Our news editor interviews ASAP Chairman Don James, who gives his thoughts on the sharing economy, quality accreditation, the ‘Right to Rent’ legislation and ASAP’s plans for the coming months.
Q: Has there been any change in the way Hotels view the rise of the Serviced Apartment sector?
It’s only relatively recently that hotels have taken alternative accommodation providers, including people such as Airbnb, seriously, as a threat. They’ve actually had over a decade to get used to Serviced Apartments growing as an alternative accommodation option. But now that they have taken note, there are still some within hospitality who see us as part of the so-called Sharing Economy rather than as a bona fide arm of traditional hospitality.
There’s plenty of space within hospitality for everyone with a quality offering for the traveller, and as Serviced Apartments we’re really a hybrid of both traditional and innovative. We’re branded, managed, and now – through ASAP’s schemes – accredited; and in fact ours is much closer to a Hotel-style offering than someone vacating their own apartment for a week to make extra cash.
Q: So how does this unregulated but growing Sharing Economy pose a threat to the whole hospitality sector?
A: In a number of ways. Government is rightly looking to catch the less ethical operators, those letting out multiple units on a regular, or even full-time basis, without any compliance with health and safety or customer care. And I think it’s generally agreed that this part of the industry should be regulated in some way – if only to make sure nobody dies as a result of carelessness or greed.
However, we as Serviced Apartment operators and agents need to build our joint ‘brand’, such as it is, to give those people unaware of us some reassurance that what we’re offering is a real, top quality alternative to other accommodation, and that we’re here to stay. Travellers are starting to buy into the concept, as we see from the Savills Report, and this is reinforced by the plans our members have to grow their portfolios and expand into new territories. But the Serviced Apartment ‘brand’ itself is relatively unknown still amongst many people and we need to change that.
Q: How important, then, is Accreditation?
The customers themselves have been looking for this for some time now. In any walk of life, especially in the 21st century, we all need the reassurance of a mix of reviews, case studies, professional standards and legislation that protect us from bad practice. It’s almost unheard of now to make impulse purchases just about anywhere in life. Data is so easy to find, you can almost pre-live experiences before even committing to them. But external professional endorsements, like ASAP’s accreditation, gives that extra confidence that something is not only ‘liked’ by someone else, but meets transparent standards.
What we have found is that there are sadly some get-rich-quick operators pertaining to offer Serviced Apartments when under our rules they could never become even ASAP Members, never mind meet Accreditation standards. We need to define the brand quickly, in its infancy, before there’s some “Watchdog” style scandal around an unethical operator and the industry’s name gets dragged into the mire. So we need to lead best practice around the brand. Obviously, in an ideal world, every serviced apartment operator would be required to be an ASAP accredited member, but as with the hotel industry, that will never happen 100% but our long-term goal is that every operator will be required to meet minimum health and safety standards, at the very least.
ASAP’s Accreditation programmes provide a clear and reassuring differentiator of quality in an increasing befuddled market especially as shared economy provisions increase. We have recently added to more strings to the assessment programs allowing individual properties & buildings plus an assessment program for OTAs. We just now need to make this known to Government, to work with them to help define policy guidelines across the sector. We need to say, we’re here, we’re gold standard, we’re compliant with all the rules, in fact we go a step further – customer safety is paramount, and here are the facts to prove it!
Q: Are you planning to create different bands of Accreditation, almost like star ratings for members?
We’re not sure that in today’s developing world, a ratings system that is based mainly on what a property physically contains is necessarily the way forward. A four-star hotel might be lacking in character, and even cleanliness, but the inclusion of a trouser press and a mug with a tea bag might ensure its rating alongside somewhere else that tries much harder to meet standards. Hence where reviews become important – and that’s something we are looking at for the future.
What we’re looking to first is to create a kind of index or database of members, and what they offer; but longer-term we’re looking to develop a platform whereby those researching our members and what they offer can really drill down into specifics and create their own wish-list of amenities and find the perfect accommodation for their needs.
We see time and time again that today’s business traveller is more bothered about super-fast free WiFi than a 24-hour concierge service – but that might be important to leisure guests, so that option also needs to be included. Ultimately it will feed that data back into the system so operators can make informed business decisions based on real customer needs.
Q: Will the new ‘Right to Rent’ legislation affect the industry?
A: It almost certainly will, and it’s disappointing that we weren’t part of any consultation on the forthcoming ruling. By far the majority of clients staying in a serviced apartment for more than 3 months are corporate business personnel, being provided temporary accommodation for work related reasons. The additional level of bureaucracy, where significantly more personal information will need to be passed through the chain of communication for each client in such a low risk, does appear to outweigh the likely benefit.
Once again, the Serviced Apartment sector gets associated with the shared economy rather than established accommodation markets, as though we’re trying to take advantage rather than offering a professional, 21-st century solution to a corporate accommodation need. We’re hoping to work with the Home Office to ensure decent, licensed and especially Accredited Serviced Apartments will be exempt from the Right to Rent rulings. There are some in the industry who already see us as part of the solution – Croydon Council for instance wants all landlords registered and inspected regularly, but has exempted Serviced Apartment operators from this.
Q: Do you see any impact on the sector if Britain leaves the EU?
A: The biggest issue facing our sector, whether we remain in Europe or leave, is the free movement of tourists across Europe whether on business or leisure. For instance, a traveller or businessman visiting Europe from China will not automatically get access to the UK without a separate, additional visa. So it’s good to see Visit Britain trying at least to simplify the application process. Our Chinese visa application process is the most inhibitive in Europe, yet we’re constantly being told that China is a huge source of future growth, in tourism and in business. And we see the growth in Serviced Apartments within China itself, it’s viewed as a normal part of the hospitality sector, so they are often looking to find similar accommodation here. And this is true of other sources of visitors from around the world.
A: It would have been great to see some movement in VAT on tourism, as stressed constantly by the BHA. And there are of course knock-on charges and taxes affecting the sector, directly or indirectly, from fuel duty to air duty. At least it’ll cost less to drive from England to Wales across the Severn Bridge in a couple of years – but that’s hardly changing the face of British tourism! Other than that, there was little to shout about.
Q: What does ASAP plan for the next few months?
A: We’ve got a number of different things planned, as well as generally trying to raise the profile of the industry.
For one, as we grow as a membership body and a sector, we’re keen to collaborate more with other stakeholders in our industry. These include other trade associations, governments, investors and a plethora of other interested parties. Whilst there will occasionally be competing interests, it’s important to recognise and develop the common ground we have enabling us to have a stronger collective voice.
I am especially pleased with the progress we are beginning to make here, linking arms with the CHPA, BHA and Visit Britain. We’re also working closely with EHHA, the European association for short term rental to help develop a European road map which covers the provision and use of Serviced Apartments.
All of our work is important in influencing government when establishing legislative, planning and competition policies around short term rental, and where it sits beside traditional hotel accommodation and the emerging shared economy.
We recently set up a series of strategic think-tank forums to help develop and drive the future direction of our industry, covering Legal, Communications, Data/Insights, HR & Operations. These are led and staffed by talented and experienced people mainly from within the hospitality industry, so with a vested interest in driving things forward. They’re tasked with different elements to raise profile, promote and drive best practice and keep us compliant – from seminars and events to defining the brand, from legal and tax information to nurturing the next generation. Our industry is rapidly changing, proactively and as the world around us changes. We need to be at the forefront of managing this.
The membership is growing – that is important – and I’m very encouraged by the decision the Dutch serviced apartment association to merge with the ASAP.
In the past we have the developed the Association’s professional team from just one from full time professional to 4. This now small but hard working team is making a tremendous difference to the way we support our members and the level of value added services we can provide.
And of course, we’re thrilled by the launch and continuing success of our newshub service. We’re developing further the scope of the site, but already we’re seeing featured articles gaining traction and positioning us as at the forefront of the Serviced Apartment industry, championing its place within the wider hospitality sector. We can offer profile to members as well as defining wider opportunities and threats, developments in technology and opinion across the world – in a global economy, we need to make sure our reach is timely, accurate and itself available across the world.