Serviced hotel apartments are proving popular with expats moving to Singapore who prefers them to renting or buying a home, it is claimed.
Demand for these kinds of residences has increased with American, European and Japanese expats increasingly likely to choose this kind of accommodation, according to providers. Expats from China, India and the United Arab Emirates are also increasingly opting for serviced apartments.
This type of accommodation typically attracts longer staying guests by providing fully furnished units that are more spacious than an average hotel room. They can also come with services like weekly house cleaning and baby-sitting.
Serviced residences say their businesses have been making a good recovery since the recession of 2008/09, when companies were less likely to commit to longer leases due to the downturn in the global economy.
Operators are reporting a monthly occupancy rate of up to 95%, a marked increase compared to their average rates of between 70 and 80% seen last year. In addition, the length of stay is increasing. Fraser Hospitality said it has hosted guests who stay on for more than five years.
Demand means that prices are increasing. Far East Organization said that its rents have gone increased by up to 15% this year compared with the start of 2010.
According to Tan Boon Khai, regional manager for Singapore and Malaysia for Ascott, said that demand has also increased as more multinational companies are choosing to base their operations in Singapore.
He added that factors such as economic stability and a high level of safety and security have also boosted Singapore’s appeal as a global hub among the international business community.
Several serviced residences are enhancing their properties and putting in new features to satisfy this growing demand. Tan said that some of the squash courts at some of Ascott’s Somerset properties have been converted into children’s playrooms to cater for an increased demand from expat families. Fraser Hospitality has revamped some of its properties and added new features such as a gym and an all day cafe.
According to Robert McIntosh, executive director of CB Richard Ellis Hotels, Asia Pacific, said the future for serviced residences looks promising. Unlike hotels, guests in these apartments take out leases therefore making this segment of the hospitality market less vulnerable to global changes.
The biggest challenge for this industry now, he said, lies in retaining good personnel. ‘While guests are more self-reliant in a serviced residence, they do tend to stay for a longer period. As an operator, you would want to ensure that your staff is able to develop a long good service relationship with guests,’ he added.