Home and Away
The Ovolo Group sets its sights on transforming the serviced apartment
| Text : Elizabeth Kerr | Photo : www.ovolo.hk / www.thinkstockphotos.com |
Though they exist in other parts of the world, the serviced apartment holds a special place in Asia and in Hong Kong. Fraser Suites, Hanlun Habitats and Sun Hung Kai Properties are a handful among the major players in the SAR. Included in that group is the expanding Ovolo.
Founded in 2002, Ovolo is a subsidiary of Hind Hotels + Properties Limited, their first property being their flagship on Arbuthnot Road. That location may seem like a no-brainer now, but just a few years ago, it was a risky move. “I like up-and-coming areas. They’re more fun. When we picked up [Arbuthnot] people said, ‘Arbuthnot? Nobody’s heard of it.’ But now it’s a bustling area. Things change,” says Girish Jhunjhnuwala, managing director of Ovolo. “On Hollywood Road where Kush was it was a very quiet area [of Sheung Wan]. I think it will continue to evolve. It’s a matter of time.”
Ovolo recently purchased that very Kush building in Sheung Wan, increasing its portfolio to a total of five buildings on Arbuthnot, Queen’s Road, and in Aberdeen (one of a scant few residences of any kind on or around Shek Pai Wan Road), Sai Ying Pun and the old Kush. Ovolo is embarking on an expansion that may one day include Singapore, Mainland China and beyond and new builds as opposed to straight-ahead acquisitions. But Ovolo puts a great deal of emphasis on space and layout, and as such it is the 100 percent owner and operator of all its properties. “We’re very picky about which landlords we work with,” explains Jhunjhnuwala. “We don’t want anything affecting our brand, so we do it ourselves.” It also makes immediate expansion into China a bit tricky, given the Mainland’s co-owner or co-investor requirements.
Cities like Hong Kong are hotbeds for serviced homes because of the nature of its core economic drivers (global financial services and property) and the resulting stable influx of overseas staff. “The advantage of a serviced apartment is that they’re not hotel room-sized. In Hong Kong there are two types: the ones we think of when we think ‘serviced apartment’. There’s a kitchen; there’s space. But in Hong Kong, because serviced apartment is a buzzword everybody can take what’s a hotel room and call it serviced apartment and charge monthly rates. So this is the difference. All our apartments are apartments.” There’s also a degree of privacy that doesn’t come with 300-room hotels and their complementing residences. No one is opening up your door without your knowledge at a serviced apartment and Ovolo’s stock totals fewer than 200 units.
While the serviced apartment market may be crowded and increasingly competitive, flat providers have more to worry about than each other. Hotel residences are on the rise, and one seems to spring up every few months. Major operators like Four Seasons, W, Mandarin Oriental and Ritz-Carlton have all been making suites available for purchase — effectively creating a serviced apartment. What’s the difference — if there’s a difference at all? “It’s actually getting very difficult [to differentiate between them]. There’s a blurring of the line between the two. In terms of service, we offer every service that a hotel does. I think one of the main differences that a hotel does offer is room service. Besides that there isn’t much difference any more,” Jhunjhnuwala theorises. The most important difference is the one you can’t see — the philosophical one.
Jhunjhnuwala and Ovolo stress the apartment side of serviced apartments, and much of that philosophy stems from aggressively trying to create “homes” and not more hotels. Aside from more appealing sizes and price points, Ovolo units have, “a home feel, not a temporary feel … I feel in the hotel segment things are going to start changing. You want to make your guests feel welcome. It’s about how you live,” Jhunjhnuwala argues, referring to Ovolo’s insistence that their properties not become unfeeling and removed from its tenants.
A shift in consumer attitudes is partly to credit — or blame depending on your point of view — for the rise in popularity of the boutique hotel, serviced flat, or boutique in general. Jhunjhnuwala believes there’s a concerted effort out there moving away from big box stores and identical chains. Ask him if he thinks consumers are fed up with faceless multi-nationals he replies, “I think so. I personally see it myself. I enjoy the smaller places than a typical Hyatt or Hilton or Sheraton. They all look the same; you’re just waking up in a different city.” The big hotels are perfect for business, where guests are in and out to work. But long-term stays and relocations are another story. Getting away from CBDs is also vital to living, and it’s where the boutiques step in and fill the gap. “Hong Kong is ripe for this kind of thing,” he says, referring to a lack of newcomers and transfers that venture outside the few square blocks that make up Central, Lan Kwai Fong and SoHo. “But the problem is that the hotels outside the downtown [core] are not well run. Name one?” Jhunjhnuwala prods. “It just doesn’t exist. There’s space for this kind of thing to happen.”
Jhunjhnuwala is indeed looking beyond Hong Kong’s borders for future moves. “Singapore offers a lot of opportunities. Bangkok looks good. China and India look good but there’s a problem with oversupply,” he says. Once again a demand for novelty, individuality, character or all three drives Ovolo’s potential moves. However, “They’ve all built these humungous buildings, with 300 apartments and it’s just become like another hotel. There’s still space for niche, boutique properties.”
For the immediate future Jhunjhnuwala, a Hong Kong native, is focusing on finding the hidden gems. “We are actually looking at getting into the hotel business. We’ve got two properties — our serviced offices on Hollywood Road — and a property in Wong Chuk Hang. We’ve applied for license for 120 hotel rooms there,” he describes. That hotel will be located near Ocean Park, in the same general neighbourhood as Chinachem L’hotel South and a number of other more mysterious developments in old factory district. As Jhunjhnuwala enthuses, “I love Aberdeen. The Aberdeen and Wong Chuk Hang area. That area is waiting to happen.” Ovolo may not be the only serviced flat player on the island’s south side in a few years, but it will always be the first.
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