The comfort of home The ease of a hotel.... Imagine you are an exchange student.. Hotels, Hostels or...

The comfort of home

The ease of a hotel...

Imagine you are an exchange student..

Hotels, Hostels or Conventional

Apartment?What do you want

from your accommodation?

Hotels

Hotel

Flexibility of stay √

Furniture provided √

Utilities provided √

Everyday housekeeeping service √

Daily necessities provided √

24 hours concierge √24 hours Room service √

Conventional Apartments

Conventional Apartment

Spacious √

Home feeling √

D.I.Y decorations √

High privacy √

Serviced Apartments

HotelConventional Apartment

Serviced Apartment

http://www.youtube.com/watch?v=yDMyuseFl34

Extracts from Advertisements

A true home, away from home - Treasure View

A home with remarkable level of sophistication and elegance...provide a comfortable home ... creates a home ... - Pacific Apartment

Walking into each apartment, guests immediately feel at home. - Ovolo

Hypothesis

Serviced apartments combine the attributes of private homes and hotels. An alternative housing option to highly occupied workforces who have little time to relax and deal with housekeeping and therefore demand the services and convenience that conventional high quality hotels provide, while still wanting to maintain the feeling of home at the same time.

Flow of Content

Background information of Serviced Apartments (SA)

Reasons of choosing SA

Summary and Analysis

ProspectConclusion

Background information of Serviced Apartments (SA)

What is Serviced Apartment?



Types of Serviced ApartmentPremium S.A.• $70,000/mth or above for a

single room

Budgeted S.A• $20,000/mth or below for a

single room

The Lily, Repulse Bay YWCA, the Lodge, Kowloon Tong

華懋 The Lily (Repulse Bay) TVC

http://www.youtube.com/watch?v=WkDq9u86JuU

What Serviced Apartment actually is?1. Furniture provided

2. Housekeeping or Maid service

4. Basic Utilities provided

Internet, water, electricity, gas and etc.

5. Kitchen

Background information

1980s

• The concept of serviced apartment was created in the United States• Hotel’s service and Apartment’s management • Originally for rent to tourists

1990s

• Serviced Apartments were introduced in Hong Kong

Target Customers

Business expatriates

Travelers

Local families

Students

Customers Profile – NORMAL

Business expatri-

ates, 65%

Travelers, 13%

Local fam-ilies, 17%

Student, 5%

Customers Profile - PREMIUM

Business expatriates94%

Travelers3%

Local families1% Others

2%

Kinds of Serviced Apartment

Characteristics of SA – 7Ps

Product

Price

Place

PromotionPeople

Process

Physical evidence


• Product:


• Price:

Premium: priced at prestige

• Pacific Place Apartments:• $72,000 – 200,000 per month

Normal: priced at functionalities

• YWCA : $8,600 – 16,000 per month

Kowloon City and Wong Tai Sin

Price/month: $11300 - $17188

Eastern

Price/month: $18066 - $40949

Yau Tsim Mong

Price/month: $14632 - $26964

Central and Western

Price/month:

$25744 - $51550

Wan Chai

Price/month: $15070 - $26535


Place:

• Mainly Central Business District• e.g.: Central, Admiralty, North Point, Tsim Sha Tsui

Promotion:

• Articles, Internet, newspaper advertisement, Word-of-mouth• Discount depends on the rental period

People:

• Receptionists, cleaning workers, salespersons, security guards, training staff


Process:

• Enquiry, confirm booking, check-in, check out

Physical evidence:

• Employees’ uniform, good security, privacy policy, quality guarantee, furniture, design, facilities, location, tidiness

Reasons of choosing SA

IntervieweesPacific Place Apartments, Admiralty

• Premium serviced apartments

The Lodge, YWCA (Young Women Christian Association), Kowloon Tong

• Budgeted serviced apartments

Yesinn Space Serviced Apartments, Tai Kok Tsui

• Budgeted serviced apartments

Colliers International, Wan Chai

• Property agency

Case Study Scenario

Nationality •Dutch

Occupation •Master student

Reason for coming •Exchange

Budget for accommodation in HK

•HKD$7,000 per person

Location of accommodation required

•Tsim Sha Tsui District

How they evaluate and pick a SA?(Couple)

Hillwood Vista

Hanley Mansion

Gateway Marco Polo


• Price (holding everything constant and if they live there for more than 1 month)

Serviced Apartments

An apartment: $14,000/ (Hillwood Vista)

Hotels Single room: $52,500 (Gateway Hong Kong Macro Polo Hotels)


• Price (holding everything constant and if they live there for more than 1 month)

Monthly Rental Price per square feet

Serviced Apartments

Single room at 500 ft.$14,000 (Hillwood Vista)

$28.0 per square feet


Flat at 450 ft.: $9,500 (Hanley Mansion) $21.8 per square feet


• Location and transportation (Situated at Tsim Sha Tsui district and with desirable price range: $14,000 per month)

Serviced Apartments Near campus and central area

Hotels Too far away from campus and central area

Conventional Apartments Near campus and central area


Hillwood Vista

Hanley Mansion

Gateway Marco Polo


• Size of Area (Situated at Tsim Sha Tsui district and with desirable price range: $14,000 per month)

Serviced Apartments About 500 sq. ft.

Hotels About 350 sq. ft.

Conventional Apartments About 450 sq. ft.


• Feeling of home

Serviced Apartments

- With kitchen- Pleasant home decoration - Home design

Hotels- No kitchen- No home decoration- Room designed for travelers


- No furniture- Not furnished- No decoration


• Service

Serviced Apartments With housekeeping once per week

Hotels With Housekeeping everyday

Conventional Apartments Without housekeeping

What are their evaluation criteria?

How about business expatriates?

Why Serviced Apartments?(Business Expatriates)

• Rental Period

Serviced Apartments

Minimum: 28 days (required by regulations)Tenancy length: 75% - less than six months

Hotels No restriction


Minimum: 1 year(normal practice)


• Resource Allocation of Company

Serviced Apartments Bridge the gap

Hotels Cost too much


High property priceLow utilization rate: 3-4 month per year-> No longer hold residential properties


• ServiceHousekeeping Room Service

Serviced Apartments

- Premium: everyday- Normal: 1-2 time(s) per week

- Premium: anytime- Normal: none

Hotels - Everyday - Anytime

Conventional Apartments - None - None

YES, 90%

N/A, 10% YES, 12%

N/A, 88%


• ServiceEngineering Team Laundry

Serviced Apartments

- Premium: 7 days a week- Normal: 5 working days a week

- Premium: free- Normal: once a week / extra payment

Hotels - 24-hour - Extra payment

Conventional Apartments - Arranged by tenants - Arranged by tenants

YES, 10%

N/A, 90%

YES, 54%

N/A, 46%


• ServiceInternet Utilities

(Water, electricity, gas)

Serviced Apartments - Included in rental payment - Included in rental payment

Hotels- Premium: included in rental payment- Normal: Extra payment

- Included in rental payment


- Registered and paid by tenants - Paid by tenants

YES, 87%

N/

A, 13%

YES, 87%

N/

A, 13%


• Features

Serviced Apartments

- Comfortable working area- More decorations- Unique design- Fully furnished- With kitchen and refrigerator- Some with washing and drying machines

Hotels

- Fully furnished- Without kitchen- Uniform and standard- Clean and tidy- White color in major for bedding


- Probably not be furnished- Designed by tenants


• Privacy

Serviced Apartments Higher privacy

Hotels Lower privacy

Conventional Apartments Higher privacy


• Facilities

- Some provide the best facilities in the town

Four Seasons Place • Jacuzzi• Heated swimming pool at 59th

floor with fantastic view• Spa• Comprehensive gym room


• Facilities•swim

ming pool, fitness center

Some provide the basic facilities

•Pacific Place Apartments share facilities with Conrad Hong Kong

Some share facilities with related hotel

Summary and Analysis

Other findings and analysis

• Less service• Toiletries are not provided• Only weekly housekeeping services

Why serviced apartment is cheaper?


• Minimum stay period (Managerial side)

Hotel

• Flexible tenancy terms• Higher cost for high

daily turnover• High cost for

hotel/guesthouses license

Serviced apartment

• Lower cost for low daily turnover

• Not regulated by Hotel and Guesthouse Accommodation Ordinance

A "hotel" and "guesthouse" mean any premises being held out in which sleeping

accommodation is provided for any person presenting himself who appears able and

willing to pay a reasonable sum for the services and facilities provided for a period of less than

28 continuous days.


• Minimum stay period (Tenant side)

Hotel

• Flexible tenancy terms

• High rental

Conventional apartment

• Inflexible tenancy with long tenancy terms

• Usually 1 year fixed term and option to renew for another 1 year

Serviced apartment

• Quite flexible for short to mid-term stay with low rental


Make simple food rather than full meal

BusyUtensils are not

enough for making full meal

Dining in Hong Kong is very

cheap

High utilization rate

Most have self-catering facilities


Some arrange activities among tenants

Barbeque, hiking etc.

Home-like decorations

e.g. Wall paintings Home-like design

e.g. Light color wall, Kitchen

Prospect

Prospect and Analysis

Current

Target customers:

Foreign business travelers

Business is still growing

Prospect and AnalysisFuture

Target customers:

Foreign business travelers

Optimistic:

Fulfill the gap between long term and short term stay

Other customers markets:

- Local families

- Medical tourism from Mainland China

Conclusion

Conclusion

A new type of choice

Meets the needs of people who lead a busy life

More time to work and relax

Main selling points are price and services

Conclusion

Large working area, instant broadband, fax etc

Fulfill the need of short to mid term business assigments

Kitchen, home feeling and other facilities are bonuses

Limitations

Limitations

Limited number of respondents

Managers are not willing to provide detailed figures

Respondents mainly from the managerial side, may not truly represent the view of residents

No business residents are interviewed

Limited academic literatures for references

References• Hong Kong Property Market Overview. Rep. Hong Kong: Colliers International, July 2010.

Print.• Global Serviced Apartment Industry Report 2010. Rep. Apartment Service Worldwide. Web.• Hong Kong Serviced Apartment Market Update. Rep. CB Richard Ellis, 2006. Print.• Foxley, Sue. "Practice Paper: Serviced Apartments in the UK - a Growth Sector?" Journal of

Property Investment & Finance 19.1 (2001). Web.• Turner, Sara. "Feels Like Home." Business Traveller (UK/Europe Edition) Apr. 2010: 42. Web.• Chang, Gary. Hotel as Home. [Hong Kong]: MCCM Creations, 2005. Print.• Freitas, Ferstad Corrine, and Union Institute and University. A Sense of Home: What

Constitutes a Sense of Home and Community for Pre-adolescent and Adolescent Youth Living in International Transition? Vol. 63-03. Dissertation Abstracts International. Web.

• Hart, Mechthild U., and Miriam Ben-Yoseph. Psychological, Political, and Cultural Meanings of Home. New York: Haworth, 2005. Print.

• Gaard, Greta Claire. The Nature of Home: Taking Root in a Place. Tucson: University of Arizona, 2007. Print.

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