Branding in the serviced apartment sector

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The mainstream hotel chains are renowned for their constant stream of new brands, each promoted as the answer to the needs of a new demographic trend. In the serviced apartment world, this trend has been much less pronounced but the last 12 months has seen seen a flurry of branding activity, and we can expect much more to come.

The two Singapore-based giants, Ascott and Frasers, have both launched new brands over the last year, and their moves are some of the most interesting, and potentially most significant, in the space.

In March 2016 Ascott unveiled its Tujia Somerset brand of serviced residences, to cater for the increasing demand from China's middle class travellers. The brand is a result of Ascott's joint venture with Tujia - China's equivalent to Airbnb. It has signed contracts to manage six properties to be operated under the Tujia Somerset brand. These represent the first joint branded partnership since Ascott invested £55 million in in August 2015. As part of the deal, Ascott also invested a further £26 million in a joint venture with Tujia to operate serviced apartments located within the key growth cities of China.

Ascott has also taken a leaf out of the hotel chain book by launching The Crest Collection, a "soft brand" under which it will manage some if its most prestigious properties, and those of other owners.

Lee Chee Koon, Ascott's CEO, said: "Ascott has a strong track record of product development and design expertise, from preserving heritage buildings to converting offices to serviced residences. Since we started with an extensive refurbishment programme in 2010, we have invested S$230 million to renovate 45 properties globally, 23 of which are Citadines properties in Europe. The Crest Collection opens up more opportunities for us to work with property owners who want Ascott to manage their property while maintaining its unique features."

Frasers Hospitality has signed an intriguing co-branding partnership with German car giant Mercedes to launch Mercedes-Benz Living @ Fraser as it looks to premiumise its offering, one of our key trends for 2016. From November 2015, visitors to London have been able to book six serviced apartments that have been designed by Mercedes-Benz Style. A further nine apartments  in Singapore followed, and the partners aim to roll the concept out to other key cities if it is successful.

Wilfried Steffen, head of the Business Innovation department at Mercedes said: "More and more people are permanently on the move. They live and work in unfamiliar cities where they are looking for a 'home away from home' and a sense of security. That's exactly what we want to offer them - and at the very highest level and with the perfection and quality that you'd expect from Mercedes-Benz. Our aim is to turn the idea of the Mercedes apartments into a functioning business model as quickly as possible."

Frasers has also shifted the marketing emphasis behind its Modena brand, repositioning it as catering to business travellers with "green-conscious lifestyles". "This new greener Modena by Fraser concept is in line with Frasers Hospitality's commitment to driving greater environmental awareness," said Choe Peng Sum, CEO of Frasers Hospitality. "With this fresh take on Modena by Fraser, we are pleased to be offering travellers a more conscientious and sustainable approach to stylish urban living. They will have everything necessary to meet their demanding lifestyle needs and the opportunity to be a part of our green practices without compromising on their lifestyle needs. This fits in very well with travellers' increasing preference for sustainable accommodation that takes care of them and the environment concurrently."

An interesting recent development is that a number of companies are turning away from the term serviced apartment in their branding in favour of aparthotel or apartment hotel. Australia's market leader Quest - which is expanding in to the UK this year - spent AUS$10 million on a rebrand in August 2015, changing its name from Quest Serviced Apartments to Quest Apartment Hotels. CEO Zed Sanjana said: "Market leadership is about continuous evolution; it is vital we lead the industry in meeting the needs of tomorrow's business travellers. We are modernising and future-proofing the brand, continuing to speak directly with our guests to ensure we understand their needs in terms of location, product and experience, and adapt accordingly."

BridgeStreet Global Hospitality has added an aparthotel brand, called Mode, to its stable. Launched at Berlin's International Hotel Investment Forum (IHIF) in March 2016, Mode Aparthotel by BridgeStreet is based around "retrofitting existing buildings to ensure the authenticity of the destination which will create a hospitality solution like no other".

"Both guests and developers will be delighted with Mode Aparthotel," said Paul Rands, BridgeStreet's VP of development. "Retrofitting existing buildings alleviates the pressures of minimal building space in city centres. This strategy is the underpinning for Mode, with the long term target of 20 to 30 Mode by BridgeStreet properties open or in active development within four years across the Americas and EMEA."

In the US, Jack DeBoer, known as the founder of the extended stay sector, has launched WaterWalk Hotel Apartments, the fifth brand he has brought to market, having successfully launched and sold the Residence Inn, Summerfield Suites, Candlewood Suites, and Value Place/Woodsprings brands.

The major hotel chains have also been active in the space, albeit with very different strategies. Hilton Worldwide is to merge three of its extended stay brands to create the All Suites collection. Under the initiative, Embassy Suites by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton will be combined under the new single brand, creating a new portfolio of more than 600 all-suite hotels across the Americas. Between them, the three brands to be merged comprise nearly 15 per cent of the company's current inventory and almost 20 per cent of its pipeline, in terms of rooms. Hilton also announced plans for its first Curio-branded property in the UAE, in partnership with Royal International. Located on Sheikh Zayed Road, the two-tower Rosemont Hotel and Residences will feature 450 hotel rooms and 280 serviced apartments.

Accor, the parent company of aparthotel brand Adagio, has been concentrating its financial firepower on the short-term rental space, buying onefinestay and acquiring a 30 per cent stake in Oasis Collections.

And Carlson Rezidor executive vice president and chief development officer Elie Younes says the group "has been pulled in to the extended stay sector by investor and consumer demand", and now has 30 extended stay properties. "There is a lack of brand awareness in the sector which we can capitalise on with our hotel brands," he says.

Other active hotel groups have been Minor Hotel Group, which has launched its Oaks serviced apartment brand in India and plans to roll it out in the Middle East; and Banyan Tree, which is taking its Cassia brand to Australia.

The last 12 months has seen some notable new brand launches in Europe. Dublin-based serviced apartment provider Prem Group has launched two sub-brands, Premier Suites and Premier Suites Plus, while Zoku, the extended stay/work space hybrid from Citizen M founder Hans Meyer has recently opened its first property In Amsterdam later this year, to be followed by two more sites in Paris.

In Switzerland, James Fry and co-founder  Frederic Mydske have opened the first Base-branded property in Nyon.

Fry says: "I come from a family of entrepreneurs and have previously set up an internet company before moving into property development. My old boss pointed out that all the power is with the companies that control the best brands. I wanted to develop a meaningful brand in the hospitality sector and identified the serviced apartment sector in Switzerland as being poorly represented but having a high demand. Neither Fredric nor myself are from hotel or large corporate backgrounds. We came at the problem with a fresh approach without being influenced by a big corporate culture or decision by committee."

The pair aim to grow to at least five sites open or under development in Switzerland over the next three years, and to grow to multiple destinations across Europe.

Thai-based operator Onyx is planning a significant roll out of its Shama serviced apartment brand across Asia Pacific and the Middle East as a result of a recent joint venture with Singapore Hospitality Holdings. Shama currently has a portfolio of 10 properties in China, Hong Kong and Thailand, with an additional six properties under development in Malaysia and China.

The last 12 months have probably been the most active in terms of branding activity in the space, and I fully expect the momentum to pick up over the next year as new entrants come in to the market, and existing players diversify their brand portfolios.


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