Business travellers switch to serviced apartments

A serviced apartment is a type of furnished, self-contained apartment designed for short-term stays.

Serviced apartments usually come equipped with amenities that can be found in a regular home, such as a refrigerator, microwave, cutlery, washer/dryer, TV, and internet access. In addition, many offer a dining area and a dedicated work space.

Prices for serviced apartments are typically lower than equivalent hotels rooms, especially when the stay is prolonged.

Some serviced apartments are located in a hotel and share the facilities. In other cases, they are branded as part of a larger serviced apartment network, such as the Marriott Executive Apartments.

There are also a number of independent serviced apartment providers.

UAE hotel room shortfall

Serviced apartments are gaining popularity among business travellers in the UAE, partly because hotel rooms are in such short supply, according to John Podaras, Operations Manager at TRI Hospitality Consulting.

'About four years ago, Marriott Executive Apartments were the only game in town for serviced apartments,' he says. They mainly targeted longer-term guests who were going to be in Dubai for a year or longer and did not want to spend their time in a hotel.

Now serviced apartments are increasingly hosting guests who are staying for shorter periods because they are unable to find rooms elsewhere. 'Shortage of available rooms in Dubai is creating a situation where business travellers have to take whatever they can get,' he notes.

The room shortage is also boosting prices for serviced apartments. 'In Abu Dhabi, the average corporate monthly rate for a serviced apartment at a branded hotel is $8,170 a month. Of course, in a hotel you would pay one-and-a-half times that price,' Podaras said.

Financial benefits

Another key reason why serviced flats are gaining popularity is that they offer the relaxed feel of an apartment, according to Kirk Kinsell President, Europe, Middle East & Africa for InterContinental Hotels Group. 'Some people are over-stimulated by the larger hotels in Dubai. It can be exhausting in this environment,' he noted.

Serviced apartments also provide good value, as guests are essentially getting a suite for the price of a hotel room. Besides the benefit of paying a lower room rate, customers can also save money by preparing their own meals. 'Going out to eat for every meal in a place like Dubai is very costly,' he explained.

Serviced apartments also offer a lower cost structure for the hotel, as they don't have to bear the costs of running an in-house restaurant, room service personnel, and daily housekeeping services. That helps them pass on lower costs to their guests.

Dubai apartment numbers grow

As of October 2007, 125 serviced apartment blocks were registered with Dubai's Department of Tourism and Commerce Marketing, representing 10,202 hotel apartments, according to a recent report by TRI. The number of serviced apartment guests in Dubai rose by 11% in 2007 and stays averaged 4.29 nights.

A number of new hotels coming into the market over the next three years in Dubai will contain hotel apartments. Of the 49 confirmed additional hotel apartments in the next three years, 24 are attached to future hotels with a total of 4,373 apartments. The 26 future independent hotel apartments offer a total of 7,862 units.

Emirates capitalises on long term stays

The most recent addition to the serviced apartment market in Dubai is Green Lakes from Emirates Hotels & Resorts, the hospitality division of Emirates Airline. Located in the Jumeirah Lakes Towers precinct, Green Lakes offers 141 one-bedroom, 29 two-bedroom, and 11 three-bedroom apartments, each of which have fully-fitted kitchens and dining areas.

Every apartment also has flat screen LCD satellite TVs, DVD/CD players, ipod docking stations and broadband Internet. The services includes daily housekeeping, full reception, concierge, guest relations, security, maintenance of the apartment and valet parking services.

Tony Williams, Vice President of Resorts & Projects at Emirates Hotels & Resorts, said business travellers staying in Dubai, many of whom require accommodation for up to three or four months at a time, are increasingly choosing serviced apartments rather than a standard hotel room as a base.

'Equally we see a strong demand for even longer-term stays, where the convenience of serviced apartments means that residents have none of the individual hassles associated with having to sort, register and take care of monthly utility bills, maid and maintenance services, and the numerous other domestic chores associated with renting,' he noted.

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