Just read an article, which talked of rising hotel prices and how the trend is likely to continue next year. As per a report by STR Global, the Asia pacific region and Hong Kong in general witnessed a tremendous rise in hotel rates and the same is likely to continue next year. While the revPAR for Hong Kong went up 6.9% to US$103 those of Americas (US$58) and Europe (US$86) were far less. Even global corporate hotel rates are said to have increased by 4% with the Asia pacific witnessing a 7% high. City wise Singapore (10 %), Bangalore (22 %) and Mumbai (4 %) were the most expensive. The situation isn’t likely to change next year. Average daily hotel rates would grow as much as 5% in the Asia Pacific, with 4% to 7% in the northeastern United States as per a CWT report. Some of the reasons ascribed for this rise are an increase in tourism flow (Thailand); introduction of new star rating system and VAT (France); the 2012 Summer Olympics in London, which has seen a 10 fold rise in Hotel prices.
Given such a scenario, it appears that renting a serviced apartment seems to be a far better choice. Available at rates, which are almost half of what a hotel charges, these serviced apartments also afford lots of privacy, freedom and the ability to entertain friends- something that is entirely missing in a hotel. Also, the fact that these apartments are more spacious and come completely furnished and well appointed with the latest amenities and furnishings add a further icing on the cake. No wonder, that these service apartments are increasingly being preferred by many a corporate houses and business travellers as their mode of accommodation. So much so that even established hotel chains such as Hotel Leela Venture, Grand Hyatt and Marriott International have started several serviced apartments. As per the recent Global Serviced Apartments Industry Report 2011-12, there were 446,996 extended Stay/Apart-Hotel apartment units in 7,119 locations in 2010, which increased to 599,187 units in 8,362 locations in 2011. Similarly, corporate housing identified in the US and Canada has risen from 44,469 units in 2010 to 70,557 units in 2011 – an increase of 58% year on year.
This shows that the serviced apartment market is all set to expand and given the increasing awareness among the business houses about its benefits, as also among the common people it’s just a matter of time before they pose a sizeable threat to the hotel industry. However, there are still a few areas, which need to take care of- standardisation of service levels in multiple locations, apartment maintenance, lack of apartment product knowledge amongst TMCs and leisure travel agents is mirrored by confusion amongst operators regarding different agency business models and especially varying commission levels are some of the few areas that needs to be looked after before they can unfold their magic.
Nonetheless, apartment owners are optimistic that people will continue to rent out the apartments and this news about rising hotel prices is just the boost that was required. So, if you are planning to book a hotel for your coming vacation or business trip… Think again!
