Europe is the second-largest serviced apartment market in the world after the US, and although it is relatively young, having emerged over the last 20 years or so, the volume across the region means it is a force to be reckoned with and has some influence on definitions for the future.

As countries such as Germany and the UK compete for market share in the emerging markets, so their influence is important in the battle of the brands, and in terminology.

Corporate business based in Europe has as strong an influence as corporate business based out of the USA, and perhaps the US global brands need to listen to European businesses if they want a share of their global market. The latest Santa Fe global mobility survey shows that the USA is expected to continue to top the relocation destinations table for the next 12 months but is followed closely by China, with the UK third, followed by Singapore and Germany.

We know from the Global Serviced Apartments Industry Report that the main concentrations of serviced accommodation in Europe fall in London, Paris, Geneva, Dublin, Brussels and Berlin, but the products vary widely, with different standards across countries.

Jo Layton, of The Apartment Service, representing Europe at the Around the World discussion session at the summit, commented that the serviced apartment picture in Europe ten years ago had been hugely fragmented, with virtually no distribution across the continent. Today, she said, there is a huge challenge but also an opportunity to make the product clearer.

Ms Layton partly explained the confusion in the European market by the number of languages spoken and the different tax systems, legislations and currencies that made it difficult for global agencies to know what they were selling.

She was clear that the industry needed to clarify its offering in order to move forward, and that the global and US providers must listen to the buyers in Europe. For example, although Paris was defined as a mature market in an earlier session given by HVS, with a lot of aparthotels and an existing résidence de tourisme classification of one to five rooms with kitchenettes, in terms of catering for the relocation market, which requires longer-stay serviced apartments, the market was still immature.

Germany has a newly created classification scheme known as Certified Serviced Apartment.

The HVS report states that France, Germany and the UK are all creating clearer industry terms and definitions, if not certification schemes, for serviced apartments, which it sees as imperative if industry-wide understanding, security and transparency are to be fostered.

According to the Santa Fe report, 76 per cent of the clients surveyed offer temporary housing, with 62 per cent providing destination services support. Net assignment activity is expected to grow by 29 per cent over the next 12 months. The biggest growth is expected to be in the professional services and consulting sectors.

And who will be moving? Well, it’s the managers, at 58 per cent, with specialists and technical experts following at 44 per cent. Engineers and oil and gas experts are most in demand. Senior executives at president, vice-president or director level will also be on the move.

With short-term assignments now accounting for 46 per cent of relocations, the message for the serviced apartment sector is clear.

Other global mobility surveys, too, show that companies are planning an increase in relocation over the next year. Serviced apartments will be needed, as 76 per cent of organisations offer temporary housing as part of their benefits package.

With 52 per cent of companies surveyed having only one or two staff in their global mobility team, it is also clear that relocation professionals working for relocation management companies and destination service providers should be the serviced apartment industry’s new best friends if they want a share of the corporate relocation market.

What’s in a name?

After years of putting forward the serviced apartment case and educating corporates about the benefits of this accommodation solution, I was perturbed to hear of an attempt to change the terminology in Europe.

Length of stay currently determines the product. It is all about the distinction between aparthotels, which accommodate shorter stays of a few nights and operate on the hotel model, and serviced apartments, which are typically looking for stays of four to six weeks or longer.

The introduction of the alien US term ‘corporate housing’ to the UK and European markets would surely set the clock back and add more confusion to this young property sector. It already struggles to educate its marketplace, but recognises the need for clarity and is making strides as it seeks to keep pace with the growth agenda and satisfy the need for consistent quality, compliance and trackability.

After the sterling work done by members of the Association of Serviced Apartment Providers (ASAP) in the UK to educate the corporate marketplace, promote quality standards and introduce an accreditation scheme, changing the vocabulary to ‘corporate housing’ would surely be a retrograde step.

In the UK and Europe, the corporate world of HR and its relocation service providers understands the terminology. There is always more work to be done on clarification of offering, but progress has been made.

In the long term, an international accreditation scheme may be the answer, but as this hasn’t been achieved in the hotel industry, it seems to be an unrealistic goal in the short term, when providers are focusing on chasing growth in both existing and new markets.

There is strong demand for the right product, and the leading global brands are striving to clarify their levels of offering. BridgeStreet Global Hospitality, Oakwood and The Ascott Limited are just some of those that have made huge strides over recent years.

SACO Apartments has a clear and respected brand and is managing to move into international markets, bringing its loyal corporate clients with it. New initiatives such as the TAS Alliance represent a network of independent providers and the potential framework for tiers and consistency.

If the corporate relocation buyer is the prize, perhaps a little more consultation with both the corporate global mobility professionals and the relocation service providers would be wise.

Source: http://www.relocatemagazine.com