Hotels vs Serviced Apartments – what’s best for the business traveller?

Serviced apartments are now a serious alternative to traditional hotels for companies looking to reduce their travel costs without compromising travelling employees’ safety and well-being. But are apartments really a better bet for business travel?

For the uninitiated, serviced apartments are either Extended Stay (also called Aparthotels) or Corporate Housing products, the latter found mainly in the US. Aparthotels are studio or one bedroom apartments ranging from budget to deluxe standard, fully furnished with en-suite bathrooms, fitted kitchen or kitchenette, lounge/dining area, working area, internet access & direct telephone line.

Unlike hotels however the range of guest services is not consistent from one apartment operator to another. Manned reception desks are not always provided and there are typically no restaurants, bar or lounge areas.

The debate over whether hotels or serviced apartments are better for corporates is as fruitless as deciding between the merits of a saloon or estate car. It’s about choice and which accommodation best meets the need of the company, and the traveller –usually quantified in terms of location, price and booking channel.

As a growing sector, although there are serviced apartments in every major business hub, they are easily outnumbered by hotels, so availability is often limited. The corporate usually has a wider choice of hotels in a city and will want to minimise travel times and ancillary costs by ensuring that travellers stay in hotels close to company offices.

Availability is an even bigger issue for corporates that use Travel Management Companies (TMCs). Inntel’s systems provide our clients with access to over 600,000 serviced apartments worldwide, but most TMCs rely on the Global Distribution System (GDS) which lists only 40% of the serviced apartments available worldwide. Apartment operators tend to prefer marketing their products direct to the corporate market (thereby compromising traveller tracking and Management Information gathering) or via specialist third party agents.

Brand recognition is also in the hotelier’s favour. Names such as Hilton, Novotel, Marriott and the like are globally-recognised. Brand recognition reassures the traveller about the likely standard and consistency of the hotel’s facilities and guest experience. Unlike the hotel sector, there is no serviced apartment equivalent of the star grading system, and although the apartments industry is working hard to achieve greater consistency in terms of product, there are no international and few national standards yet.

At the end of the day it’s all about price. There’s no question that serviced apartments offer a cheaper alternative to hotels for stays of a week or more, when the savings can increase to £20 – 25 a night. But for short term stays the price benefit almost disappears.

The serviced apartment sector still has a lot to do to educate travellers about their product and its benefits. We estimate it could be two or three years before travellers’ understanding is strong enough for apartments to take substantial market share away from traditional hotels.

Although the age of the serviced apartment has already here, the number of hotels, their accessibility and cost effectiveness for short stays is such that the two accommodation types really service different markets. When that changes remains to be seen.

For help and advice on whether to choose serviced apartments over hotels, contact our bookings team.