Extending a Welcome
In the aftermath of the Great Downturn of 2009, the life of the long-term corporate gypsy has rebounded – but has taken on a different cast. What has changed in the post-recession environment, experts say, is an increased use of consultants for longer-term corporate projects; a return to relocating key, usually executive-level employees as companies expand; and projects or training that requires employees to spend weeks or months away from home but without actually relocating to a new city.
Of late, there’s been a significant increase in the number of extended stay guests, according to Bill Duncan, global head, brand management at Home2 Suites by Hilton and Homewood Suites by Hilton. Duncan says extended stay has become much more a strategic priority for companies and organizations because so many of corporate teams and individuals are on the road for greater periods of time.
“People could be on the road auditing, for new product launches or a variety of different ‘tripcations’ with some very important outcomes that are needed,” Duncan notes.
The technology and medical sectors in particular are seeing significant expansion of extended-stay corporate assignments, notes Robert Radomski, vice president, brand management, extended stay brands at InterContinental Hotels Group.
“We are finding more companies moving away from web-based training they previously hosted based on efficiency and cost in favor of in-person training events, which result in more corporate extended stay bookings,” he says.
Staying the Same
Despite the upturn in the market and the changing demographics, many fundamentals of corporate apartments and the extended-stay hotel market have not changed much post-recession. According to The Highland Group, a trade consultancy, 30 days remains the typical minimum stay required to get the lower costs and greater amenities of a corporate apartment. The average stay in the shorter-term extended-stay hotels is about two weeks, but many guests choose to check in for a month or more and others for just a night or two.
The largest segment of the corporate housing market continues to be companies relocating employees, followed by housing interns, and consulting or training assignments.
The occupancy rates in 2012 for US corporate apartments was 88.6 percent, a level that traditionally has remained relatively flat, helped in part by building and complex owners balancing their inventory of units between those available for short- and long-term leases. Upward pressure on rates and occupancy has also come from the lingering effects of the housing depression, which has filled more apartments with renters who used to be homeowners or with those not ready to move into home ownership.
In the extended-stay hotel market, occupancy in 2012 was just less than 75 percent, compared with an average for all hotels of 61 percent, according to statistics from Smith Travel Research. Economy-priced extended-stay hotels led the field, with a 79 percent occupancy rate; mid-priced lodgings came in 71 percent and upscale extended-stays at 77 percent.
Companies are looking for more options, greater flexibility and increased value around business travel. Thus they are expanding their options by looking at extended stay alternatives, explains David Holt, director of sales for Oakwood, a global provider of corporate housing.
“Over the past couple of years we’ve seen more and more companies expanding outside the borders of their home country,” Holt says. “Globalization is driving a demand for extended stays in established and emerging markets. Recruiting, retaining, and developing talent in a truly competitive environment means corporations need an edge – especially for global assignees. We are hearing our clients use the phrase ‘over caring’ when referring to their employees on extended assignments. This rings true for the Millennial generation who expect an overall stellar assignment experience.”
Oakwood is one of many corporate housing providers who have expanded their footprint in the extended stay/serviced apartment domain. Oakwood’s 2012 purchase of Marriott’s ExecuStay corporate and temporary housing division gave them furnished apartments in 700 locations across the US. This in addition to its inventory of housing solutions around the world.
Serviced apartments designed for long-term temporary stays is a global market in which Singapore-based Frasers Hospitality has carved out its own space. Frasers currently has 77 properties either open or in the pipeline, falling under one of five brands across a range of design and service options: Fraser Suites, Fraser Place, Fraser Residence, Modena and Capri by Fraser. Frasers is found in far-reaching locales from Beijing and Kuala Lumpur to London, Glasgow and Paris – and of course, in the company’s hometown of Singapore.
Another real estate and housing developer, Korman Communities, has three distinct offerings in the extended stay space; AKA is a brand of high-rise luxury furnished serviced residences in urban settings; these include four New York City properties, two in Washington, DC, and one each in London, Los Angeles and Philadelphia. Korman’s AVE communities offer fully furnished and unfurnished, one-, two-, and three-bedroom suites in mid-rise suburban settings in New Jersey, Pennsylvania and Virginia. ARK residences are garden style furnished and unfurnished residences in suburban locations such as Bucks County and Montgomery County in Pennsylvania.
The mark that seems to differentiate one extended stay offering from another is the variability of the word “extended.” While some properties bill themselves as ‘corporate apartments’ or ‘serviced apartments,’ others maintain the ‘extended stay’ moniker. And, in addition to differences in the lengths of stay, there are significant distinctions in service levels, amenities, design and décor and location.
But all these other factors aside, one common thread among all the different flavors of extended-stay properties is the goal to give guests a home away from home to help them keep their routines rolling on the road.
For example, says Chris Walker, Hyatt’s vice president of brands, “this includes everything from residentially-inspired suites with full kitchens, laundry facilities, real social spaces, 24-hour workout rooms, complimentary WiFi and more that make it easier to maintain momentum and feel at home.” Walker points to Hyatt House’s Hyatt Has It-Borrows program that offers “many forgotten items or things guests wouldn’t pack, and it includes items with families in mind such as board games, pool noodles and night lights.”
“IHG offers two extended stay brands designed specifically for travelers who spend weeks and months away from home,” says Radomski.
The Staybridge Suites brand provides a community experience and gives guests an environment where they have opportunities to socialize with other guests and hotel team members. Meanwhile, the Candlewood Suites brand offers a home-like atmosphere at a value price.
“Both brands offer more space than a typical hotel room, along with fully equipped in-suite kitchens and services – including housekeeping – and amenities for travelers,” Rodomski explains. “Unlike many short-term apartments, the brands require no minimum stay or lease deposits for utilities.”
BridgeStreet has taken the concept of brand identification a step further. Citing a need to bring consumers a clearer understanding of the offerings across the entire extended stay sector, the international provider of serviced apartments in January rebranded itself as BridgeStreet Global Hospitality. The launch introduces six distinct serviced apartment brands ranging from six- to two-star products, all under the BridgeStreet signature umbrella.
“The needs of the discerning traveler about experiences and quality have evolved incredibly over the last couple of years,” according to Sean Worker, BridgeStreet’s CEO. Relocated travelers are looking for a “home,” he says. “We are about enhancing the experience.”
At the other end of the branding spectrum, Extended Stay America has consolidated their brand image. “We used to have a portfolio of four different brands, but we consciously consolidated our brands last year as we realized from talking with our loyal customers that some of the things we thought were different really weren’t that different,” says Extended Stay’s CMO Tom Seddon.
However, Seddon notes, consolidating brands is not any indication of a slowdown for the extended stay market. He says half of Extended Stay America’s guests stay a month or longer and the growth of the extended stay market continues each year.
More Than a Bed
Shifting corporate dynamics are only part of what’s driving the changes in long-term lodging. The guests themselves – the business people who wind up living for weeks or months away from home – are are also creating a new climate, and a new set of demands for extended stay hotel operators and corporate apartment providers alike.
In particular, younger travelers who are away on longer assignments are looking for a different experience from their digs. Yon Abad, a director for the Americas in Carlson Wagonlit Travel’s Solutions Group, says these travelers prefer accommodations that include common areas like a clubhouse for socializing with fellow lodgers. They also want fitness and other recreational facilities on the premises or nearby, proximity to urban amenities such as good restaurants and retail stores, and WiFi and basic cable TV service included in the rent.
Extended-stay hotels typically offer those features, making sure they’re situated where services are available. Recently, corporate apartments have included the same amenities as a way to attract both month-to-month and long-term tenants, Abad says.
In New York City, for example, The William, a newly-renovated Midtown property, has a different take on the extended stay story. Here guests are immersed in the lifestyle and culture of the city around them. So they offer “cultural curators” who provide arriving guests a welcome passport that points toward specific restaurants, cafes, shopping, and must-see sights tailored to each guest’s personal preferences, so they can live, work and play “like a local.”
Housed in two historic brownstones and managed by Las Vegas-based Warner Hospitality, The William is a fresh, modern, and technologically advanced take on the extended stay hotel.
“People now pay more attention to design,” according to Hilton’s Duncan. As a result, Hilton’s Homewood Suites properties have focused on upscale home environment trends for its extended stay properties. These suites include such HGTV-familiar amenities as granite countertops, stainless steel appliances and hardwood floors.
In response to its own research which reveals that people like being around others when they are on the road, Homewood has moved into offering more communal spaces with seating in public areas. In another move designed to minimize the conventional constraints of hotel life, Homewood allows guests to pick the suite number they want and is experimenting with letting them bypass the front desk altogether and go straight to the room.
Hyatt House offers a number of amenities and services that help guests feel at home and keep their routines normal, including a complimentary Morning Spread breakfast, which features a build-your-own omelet bar, a 24-hour workout room, guest market and laundry facilities. Additionally, there’s a complimentary evening social with savory bites, beer and wine.
Extended Stay America recently began offering free breakfast, understanding that sometimes you just want to grab a cup of coffee and a bagel on the run.
Candlewood Suites features a Gazebo Grill and a 24-hour Candlewood Cupboard, where guests can purchase a variety of beverages, breakfast items, snacks, frozen entrées and sundries on the honor system.
Three nights a week Staybridge offers the complimentary social evening reception. Both Staybridge and Candlewood brands also offer guests convenient 24-hour complimentary laundries.
Today, free WiFi is almost as commonplace as a bed, but some brands are expanding high-speed Internet offerings so a traveler can utilize all of his or her devices at top connectivity speeds.
“We see technology as being the big driver in the extended stay segment,” Duncan says. “The first couple of nights, an extended stay guest behaves similar to a typical transient guest. As they stay longer, their habits and the way they use the hotel changes. They become very self-sufficient. Technology that can continue to help customers be self-sufficient is incredibly important.”
Oakwood’s typical corporate apartment comes equipped with quality, contemporary furniture, water, gas and electricity all turned on at arrival, high-speed Internet connection, cable, telephone set up and ready to go, in-unit or on-site laundry facilities and a welcome amenities kit containing all the essentials one needs for the first couple of days, including useful neighborhood information.
“These conveniences provide a better stay experience for the assignee who seeks a more home-like environment,” Holt says. “Companies are also looking for corporate housing providers who can extend their corporate culture into the housing experience with special amenities, technologies, furniture, appliances and the like,” he adds.
A Family Affair
Extended stay travelers often have their families join for weekends or weeks at a time depending on length of stay, which is why multi-room suites are growing in popularity and why fully equipped kitchens have become the norm.
James Berkeley, managing director of Ellice Consulting Ltd., a hospitality industry consultancy, observes that the smaller and more nimble operators have a clearer understanding of how to effectively choreograph the whole family lifestyle experience. For example, he says, providing hotlines for advice on children’s play activities, offering soft play areas within the building space, and including educational and special interest activities are all things that make it easier for extended stay guests with children.
Families are discovering the benefits of more room and amenities found in extended stay properties, while brands that offer longer-term housing are developing new ways to encourage guests to take those extra days with their families.
“The suite-style rooms provide plenty of space to stretch out,” Walker says. “Full kitchens offer the opportunity to both save money during your travels and also cater meals to your children’s preferences or allergies.”
Travelers who stay 30-plus consecutive nights at Hyatt House receive the benefits of its Very Important Resident program. “In an effort to make the transition from home to hotel even easier, VIRs enjoy unique benefits,” Walker says. “Including complimentary food and laundry credits and the option to arrive with a refrigerator fully stocked with groceries of their choice.”
Hilton brands also offer extended stay guests the option of scoring points in their Hilton HHonors program. Duncan notes that many travelers are redeeming points to get their families in for a free weekend. “We try to create the culture of a second home and share with them a little part of the experience and it helps the families and makes them feel more comfortable when their loved ones are away for a period of time,” he says.
“Staybridge Suites hotels feature either a pool or sport court, popular with many families,” Radomski says. “Candlewood Suites recently introduced the Lending Locker, which is a place within the hotel where guests can borrow larger items they might typically use at home, including games, sports equipment, larger kitchen items such as blenders or crock pots and more,” explains Radomsk.
Both IHG brands are pet-friendly because guests often say that pets are part of the family, too.
It’s hard enough to spend an extended period of time away from home, missing family, friends and personal activities. So above all else, long-term hospitality brands are committed to offering what is most important to extended stay guests: high-quality and personalized guest service to make them feel relaxed and at home.
By Keith Loria
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