Serviced apartments seem like a relatively new concept, and in many ways they are, but the idea of self-catering accommodation has long been familiar in the leisure travel industry, and serviced apartments have substantial crossover appeal for business and leisure travellers.
It’s sometimes difficult for operators entering the serviced apartment industry to know whether to target their business towards leisure or corporate travellers, but attempting both could be a struggle: the two groups have very different requirements which are difficult to reconcile.
Leisure travellers tend to book further in advance than corporate travellers, which can be reassuring for apartment owners. They are also less likely to cancel so are generally happy to accept stricter cancellation terms.
Meanwhile, for corporate travel bookers flexibility is key: because projects may change in length or be cancelled, companies will rarely book with an operator who charges heavy penalties for cancellations and shortened stays. On the other hand, corporate travellers are also more likely to extend and make repeat bookings. They also generally book longer stays, with an average of between 3-6 weeks.
Because leisure travellers book earlier, operators intending to cater for both markets often find longer corporate stays blocked off by shorter leisure stays – weekends, or week-long stays, for example – which can be frustrating for everyone involved.
Corporate and leisure travellers also have very different expectations when it comes to rates. It’s standard practice in the tourism industry to adjust rates according to availability, but this model doesn’t work well for corporate travellers. Many corporations set up yearly preferred apartment programmes and will want assurance that the rates will remain static, so that rate caps aren’t exceeded.
While it’s common for leisure providers to ask for deposit payments and guest details for security, this isn’t always possible for providers aiming for corporate stays. Corporate travel bookers tend to eschew properties which require deposits and are often unable to provide guest details as bookings tend to be made through an HR department or a relocation agent.
On the plus side, corporate stays offer security in other ways: ultimately, guests answer to their employer, meaning they are less likely to cause damage or disruption.
The serviced apartment industry is still growing at a steady pace, so whether they settle on corporate or leisure stays, new apartment operators can look forward to a rewarding enterprise.