Latest / Host Planet: Airbnb, Holiday Let, and Vacation Rental Insights / Hotel Takeover: What STR Hosts Must Learn from the Serviced Apartment Giants

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Hotel Takeover: What STR Hosts Must Learn from the Serviced Apartment Giants · Host Planet: Airbnb, Holiday Let, and Vacation Rental Insights

0:00
I don't want to say I think it's a sad state of affairs.
0:02
I think it's a very exciting way to live and I absolutely do
0:06
think it will become the way of the future.
0:09
Why is serviced accommodation the future of flexible stays?
0:14
What can STR hosts learn from the serviced accommodation
0:18
sector? And how can our industry drive
0:20
more midterm and corporate stays?
0:23
Rebecca Holland's Van Locke from Fraser's Hospitality will be
0:26
answering all these questions and more on today's Host Planet
0:30
podcast. Rebecca, thank you for joining
0:37
us on the Host Planet podcast. Why are serviced apartments the
0:41
future of flexible stays and what key advantages do they hold
0:46
over normal short term rentals? Nice to be with you.
0:51
So how can I describe service departments?
0:54
We offer the flexibility, the convenience, the safety and the
0:59
security of everything you would expect to have in your own home.
1:03
I guess the difference between short term rentals is short term
1:07
rentals are still prone to certain fixed terms, deposits,
1:13
certain inventory checks and the like.
1:15
Whereas service departments are much more akin to having your
1:19
own space in your own world, creating that environment that
1:23
you like to live in, but having all those hotel amenities and
1:28
opportunities all around you. Mainly.
1:31
You've got the best of both worlds, making sure that
1:34
flexibility and security are very key for us, but equally
1:39
something that a corporate traveller and a leisure guest
1:42
alike can really benefit from. How much did the pandemic and
1:48
the rise in kind of digital nomads kind of boost the
1:53
serviced accommodation sector? It's a very valid question.
1:57
Obviously, during the pandemic, a lot of hotels were closed.
2:01
We had hotels in our portfolio as well that were shut down
2:05
completely during that period. And what the service department
2:09
was able to do was give people that space that enabled them to
2:14
feel safe and secure in what was a very uncertain period in time
2:18
and environment, allowing them to work closer to a destination.
2:23
Many were even trapped in cities and countries that they didn't
2:27
intend to stay in. And having that home away from
2:30
home afield, being able to work, having the connectivity and that
2:35
private space that gave them that security was a real, real
2:39
plus. I think it's moved the dynamic,
2:42
the dial, I can even say on the clock fundamentally forward.
2:47
So today, that's become all the norm than it was even during the
2:52
pandemic. That's what people are looking
2:55
for today, that utter flexibility and being able to
2:58
blend both their life, their work and their travel all
3:02
together. And I think service departments
3:04
offer that perfect connection of all three of those.
3:07
Elements, yeah, it's interesting isn't it?
3:09
I speak to a lot of people obviously in the short term
3:11
rentals industry and a few of them are never in a fixed
3:15
location. They might be from the UK, but
3:18
they're, they're always travelling, they're always
3:20
living somewhere else and their jobs allow them to do that.
3:24
I mean, do you just see that trend growing over the next few
3:27
years with young people? Just saying, you know what, I'm
3:29
not going to have a fixed address.
3:30
I'm just going to keep travelling the world and going
3:32
to different places. I, I don't want to say I think
3:36
it's a sad state of affairs. I think it's a very exciting way
3:40
to live and I absolutely do think it will become the, the
3:44
way of the future. I've got 2 sort of nomadic
3:48
children of my own and nothing pleases them more than that
3:52
ability to take their work, take their life, land somewhere and
3:56
continue being able to work but managing to live all those
4:01
wonderful things around them at the same time.
4:03
So absolutely, I definitely think it's it's the future, it's
4:08
the way things are gonna be. Yeah, definitely.
4:10
I mean, I, I'm lucky enough that I can, I can do this job from
4:12
pretty much anywhere. And earlier in the year we spent
4:15
a few months in the Far East. My, my wife is from, is from the
4:18
Philippines. And yeah, that was one of the
4:20
great thrills. Really.
4:20
We're in a place which, you know, it's got a swimming pool,
4:23
it's got the gym and it's got all the facilities that you
4:25
need. And yeah.
4:26
Well, you end up going to the gym a little bit more because
4:28
it's, it's downstairs. Whereas at home, I've got it.
4:31
I've got to get in the car to go somewhere.
4:33
That's absolutely right. OK, real talk now for all you
4:36
hosts out there, you know that moment when your guest messages
4:39
you again with hey, what's the Wi-Fi code?
4:42
Or you're staring at 5 different calendars wondering if you've
4:46
accidentally double booked the cottage.
4:48
Yes, we've all been there. That's why here at Hostplanet,
4:52
we recommend Housefully. It's basically your rentals
4:55
Control Center. It handles bookings across all
4:58
the big platforms, syncs your calendars to ensure there are no
5:02
double bookings, automates guest messages, and even creates these
5:06
really slick digital guidebooks that stop all the repeat
5:09
questions. Honestly, it just makes your
5:12
life easier and keeps your guests happier, helping you
5:15
achieve those all important five star reviews.
5:19
And here is a little bonus. If you're a House Planet
5:21
listener, you can get $500 off on boarding for House Fullies
5:25
property management software and 30% off digital guidebooks for
5:30
life. Just hit the link in the show
5:32
notes and use the codes plan. That's 500 for the PMS and House
5:37
Planet GB for the guidebooks. And if you'd like a proper
5:41
walkthrough, there's also a link to Booker demo with Frank Bosey
5:44
from House Fully. He will show you how it all
5:47
works. Less stress, more bookings
5:50
sorted with hopefully. So with with what you're seeing
5:55
at at Fraser's hospitality then which segments really are
5:59
driving flexible stays? Is it mainly corporate and and
6:04
how is seasonality different from leisure and compared to
6:08
more traditional short term rentals which are relying on a
6:11
summer season and maybe Christmas?
6:14
I guess an important point certainly for for us at Fraser's
6:18
Hospitality, we're very much located in key cities at central
6:22
transport hubs that naturally attracts very strong corporate
6:27
demand and that is our key focus.
6:30
They are definitely the people that travel on projects, on
6:34
events that need to be in different locations throughout
6:38
the year for business and tend to add on, as we've been talking
6:43
today, a little bit of pleasure travel for themselves on the
6:47
back of that. I think that's very different to
6:50
the leisure market, which tends to be more seasonal, tends to
6:53
fit with the holiday patterns of schools.
6:57
So we get a bit of best of both worlds, which means that our
7:00
occupancies are high all year round bringing in the leisure
7:04
component during those summer months where sometimes there's a
7:08
little lag I would say or a slow down of corporate business.
7:13
It's a wonderful balance to have both.
7:15
But definitely the corporate business does run throughout the
7:18
year and it is the segment where we see the most demand for the
7:23
longest stays. When we talk about the non
7:26
negotiables for short term rentals, we always say it's got
7:29
to be amazing Wi-Fi and depending on your location you
7:32
might have to be pet friendly or you might have to have a hot tub
7:35
for example. But what are the non negotiables
7:38
for serviced accommodation? Well, you've named one of them,
7:42
I have to say, and that is connectivity.
7:45
There is no way that anybody today travelling on work doesn't
7:50
need that fast connectivity. I think it's almost even about
7:53
guaranteeing speeds. People really do need that
7:57
within their environment. I think it's also having a space
8:00
that can convert from a very home driven space to something
8:05
they can work in. Having furniture that's super
8:08
flexible that can allow them to sit in a comfy chair and work or
8:13
sit upright at a desk. Think the way people work today
8:16
is very different, having other environmental offerings, if you
8:21
like, around them. So a cafe where there are other
8:24
like minded workers, places where there's a buzz, they can
8:27
pick up a coffee, they can have a little nibble on the go and
8:31
they can continue working. And equally, corner spaces where
8:35
where you can have a conversation like this that's a
8:38
little bit quieter, a little bit more off the beaten track.
8:42
And having those opportunities of different spaces within the
8:46
service department and the environment, not only their own
8:50
apartment but within the building and the complex itself,
8:53
make a huge difference for people when they're travelling
8:56
like that. Absolutely.
8:58
In terms of rates then, so in the short term rentals world, a
9:02
lot of house and property managers out there, they'll
9:04
either have a revenue management team or they'll be using a
9:07
dynamic pricing software like Beyond or Price Labs.
9:11
How do you guys do it in serviced apartments?
9:15
Well, it's similar. Let's say we definitely have
9:19
dynamic pricing and we're changing our prices on an hourly
9:24
basis. Demand fluctuates and comes and
9:27
goes. And so we also have dynamic
9:30
pricing support through AI, through other tools that we use.
9:35
We have a revenue team that is on that constantly.
9:38
But we also have a mix of what I would call longer stay
9:42
corporates that book with us direct that tend to have fixed
9:46
pricing for longer periods of time.
9:48
Those are our stable, direct relationships that we build over
9:53
the years. Then you blend that in with
9:56
leisure travellers who are perhaps slightly sure to stay
10:00
your mid stays of corporate projects and it's a matter of
10:04
blending those together to get the right balance for each and
10:07
every individual property. Obviously some properties are
10:10
more corporate, some tend to be slightly more balanced towards
10:14
the leisure, but it's about bringing those together.
10:17
We also have tiered pricing. Being a business that can
10:23
operate on hotel licence, we can take stays from one night to as
10:28
many nights as we like. So we also have a tiered
10:31
pricing. So if you are staying longer,
10:34
you will inevitably begin to get a percentage discount on your
10:38
length of stay and we tend to do that after 14 days, after 28
10:43
days and beyond 90 days. So you definitely see the
10:47
benefit in pricing if you're staying with us longer.
10:50
But absolutely it's dynamic. There are there are times of the
10:53
year where where really you could charge anything you like
10:57
for those customers that are really long stay with us.
11:01
We are always fair and we are always balanced because we also
11:04
see the opportunity that they are staying with us in a lower
11:07
season. So we try to make sure that that
11:10
blended rate for that longer stay is fair, open and
11:14
transparent. And with it being kind of like
11:17
hotel stroke short term rentals, does that circumnavigate some
11:22
regulation in some cities? I'm thinking London has a 90 day
11:25
short term rental limit. But with you guys, I guess that
11:28
doesn't apply because you're kind of like, well, kind of a
11:30
hotel. We got different properties with
11:34
different different planning rights.
11:36
So we have some properties that are hotel licensed and some that
11:40
are residential. So absolutely right on the hotel
11:43
ones we can circumnavigate that. On those that have a residential
11:48
licence and tend to be much more residential in feel, absolutely
11:54
you have to live by the rules that are set which is the 90 day
11:58
rule. So we we have a blended
12:01
portfolio in London that gears for all of those elements.
12:06
So we've mentioned rates, then what about distribution?
12:08
Obviously people in the short term rentals world, they're
12:11
trying to get direct bookings. They're they're on
12:13
airbnbbooking.com, the other OTAs.
12:16
How do you guys approach it? So we do have those as well.
12:20
So we're not exempt, but most of our business is direct, I would
12:26
say roughly 70%. And that is definitely the
12:29
target that we drive our properties towards is a 70%
12:33
direct business, what is direct business?
12:36
So that could be the GDS, that could be our local corporates
12:39
who have direct agreements with us, that can be people booking
12:44
through our Fraser World loyalty program, people booking on our
12:48
website, calling our reservation centres.
12:51
All of those would be classed as direct and they probably
12:55
represent around 70% of the bookings that we have across the
12:59
portfolio. The other percentage definitely
13:03
made-up of a mix of OTAs. Probably booking is probably one
13:07
of our strongest along with Expedia, but there are others as
13:11
well that reach out to further destinations such as Trip which
13:15
is more Asia focused and Expedia which is more US focused.
13:20
So there is a blend that fills those gaps in between can be
13:24
driven by OTAs, but the majority of our bookings are are direct.
13:29
When we talk about direct bookings on our podcast, we
13:32
often say, you know, basically go where your customers are.
13:35
So in, in terms of you guys, are you kind of reaching out to
13:39
corporate businesses who might need your services?
13:42
Do you have like a business development team who who talk to
13:44
these businesses who who are going to need what, what you're
13:46
offering? Yes, we do.
13:48
We have in each country where we work, we have a core team of
13:53
what we would call direct sales managers.
13:57
They go out, they actually speak to corporates that are local to
14:01
where our operations are. Equally, we have a core number
14:06
of key account managers who work, if I can call it that, if
14:11
they work the world. So they are very much focused in
14:15
destinations where we are not where there is outbound traffic
14:19
to our destinations. They look at the very big
14:23
accounts and they try and seek opportunities for their
14:27
customers or their their corporate workers to stay in our
14:31
properties all over the world. So we're working on corporate
14:35
relationships and special pricing for the very, very big
14:40
accounts to drive business into all of our properties across the
14:44
world. So we've got quite a complex
14:46
team of people who are doing nothing but working those
14:51
relationships and bringing those people to our door.
14:54
You mentioned the loyalty program that you have as well.
14:57
How important is the loyalty program in terms of growing the
15:00
business? I think people enjoy it.
15:04
They they see the benefit. We're not a Marriott, so we're
15:09
not the scale that Marriott can deliver, but it is something
15:13
that our regular customers and people returning to us once
15:17
they've had an experience and we are all about delivering an
15:21
experience, something that's unique and memorable and that
15:25
they can take away. They also get loyalty points and
15:29
that can help them towards their own travel when they want to
15:33
travel on a personal basis. That is something that they can
15:37
grow and put towards and especially when you're a long
15:40
stay customer, those points can add up quite substantially
15:44
rather than your short term transient hotel stay.
15:48
I think it is more and more important.
15:50
I think people do identify that with customers on the outside,
15:55
often make a choice because of it, but I think it is a huge
16:00
added plus which enables us also to recognise those customers
16:05
that are loyal to phrases so that we can deliver something a
16:08
little bit extra to them when they come back.
16:11
I'm sure there'll be hosts and property managers listening to
16:14
this thinking, well I've got an apartment, it's in the city
16:17
centre, it's perfect for corporate travellers and I want
16:20
more midterm stays. So what would be your top tips
16:24
for how they can attract more midterm and corporate bookings?
16:28
I think it's about understanding what the customer wants for that
16:31
period of time. Trying to find that sweet spot
16:35
can be very challenging. I guess we're all after that
16:38
sweet spot somewhere in between. It's about trying to balance the
16:43
amount of service you deliver at the price point that you're
16:47
happy to sell for a longer stay. So it's getting all those
16:51
balances of all those elements right in order to attract
16:55
somebody to you. Making sure the core, the items
16:59
that we've spoken about, the space, the flexibility and the
17:02
connectivity are there, but equally making sure that the
17:06
services you deliver for that period of time really work for
17:10
that customer while they're there.
17:12
I think that's really quite key. Maybe offering them one or two
17:17
nights free and that period of time as well can just clinch the
17:20
deal sometimes. But it's definitely the sweet
17:23
spot we will try to get to. A lot of hosts and property
17:26
managers, when they think of essential tech in the STR space,
17:29
they're thinking of the property management software, possibly
17:32
dynamic pricing tool, maybe a guest experience tool, digital
17:36
guide book. I imagine it's similar for you
17:38
guys. But what what?
17:39
What does the essential tech stack look like for service
17:43
accommodation? Definitely your PMS, there's no
17:47
doubt about it. That contains a lot of
17:49
information for us and it helps guide our marketing, our sales
17:54
and the activities that we drive around the business.
17:57
We are also very much into AI as I'm sure many, many people are
18:04
using it to help us curate experiences for our customers.
18:09
So balancing the tech tools, so allowing our customers to book
18:14
online, allowing them to check in online, allowing all of those
18:18
things, freeing up the time of our teams, our people to drive
18:23
the experience and to drive that Genesee quoi that we all want to
18:28
give to somebody when they're staying with us.
18:31
Those are important elements. I think more and more as AI
18:35
develops and becomes more intelligent, begins to make
18:39
suggestions about things, I think that's when it's going to
18:43
get very exciting. There are so much, so many
18:48
possibilities for AI to be used in the travel world.
18:53
Even talking to it and talking about where you want to go and
18:56
the kind of experience you want to have, it's amazing what it
19:01
can do already. I think it will go forward.
19:04
The tech stack revolves around giving our customers the
19:08
flexibility and the connectivity.
19:10
It enables us to collect data so we can curate those experiences
19:16
better. And it's about freeing up our
19:19
people to spend that time creating the experience rather
19:23
than just relying on technology to do all of the doing and leave
19:29
the experience alone. That really, really is important
19:32
to us, I have to say. So how do you maintain hotel
19:37
grade consistency across cities because you're completely
19:41
global, while keeping a local feel?
19:44
Because especially if you've got people there who are staying
19:47
quite long term, might be like 3 months, six months, nine months,
19:50
I imagine they kind of want a local experience as well.
19:53
They do. They do.
19:54
I think there are core brand standards that we have to
19:57
deliver. It can be about the space, it
19:59
can be about the quality of linen, it can be about the
20:02
amenities, it can be about the overall concept of the building
20:07
and the environment in which you're in.
20:09
Those can be a brand standard that you can probably find
20:12
across the globe to make it that little bit more unique.
20:15
It's about doing little things that bring the community in and
20:19
bring those local experiences to the customer.
20:23
Perhaps I can give a couple of examples.
20:25
In some of our properties where perhaps a breakfast room isn't
20:30
big enough, we take a breakfast bag to the door.
20:33
In London, it might be a croissant or a muffin and a
20:36
juice and something. In China, we bring a little
20:39
Bento box that we hang on the door, which has got noodles.
20:43
It's got something that's very, very local.
20:45
It's a gift from us to you for you to experience.
20:50
It's also about bringing in the community to the properties.
20:54
So we do lots of events and some of our properties.
20:57
It's all about things that are done locally, bringing in local
21:01
Craftsman, artists, speakers that actually bring that local
21:06
experience into the service department so that people that
21:10
are staying, be it that they're from here or from somewhere
21:13
else, get to experience that local touch.
21:17
We also work with local partners.
21:19
We also bring in local, local goods and supplies and we also
21:24
offer those to our customers during their stay.
21:27
All of those little elements bring that touch of where they
21:31
are and we try to surround them with that.
21:34
Because I think again, talking about what people want today, it
21:38
is that local experience. It's feeling part of the local
21:42
community that a lot of people want.
21:45
We also work with a lot of charities and foundations within
21:49
the different properties that we have.
21:51
For example, in Scotland and Glasgow we work with the local
21:55
Autistic Society. A lot of our customers have
21:58
taken part in the activities that we do to raise money for
22:02
that local local group and it is very local and they take away
22:07
that memory and that souvenir and really feel that that's part
22:10
of the take away that's utterly unique that they wouldn't have
22:13
had in a hotel or or another environment.
22:16
So I think those are the things that can make it very local
22:20
while you know that that brand standard that you're looking for
22:24
is is there each time. Superb.
22:28
OK. Then Rebecca, we've got a few
22:29
questions to finish that we asked to pretty much everybody
22:33
on this weekly show. So your favorite brand in the
22:36
short term rental industry and why?
22:40
How could I not say Fraser Sweets?
22:44
I think it's a very special brand because I think it's it's
22:47
quite unique. It's all about quiet luxury.
22:52
I'm a little bit older maybe today than your average
22:55
traveller and I think that opportunity to have something
22:59
that is quiet luxury but still brings in those local
23:03
experiences and unique offerings, bringing a building
23:08
alive that is historical and feeling part of that for me is
23:14
really special. I travel an awful lot and I have
23:18
to say that there is nothing nicer than having a moment of
23:21
peace and people taking care of me.
23:24
So I would say Fraser Sweets as a brand and I guess you're going
23:28
to ask me what property. So I would say Hamburg from our
23:34
collection is a property that I would highly recommend for its
23:38
uniqueness. It's where we've been able to
23:40
take a really historical old tax office and we will think tax is
23:46
pretty cold and boring and we've brought it alive with some
23:49
really unique art Deco features. We've brought in Wellness.
23:54
I think that's really important today.
23:56
And properties, people are looking for that bit of escapism
24:00
and downtime. So we have some Wellness, we
24:03
have some thin beverage, we've got the apartments and we have a
24:07
space that really makes you feel like you've come home.
24:10
I think those those elements really matter to me.
24:13
Very good. An individual in the STR space
24:17
that you'd like to give a shout out to and why?
24:22
Possibly Kayak. I think they're quite smart.
24:25
I think they're quite trendy. I think they're very ripe for
24:29
the young, young people today. I think that's really quite a
24:33
clever brand and I think they're in places that aren't maybe
24:37
quite so high end. I think that's an opportunity
24:40
for younger people to experience that kind of lifestyle and
24:44
environment. So I would give them a shout out
24:46
too A. Shout out for Kayak.
24:48
Finally then, biggest learning from the serviced apartment
24:52
space which STR hosts can apply today.
24:57
Gosh, biggest learning. I think it's all about trying,
25:03
dare I say it, trying to drive the returns per square metre.
25:09
I also think is quite important. So in the service department
25:13
world and I think the the short term rental, you tend to have a
25:18
lot more space. I think space is a key element
25:20
of what we do. So it's also about trying to
25:23
manage for owners, for developers, how to drive returns
25:28
in that space. Hotel rooms are very cookie
25:32
cutter, they're much smaller. So it's about trying to
25:35
understand how to use that space effectively, carve out what
25:40
people need as, as as an environment, as a home and
25:45
actually making it work financially.
25:49
It really, it really is a key driver of what we do.
25:54
And I think that is a learning that is quite important.
25:57
It's wonderful to have space. It's important to make that
26:00
space work really cleverly and really make sure that you fit in
26:06
flexibility and even the furniture and what it can do and
26:09
maybe it can transform a bed in a wall.
26:12
I think those elements are really important within the
26:15
short term rental industry so that you can actually drive the
26:20
bottom line and the profitability and the yield
26:22
returns for owners. So I would say that's that's
26:26
quite important to get your space planning right.
26:29
Utilize the space. I love it.
26:30
Great tip, Rebecca, it's been a real pleasure.
26:33
Thank you for joining us on the Host Planet podcast.
26:36
Thank you. Great to chat to Rebecca
26:37
Holland's fan lock there from Fraser's Hospitality.
26:40
I hope you found that episode useful.
26:43
That's just about it for today's show.
26:44
Remember, this podcast is brought to you in collaboration
26:47
with House Fully, which is trusted by short term rental
26:50
professionals across the globe. As a House Planet listener, you
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get 2 exclusive offers, $500 off onboarding for House For these
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property management software, just use the code planet 530% of
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digital guidebooks for life. Use the code houseplanet GB.
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To grab these deals, click the link in the show notes or head
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to housefully.com. For more free education tips and
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trends from the STR industry, visit houseplanet dot club where
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you can sign up for our newsletter, listen to our
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podcasts, and download a suite of ebooks for hosts and property
27:23
managers. That's it for today's episode.
27:25
Until next time, happy hosting.