Apartment, sweet apartment?

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While many corporate travellers love the predictability and service offering of large city hotels, with the bottom line under scrutiny as never before, business travellers are increasingly looking towards executive apartments as a more affordable, flexible option for long-term travels.

Are you tired of anonymous chain hotels, porters perennially touting for a tip, or an endless queue at the breakfast buffet? Well, it seems the answer is ‘yes’ for many corporate travellers. “We have witnessed a growing trend by companies wanting to rent a long-stay apartment for their staff members,” says Andrew Stark, General Manager of Flight Centre affiliate Corporate Traveller. “When a staff member is assigned to a project out of town that requires an extended stay, a long-stay apartment makes financial sense.”

“A corporate traveller needs three basic things – a good bed, fast and reliable Internet access and a fairly decent breakfast,” remarks Izelle Nell, Marketing Manager for Court Classique Suite Hotel and Sentinel Executive Apartments in Pretoria. “Apartments usually tick one or two of the three boxes, with breakfast being the one that falls out. But, a corporate traveller is usually out early, might have breakfast meetings and therefore does not need the traditional buffet breakfast one would expect from a full-service leisure-focused hotel.”

“Apartments offer the convenience of a hotel, at a fraction of the cost,” says Astrid Dressler from 20 West Executive Apartments in Morningside, Johannesburg. “Currently, we are about 25 to 30 percent cheaper than the 5-star hotel competitors in our area. Yet, instead of a hotel room, our guest receives a spacious, modern and luxurious fully-equipped apartment.”

The space and flexibility of an executive apartment are key selling points, agrees Linda Knoetze, General Manager of Westpoint Executive Suites – also in Morningside, Johannesburg: “The guest has a much larger space compared to the size of a hotel bedroom. Guests also have the option of holding meetings in the privacy of their own apartments, and not in a public area, at no extra cost.”

Elbie Taljaard, Group Manager: Business Development for Urban Hip Hotels, picks up on that point of more space. But, for her, there’s more to it than that. “For most business travellers, stays in a traditional 4- or 5-star hotel no longer makes economic sense. Apartment hotels have a number of advantages over traditional hotels. Amongst others, they are typically larger than most hotel rooms, they are conveniently located in the heart of most cities’ business districts, and offer better in-room facilities to allow the corporate traveller to work in comfort”.   

Yet, while apartments usually offer more space than a conventional hotel room, not all serviced apartments offer the same suite of facilities as a traditional hotel. And “most corporate travellers want the services that go with a traditional hotel,” argues hospitality industry stalwart Nick Seewer, CEO of Cape Town’s Pepper Club Luxury Hotel & Spa. “They like to know that they can come home to a clean room, work in their room or business centre, and generally enjoy what the hotel has to offer. Serviced apartments tend to be more sterile and do not really offer this.”

“When it comes to more than one person travelling, then [an executive apartment] is good value for money,” says Sharon Nash, Corporate Manager for Club Corporate Travel, but for short stays “corporate travellers still prefer a full-service hotel.”

Another issue to consider is loyalty programmes for frequent travellers. Although a handful of executive apartments reward regular guests with upgrades and discounts, many frequent business travellers like to be able to accrue rewards that can be redeemed at a selection of partners. Apart from that, it’s often the length of one’s stay that is key to deciding whether or not to opt for an executive apartment.

Whether it’s a convention, short contract or long-term secondment, serviced apartments are certainly better suited to long-term stays, offering extra space, lower rates and the chance to ‘live like a local’. “For extended stays it is evident that corporate guests are opting for a ‘home-away-from-home’ as an alternative to the shoebox solution at entry-level corporate hotels,” says Marcos Ledesma from the upmarket Lawhill Luxury Apartments in Cape Town’s V&A Waterfront.

And although there’s often a barrier of unfamiliarity to staying in an apartment rather than a hotel, “once a corporate traveller has familiarised themselves with our property, and the services we have to offer, they usually convert to using apartments more frequently,” adds Ledesma. Operating at the top-end of the market, Lawhill offers a 24-hour reception, daily servicing, pre-arrival shopping and complimentary parking… services above and beyond many mid-range hotels.

“Serviced apartments are definitely blurring the lines” between traditional corporate hotels and self-catering accommodation, suggests Nell of Court Classique, which underwent a R4.5-million refurbishment before the 2010 Soccer World Cup and was voted ‘Best All-Suite Hotel in South Africa’ in the 2011 AA Travel Awards.

In addition to value-adds like complimentary Wi-Fi and a shuttle service within the Pretoria city centre, Court Classique is also cleverly catering for self-service travellers with unique facilities such as an in-suite food shopping service from a nearby Woolworths.

“It’s ideal for someone who has been in meetings all day and just wants to ‘heat-and-eat’ over a quiet glass of wine while mulling over the day’s memos,” says Nell.

“Travellers lose out on absolutely nothing, in fact they receive more by staying in an apartment,” says Dressler. “Apartments are serviced on a daily basis, and we offer a complimentary laundry and ironing service three times a week. We offer a full DSTV satellite bouquet, Internet access, 24-hour reception and security, air-conditioning and complimentary undercover secure parking.”

Yet, while executive apartments are often only too happy to include added value offerings to lure new business and repeat customers, it’s just as important to be aware of the extras that are often not included in an apartment’s nightly rate. Daily housekeeping is often charged as an additional cost, so too Wi-Fi, parking and replacement linen. And a Nespresso coffee station with complimentary pods? Don’t get your hopes up.

“When you start adding up your extras it might end up costing you more to stay in an apartment,” suggests Nell. “The traveller would have to be in tune with his/her own needs to make a comparison that fits their concept of value-for-money.”

However, the fact that many facilities – conferencing, dedicated restaurants and branded spas – are not included at many executive apartments, also means that the running costs are not included in your nightly rate. While these facilities are often available on request, they come at a price. So, only the user pays.

“F&B, conferencing facilities and services are usually built into hotel rate, whilst in apartment-style accommodation like Lawhill, these unnecessary costs are excluded,” explains Ledesma. “Hence our running costs are lower.”

And lower running costs (usually) translate into lower room rates. And in tough economic times it might just be worth making your own bed if it’ll save a few hundred rands or dollars a night. But, are serviced apartments – with, or without, the bells and whistles – really that much cheaper per night? Unsurprisingly, the jury is out.

“There are so many choices right now and most full-service hotels will drop their rate to get the business. So a conscientious traveller who has done some research might just get a better deal staying at a hotel,” admits Nell.

“In today’s economic world it has become a buyer’s market,” agrees Seewer. “Corporate hotels compete very aggressively with the serviced apartments.”

But “hotel rates are also mostly per person, where apartments would be an inclusive rate for up to two guests per night,” reminds Knoetze, adding that apartments also offer greater “flexibility when it comes to pricing per period of stay.” How long you’re in town for is key and executive apartments often have very different terms when it comes to length of stay, with many only considering bookings of less than seven days if there is availability.

“Should we be able to assist a short-staying guest (one week or less) we would do so, but primarily our product is suited to guests staying 14 nights and longer,” says Knoetze.

And although some establishments will happily reserve you an apartment for a single night, the rate for longer stays drops dramatically. “We accept any length of booking – one nighters, to a year – [but] we incentivise our guests to book extended stays by offering better rates every seven days,” explains Dressler. “Our current price for a two-bedroom 110m2 apartment is R1520 per apartment per night for one to seven nights, or R1245 per apartment per night for over 28 nights.”

That’s almost 20 percent cheaper per night and, as they say, money talks. While value-adds and innovative services may blur the shades of grey between executive apartments and traditional hotels, the decision over where long-stay business travellers unpack their bags will ultimately come down to the cold reality of black and white numbers.

Richard Holmes

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