Serviced residences battle it out with disruptive players.
The digital revolution has brought about the likes of Airbnb, posing a huge challenge to the traditional players within the field of accommodations.
Weak economic growth in Singapore and economic uncertainties across the globe are making it a challenging time for Singapore’s serviced residences sector. All hope is not lost, as it has consistently survived uncertain economic environments and has gained a reputation for continuous growth over the years. Despite some bright spots, the serviced residences sector needs to keep close watch amidst the moderate business outlook.
Arthur Kiong, chief executive officer of Far East Hospitality, thinks that companies will be more likely to curb spending in relocation and employee mobility. As such, human resource managers are challenged to seek accommodation for foreign business travellers whilst stretching budgets. This is where the service residences sector can come in and offer its value proposition. However, on the supply side, managers and owners of serviced residences need to step up their game in the face of changing demands.
The city’s labour crunch is forcing employees of the service industry to multitask within and across departments, thereby highlighting the urgency for increased digital innovation. Henrietta Chong, general manager of Great World Serviced Apartments, says that although the service industry prides itself in having a personal touch for every service it renders, a move towards automation cannot be avoided.
Serviced residences have to leverage their advantages at a time of grim economic outlook. In fact, Kiong says that the demand for serviced residences has grown over the past decade. This demand is fuelled by improved product knowledge, understanding of product benefits amongst corporates, and the arrival of major reputable brands into the sector. “The demand for serviced apartments is very closely linked to industries that rely on foreign talent and skills who require mid to long-term accommodation due to the nature of the projects that they are involved in. These industries include financial services, engineering, and IT-related projects, amongst many others,” explains Kiong.
Business leisure – commonly called ‘bleisure’ – has become the newest trend in travel. The growing interconnectedness of markets combined with the energy of today’s young workforce have made this trend possible. Chong says that against a backdrop of austerity measures, the advantages of serviced apartments surface in meeting the needs of unique types of travellers.
“There’s a shift in the serviced apartment sector in response to demand for greater flexibility in room bookings and pricing, and this has resulted in some traditional long-stay providers diversifying their target segments to include short-term guests. In Singapore, the increased supply of hotels and serviced apartments is likely to outpace demand as managed travel continues to come under pressure in a globally uncertain and volatile environment,” says Richard Tan, vice president, Serviced Suites, Pan Pacific Hotels Group.
The digital revolution has also brought about the likes of Airbnb, posing a huge challenge to the traditional players within the field of accommodations. Clara Beng, general manager, Frasers Hospitality, says that it would be foolish to ignore the impact that Airbnb has made on the hospitality industry. With the rise of service providers such as this, companies are encouraged to remain competitive and rethink their entire distribution strategy. In fact, a lot of hotels are looking to merge with distribution channels to improve
their online distribution.
“The entire consumer landscape of instant gratification and technology advancements, as reflected in the emergence of brands like Uber and Airbnb, has kept us on our toes. It has pushed us to enhance our guests’ experience with us, be more efficient in responding to guests’ feedback, and is a good reminder that our customers are at the centre of everything we do. This is vital as customers will vote with their feet as their choices abound,” notes Beng.
Furthermore, Chong says that travellers are more tech savvy and more discerning these days. With the seemingly perpetual rise of Facebook and Instagram users, companies have to catch the interest of customers, prevent negative feedback, and stay relevant to the tastes and preferences of the travelling community. “Any single negative feedback can be loaded onto any social media platform in a blink of an eye. And whatever is posted onto the Internet is there to stay forever. Our continuous effort to be a ‘green building’ helps to market us to the environmentallyconscious travellers. We are always finding ways to adapt our work processes to lessen the impact on the environment,” adds Chong.
Creative solutions Serviced apartments have to keep p with the innovation game in order to meet travellers’ evolving needs and preferences. Kiong says that business travellers across all industries are no longer just looking at accommodation offerings with business elements such as WiFi and a business centre, but also at options that offer activities outside of their business agenda.
“Far East Hospitality has made a conscious effort to bring ‘Far More’ choices to its guests by situating properties in prime business locations such as the Orchard district, North east, and West Coast area.” According to Kiong, this allows guests to select the accommodation located closest to their offices or the hot spots they would like to explore. Kiong says that Far East Hospitality differentiates its guest experience across its brands. Oasia targets business travellers looking for wellness whilst on the road; Village caters to business travellers keen to explore the local culture; and residences in Orchard, Clarke Quay, and Robertson Quay aims for travellers with offices in Singapore’s CBD.
Pan Pacific Hotels Group cites the increasing prevalence of mobile as an information and booking channel as well as the shorter lead times for online bookings. Tan says that in order to stay competitive, they are constantly looking for ways to enhance the guest experience through technology. For instance, Pan Pacific introduced handy phones to allow residents to stay connected throughout their stay with unlimited mobile internet access and complimentary calls to selected countries.
Norman Lim, country general manager, Ascott Singapore, notes that they are the first serviced residence brand in Singapore to work with Fendi Casa, a top Italian luxury brand, to fit their penthouse suites in Ascott Orchard. Ascott in Singapore has more than 1,000 units across nine properties operating in prime locations. “Our decision to work with it is inspired by the property’s location in the heart of Singapore’s fashion district.
Additionally, Fendi Casa’s brand philosophy of ‘elegance,’ ‘timelessness’, and ‘artisan excellence’ are in line with Ascott’s brand personality. With this, our portfolio in Singapore increases to eight, with an inventory of 995 units, providing guests who visit the Lion City more options to choose from,” says Lim.
Meanwhile, Beng forecasts that there will be a rise in mergers and acquisitions, as companies aim to boost their market share. Recently, Frasers Hospitality purchased Malmaison Hotel du Vin group, allowing Frasers to double its offerings in Europe, whilst further strengthening its global expansion plans to achieve the goal of 30,000 units by 2019.
Who made it to the SBR’s list?
Great World Serviced Apartments, managed by GWC Serviced Apartments Pte Ltd, remains on top with a total of 304 units. Fraser Suites Singapore of Frasers Hospitality and Orchard Parksuites of Far East Hospitality maintain their respective ranks at 2 and 3. Fraser Suites and Orchard Parksuites have 255 and 223 total number of units, respectively. The properties included on this year’s list of Singapore’s largest serviced residences have a combined total of 5,740 units.
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