Property

Hong Kong Serviced Apartments - A Change in Attitude



It wasn’t too long ago that accommodation for a month or more came in limited types. You could sublet, or find one of a handful of serviced apartments (then often called “aparthotels”) to check into. If you wanted a hotel you paid a given hotel’s nightly rate. But the long-stay landscape has shifted radically in the years since the aparthotel, and traditional hotel operators are actively looking for ways to stay relevant. Long stays could be part of the answer. 

A Change in Attitude

How serviced apartments have edged their way into the standard travel market has been well documented. The flexibility, locations and facilities of serviced suites make them a nearly ideal option for medium to long trips for families and groups of friends.

Add to that the changing patterns of travellers – chiefly Millennials – whose differing demands have given rise to new brands by traditional hotel operators such as Jen by Shangri-La, noted for limited services, high connect-ability and “neighbourhood” locations. Hotel Jen Hong Kong is in Shek Tong Tsui.

Then there’s Airbnb. The web-based person-to-person accommodation finder is the latest travel rage (even with negative press about robberies, assaults and racial profiling) and it is eating into the hotel’s customer base.

Airbnb’s future is looking murky right now – New York State has just banned the kind of short-term rentals it trades in, and San Francisco is facing a lawsuit by the company fighting a city ordinance demanding hosts pay a US$50 registration fee in person. Non-compliance could cost Airbnb $1,000 per day per listing. Airbnb is also facing stiff regulations in popular locations such as Amsterdam, Barcelona and Paris.

Serviced apartments are also facing market challenges, like Airbnb, however, Gateway Apartments general manager Ronald Loges notes that: “Yes, there’s a lot of convergence with hotels [for serviced apartments], but I think it’s the other way around. I think hotels are more threatened by serviced apartments playing in the short-stay market.”



Regardless of which trend came first and for what reasons, more and more hotels are offering long-stay options such as J Plus, the Regal Riverside, the Hyatt Regency in Sha Tin and iclub, just to name a few in Hong Kong.

Serviced apartment operator Ovolo Group has been moving away from serviced suites for several years.
“We operate one serviced apartment now officially in the SAR. But that being said, we do have long-stay services available at a few of our properties, such as Ovolo Southside,” says Amadou Doumbia, public relations and communications manager for Ovolo Group.

“The reason why we switched to hotels from serviced apartments was mainly because of market demand. Around 2010/2011, demand was rapidly increasing for hotel room nights in Hong Kong, yet supply was still low.

“Furthermore, more and more developers and companies were trying to acquire hotel licences, which the government had begun putting a cap on around the same time.”

Already in possession of a hotel licence, Ovolo was in a position to transition to hotelier.


Business and Pleasure

Operating procedures aside, one of the advantages of offering a long-stay option for guests is the guaranteed revenue stream it offers the hotel.

Doumbia argues Ovolo made the change due to a “growing demand in the market from entrepreneurs and other business professionals who’ve come to build businesses for a select period of time in the SAR.”

Other markets include local Hongkongers in the midst of renovating, according to Ovolo Southside’s assistant director of sales Elaine Lam.

Of Ovolo Southside’s 162 rooms, Lam tries to keep the larger, 320-square foot corner units, of which there are 36, available for guests (and corporate clients and VIPs) who may be dropping in for extended stays.

Located in a former industrial building in Wong Chuk Hang, Southside’s industrial chic and exposed ductwork won’t appeal to travellers with a taste for old-school brocade and lush curtains, but it does appeal to those aforementioned Millennials, for its funky interiors and location in an up-and-coming equally funky neighbourhood.

The lounge is set up to resemble a co-working space rather than a business centre, which the Cirqle dining room feels like an extension of. Its proximity to perennial favourite Ocean Park and imminent connection via the MTR appeals to families and general vacationers.

Funky helps, and so does a flood of new office supply. Lam fully expects Ovolo Southside will take advantage of Wong Chuk Hang’s burgeoning office sub-market status, as do properties such as J Plus in Causeway Bay, the Harbour Plaza North Point, and the raft of forthcoming boutique hotels in Kowloon East, each in districts with growing office sectors as MNCs decentralise to save costs.

But despite enjoying an “effortless stay” measured in weeks and months, Ovolo Southside and its ilk lack some of the homey creature comforts serviced apartments offer – such as a kitchen.

Doumbia argues that by offering rates that are more affordable than many traditional serviced suite providers, and when amenities such as the 24-hour gym, Wi-Fi and self-service laundry are factored in, a long-stay is competitive. Lam points out Southside’s monthly rentals can be tailored to match budgets and include the regular perks or not.

“In the absence of a kitchen in each unit, we give long-stay guests a 20% off incentive at the hotel’s F&B outlets … and every guest is given a full directory of nearby restaurants to visit at their leisure,” Doumbia says.

“From our experience with recent long-term guests, these options more than meet expectations, as a lot of them find it more favourable to enjoy the multitude of dining options Hong Kong offers rather than cook themselves.”