its launch a year ago, with 120k page views and 11k unique views to date.
Mark Wynne Smith, Global CEO, Hotels & Hospitality at JLL then gave a short overview highlighting that it had been a difficult year across the travel and tourism sector but that the signs are that 2017 will be better, with lots of positives after the Brexit vote, the rise in bleisure travel and in people seeking alternative forms of accommodation. He commented that, if managed correctly, the disruptive rise of Airbnb is: ‘good for the industry by shaking things up, increasing choice and makes us more dynamic’. He confirmed that there is currently huge interest in our sector particularly from investors in China, Singapore, Hong Kong, Australia and other offshore watchers but that vital for the future is the ‘sharing of data on assets’. He also commented that within 15 years it’s forecast that up to 30% of all office space will be occupied on a short-term basis (eg rented out for an hour or more) as we become more used to the sharing economy in all forms.
The ‘State of the Nation’ panel followed. Chris Bown, Hotel Analyst introduced the session identifying the big global issues as: the merger of Marriott and Starwood; rising Chinese interest in the sector; Airbnb; Accor’s new distribution platform; and booking challenges ie direct or via the OTAs.
BridgeStreet’s CEO Sean Worker stressed the need to embrace change in the industry with their partnerships with both Onefinestay and Airbnb. He confirmed there is much better awareness of our sector now, and that it’s much more professional; and he also highlighted how important it is to BridgeStreet for them to be quality accredited by ASAP, as well as the importance of real-time booking.
Gavin MacLennan of Lateral City gave an overview of the sector in Scotland confirming that the market in both Edinburgh and Glasgow was very buoyant, but that in Aberdeen it was very tough with the decline in the oil industry. There are a lot of new developments opening in Edinburgh including Adagio, SACO and Apple Apartments in the coming months, and confirmed Airbnb was ‘another route to market’, a way of generating awareness and filling void periods. But he stressed it was essential to invite corporate bookers to come and see the real benefits of serviced apartments for themselves.
James Swift of Urban Stay commented that it had been a ‘rollercoaster of a year’ in London terms of occupancy and rates but good opportunities were coming up in 2017; and that ‘Airbnb can never offer our product quality’. He also confirmed that agents bring a lot to our industry by acting as a consolidated base.
Geoff Ramm then delivered a very powerful keynote, captivating the audience with humorous examples illustrating the importance of ‘coming off your plan’ and seizing opportunities to create special ‘OMG’ marketing moments as a powerful way of differentiating your brand.
The seminar programme featured a total of 9 seminars with the first 3 seminars running concurrently before lunch:
- Seminar 1: The Future Guest: Mandy Saven of Stylus gave some fascinating insights into trends in travel; currently 93% of customers are led by reviews and 66% consider and compare a variety of hotels before making a decision. Travellers can now build a tailored trip through apps such as ‘Flykt trip booker’ app; ‘Lucky Trip’ is another option – all this is known as ‘structured spontaneity’ particularly targeting millennials. Another new segment is ‘Globizens’ ie global travellers who’ve worked for 15-20 years and looking for a communal experience-led travel experience– for anything from a few weeks to a full gap year. She confirmed that the traveller today is particularly influenced by sustainability, diversity and responsibility with brands displaying their commitment to charity eg The Good Hotel and Hotels for Good– reaping the benefits.
- Seminar 2: Today’s digitally inspired traveller: Gavin Pereira, Check-in-London.com looked at how online booking of travel has grown from 3% in 2000 to 52% by 2017 and stressed that the growth of mobile is particularly significant, especially for last-minute bookings. Anthony Rawlins, Digital Visitor, confirmed that booking accommodation is definitely an ‘emotional choice’ but challenged us to come up with a very clear message around what serviced apartment brands stand for ie are we a hotel but with more space and amenities or an Airbnb with brand standards? He urged us to make more use of video and stressed the importance of scheduling content and promoting the wider area, what to see and do in the local area etc. Facebook advertising can be particularly cost-effective in terms of ROI compared to traditional media and he recommended working with bloggers (around 8,000 in the UK) – ‘the modern day word of mouth marketing’.
- Seminar 3: Wellness in the workplace: Our expert panel – Sally Bogle, Transcape, Rachel Suff, CIPD and Jane Sunley, Purple Cubed – explained that it’s been proven that the more engaged employees are in their company, the less stressed they are and that while many employers take steps to promote health and wellbeing, few have an actual strategy. It’s crucial for employee wellbeing to be an integral part of the company culture and not a bolt-on. Stress (often due to workload), physical injury and mental health are the 3 most common causes of long-term sickness absence. Assigning mentors to help staff develop is important and it’s crucial for employers to trust their people and offer support when mistakes are made. Asked if there was anything we could learn from trendy companies like Facebook and Google, it was confirmed that they have a sophisticated people management structure and recognise people also want to interact on a social level.
After lunch motivational speaker Nigel Risner inspired everyone with his highly entertaining keynote where he explained how we need to ‘become a zookeeper’ and recognise that people can be divided into 4 core animal groups based on their communication style ie monkeys, lions, dolphins and elephants and we need to communicate with each group differently.
The afternoon seminars:
- Seminar 4: What impact will our departure from the EU have on our serviced apartment sector? Moderated by Severine Obertelli of Maxxton, this seminar began with Jon Neale, Head of Research, JLL confirming that GDP growth will slow in 2017 and there are some signs that businesses are becoming less confident. We’ll see some inflation which will have an impact but the weak pound is good for hospitality boosting inbound business and there’ll be more UK residents holidaying at home. And there could be opportunities – we’ve seen encouraging recent announcements by eg Facebook and Apple increasing staff in the UK. It could be difficult couple of years with slower growth. Tony Matharu, MD of Grange Hotels, who began developing a large new aparthotel pre-Brexit confirmed ‘he’d do the same again’ though admitted it’s easier as a larger operator with a number of locations so the risk can be spread. Although there have been challenges, they’re still doing good business in London though stressed the need to be sensitive about relationships as some PCO’s have pulled business out of the UK. He confirmed however that security remains the biggest concern worldwide. Shaun Hinds of BridgeStreet commented that there’s been a period of speculation but they’ve not had one client say they’re scaling down business though they are noticing some changes re length of stay shortening, some group bookings have been smaller and they’ve seen more leisure business. He stressed the importance of being adaptable and willing to change. And there will be opportunities – it’s claimed that there could be up to 30,000 jobs required to effect the Brexit process which could benefit the sector. Enrique Alcantara, President Apartur (Association of Apartment Operators in Barcelona) confirmed that bookings from the UK did reduce from 12% to 10% post Brexit and that the exchange rate has had an impact. But there is an opportunity to change their business model, and they may move to more corporate business in future. However there is ongoing uncertainty regarding the 700,000 people working in hospitality who are EU nationals (15% of the entire workforce in the sector), as to whether post Brexit they’ll be able to stay in the UK. Jon Neale stressed that there is also considerable uncertainty ahead with the elections in France and Germany coming up in 2017 and the fact that ‘Britain needs to be seen to pay a price’ for leaving the EU. BridgeStreet was asked if they had changed their strategy to invest in the UK but Shaun Hinds confirmed they hadn’t changed their plans and weren’t cooling down in the UK and have a development pipeline in a number of European cities, confirming ‘London had been a bumpy road this year but the rest of the UK had done very well.’
- Seminar 5: ‘Preparing your business for the unknown’ Speakers: Max Thorne, JLL; Neil Taylor, Cheval Residences; Roger Gomm, Roger Gomm Ltd The panel stressed the importance, in terms of business risk management, of everyone being prepared for a situation beyond their control – eg in the event of discovering an unexploded wartime bomb or a flood – by having a comprehensive plan which covers preparation, warning, communication (tapping into all available sources, such as Messenger and WhatsApp) and recovery. The plan should have buy-in from all staff, should be accessible (off-site as well as on-site), there should be some precautionary pre-event role playing and a team meeting held as soon as possible after an event to make sure everything is done properly. Delegates were encouraged to watch the video ‘Run, Hide, Tell’ from the NPCC and to bring this same focus on physical and personal safety into their business. In terms of future development, Max Thorne, JLL stressed that, as the sector grows, operators need to cater for shorter, less expensive stays in a smaller apartment which still offers the quality and self-catering benefits of an apartment aimed at a longer stay guest. The key is to offer a broad range of different apartment options and we need to look at what hotel groups moving into the apartment sector are doing: sometimes in the same building they’ll offer both serviced apartments and traditional hotel rooms with separate dining and lounge areas.
- Seminar 6: ‘Be sustainable. Be accessible. Be profitable’ Jon Proctor, Green Tourism explained the financial benefits of being a green minded business with useful take-outs such as fitting adapters to taps to reduce water consumption. Jon talked about how to engage your guests in being greener and encouraged everyone to join the Green Tourism Scheme (only 13 serviced apartment operators are members). He spoke about the importance of promoting all green efforts to both business and consumer markets. Many businesses are already doing great things but not shouting about it. Go Native’s Sarah Pitt explained they take CSR very seriously and feature on TripAdvisor’s Green Leader board which means that people can select properties depending on how energy efficient they are. There can be simple things introduced very quickly eg LED light bulbs, turning the heating down, educating the cleaners on what they can do to help save energy. And it’s vital to promote your efforts – Go Native will be sharing their green targets on their website. More corporate clients are also looking for evidence in RFP’s of how carbon footprint is being reduced. On accessiblity, Tourism for All’s Chris Veitch explained that 19% of the population has a disability and that is likely to increase as we are all living longer. Being inclusive makes business as well as moral sense! All accommodation providers should produce access statements as standard as these allow guests to decide for themselves whether an accommodation or room type is suitable for their own personal needs. Chris has been working with VisitEngland and Visit Scotland on a new template for access statements. These new access guides are being rolled out in 2017. There can also be some quick fixes – such as preparing information in larger fonts for visually impaired people or having a hearing loop at reception.
- Seminar 7: The growing role of brand – How to make your company a game changer Mike Brandt, Author of Welcome to The Advertising Awesomeness, challenged delegates to think differently about their business by thinking more broadly about the business they are in, ie not just supplying accommodation but to focus on the wider needs of their clients – for example:
- ‘having freedom while exploring the new city business’
- ‘living a full life when away from home on business’
And to consider the additional services which could be offered to help guests settle in and lead a full life away from home in their serviced apartment – anything from specific foodstuffs and toiletries to supplying a guitar.
- Seminar 8: How can we inspire employees and retain them in operational management roles working effectively with other areas of our businesses? Stephen Hanton, SACO, introduced the session confirming that the sector is fast becoming mainstream which is driving higher operational expectations but needs good people to help it advance to the next stage. Turnover of employees can be as high as 34%. The panel – Professor Jackie Watson, University of Surrey, Andy Woodland, Chairman of Bournemouth Hoteliers Association and Abby Paterson, Careers and Education Director at Springboard UK – discussed the need to make young people more aware of the industry and how to progress within it, and educating them on what the job involves through work experience. Currently many teachers don’t talk about the sector positively as they see hospitality as an unattractive career path. It’s very important to create partnerships with universities. In terms of how to retain good people, it’s essential to develop select and focussed training. And good to look at best practice in other industries eg in the fast food industry their graduate training schemes are very good and have high retention, similarly John Lewis. Graduate programmes are a good way to bring in skilled employees but need to be focussed and graduates need to feel they are directly contributing to the company.
- Seminar 9: Zone in on your customers Andrew McMillan of Engaging Service explained that successful companies make it their mission to make sure that every second the consumer spends with them is ‘awesome’. Feedback is ‘king’ – be it positive or negative but it’s critical to empower staff to make quick decisions when negative feedback is received. Andrew recommended focus groups as a good way to clarify your external customer voice and to compare this to the ‘internal voice of your company’ and aim to analyse and fill the gap between the two.
Financial journalist Sally Bundock concluded the day with a fascinating round-up of key economic events in 2016 which she described as ‘the most surreal of her career’. It started with the decline of growth in China, followed by the shock result of the EU Referendum and then the recent Trump victory in the US election.
2017 outlook (OBR forecast): growth will slow to 1.4%; inflation 2.3% and unemployment 5.2%. Slowing growth in China is a concern and while India has had some challenges, it will be fastest growing economy in 2017.
But the announcement of £23bn investment in infrastructure announced by the Chancellor in the Autumn Statement is a welcome boost for the economy; positive also is Google’s recent announcement they’re creating 3,000 new jobs and a new £1bn HQ in the UK; Facebook are creating 500 new jobs and a new office complex; IBM is tripling its data centres in the UK.
Interesting to note that the ‘Gigster’ economy now accounts for almost 5 million people in the UK working independently.
However the political risk is high in 2017 with a number of key elections coming up in Europe.
Sally ended her speech with some advice on how critical it is to ‘be diverse’ and on the importance of collaboration:
‘By yourself you can go fast but together you can go far’
which she felt effectively sums up ASAP’s mission to create an environment where the serviced apartment industry can work together to develop to its full potential.