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Owner-operators vs. leased operators: a look into ownership models of the serviced apartment sector

26th May 2015

Susan Cully, columnist and Managing Director at Marlin Apartments discusses about why public groups – especially families – perceive serviced apartments as an expensive accommodation option.

There has been much talk in the media over the past year of the rapid rise in popularity of serviced apartments. Many companies are slated to expand in size by at least 30% in the next five years; Marlin will be opening its seventh property next year and plans to double in size by 2020.

From our own feedback internally we’ve always been told by our guests that they are impressed with serviced apartments – and we’ve even just won TripAdvisor Certificates of Excellence at four out of our six properties.

But not one to be content with resting on our laurels, we decided to conduct some market research of our own into the public’s perception of the serviced apartment industry. So the Marlin team hit the streets of central London armed with a clipboard, pen and questionnaire, and asked the general public what they thought of serviced apartments. The results were somewhat surprising.

Whilst 73% of survey respondents were aware of the existence of serviced apartments, less than 1 in 4 people who were visiting London had chosen to stay in an apartment – the vast majority preferring to stay in a hotel.

26% of people also believed that serviced apartments were too expensive compared with hotel rooms, and – perhaps the most surprising of all – a massive 78% of adults aged between 36 and 45 believe that hotels are more homely and suitable for families.

As managing director of an industry leading serviced apartment company, it is difficult to comprehend that this is the opinion of the general public. I have been championing the benefits of staying in a serviced apartment for many years, highlighting the value gained by booking an apartment rather than a hotel. So to hear that as many as 3 in 4 people consider hotels to be more homely than apartments is astonishing.

Of course, our survey did not ask respondents to rate Marlin Apartments or any particular serviced apartment companies – but what it does highlight is that collectively our industry faces a perception crisis.

Serviced apartments offer double the space of the average London hotel room, as well as a plethora of additional facilities including a kitchen, separate living area and separate bedroom. Clearly, families would undoubtedly benefit from these home-from-home conveniences that only serviced apartments can provide. Similarly, the fact that guests can book a two or three bedroom apartment means that the whole party can stay under the same roof – a massive bonus for groups travelling together.

So in light of these facts, where does the perception that hotels are more homely than serviced apartments come from?

Perhaps this perception arises not from knowledge of serviced apartments, but from lack of knowledge. Having had positive experiences with hotels, a happy customer will typically not change their purchasing behaviour – and the same goes for accommodation. Even if the prospect of something greater lies ahead, we are creatures of habit and generally need a good reason to try something new. As for cost, it might simply be the case that the general public thinks it’s too good to be true: more space, flexibility, freedom and facilities than a hotel – at the same price as a hotel – might seem unheard of.

In order to change the public perception of serviced apartments, the industry needs to work together to ensure that the main messages that will benefit all are being pushed. Ultimately it falls down to us as a whole to assure potential guests that not only do they receive better quality and service than hotels, but also greater value.

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