Serviced apartments have traditionally fared better than hotels during crises, and numerous recent studies have again pointed to the resiliency of the extended stay segment during the pandemic.
In light of the global restrictions on travel, having contracts with long-stay corporates while rising interest from leisure and staycation guests are helping to provide occupancy stability for serviced apartment operators amid the current Covid-19 storm.
Kevin Goh, CEO, lodging of CapitaLand Group and CEO of Ascott, tells Travel Weekly Asia how the serviced apartment operator is adapting to the evolving market conditions and shares his perspectives of what the future may hold for the sector.
The interview has been edited for clarity and brevity.
Travel Weekly Asia: How has Covid-19 affected the extended stay sector? Who’s booking serviced apartments in this current environment?
Goh: Ascott’s strong base of long-stay and corporate guests remain the cornerstone of our business. Our long-stay guests grow into our serviced apartments that they live in overtime, becoming more familiar and comfortable with the space. Some have further customised our apartments by bringing in their own furniture, or worked with Ascott to reconfigure the apartments for them. Ascott’s ability and flexibility to offer such bespoke services, increase the stickiness of our lodging products to our guests.
The strong demand from these long-stay guests has enabled our serviced residences across key geographies to maintain robust average occupancy rates. For instance, in Singapore, lyf Funan Singapore has achieved an average occupancy rate of above 85% from April to June 2020. Its current occupancy rate is over 90%, and above 90% of lyf Funan Singapore’s guests are on long stays of between one and 12 months.
China has also recovered strongly with average occupancy of over 90% in August at properties such as Ascott Heng Shan Shanghai and Raffles City Residence Beijing, and above 80% of the guests are on long stay of between one month and two years.
lyf Funan Singapore is partnering local tour operators to offer guests opportunities to explore the property's neighbourhood in greater depth.
TWA: Did Ascott have to close any property? What percentage of your properties are open now?
Goh: Amid Covid-19, Ascott has stepped up to provide a home away from home for healthcare workers, returning nationals, guests who are affected by border closures or city lockdowns, migrant workers and others who have been stranded due to Covid-19.
In accordance with local authorities’ advice, Ascott had to close several properties during the Covid-19 pandemic. However, 96% of our properties are in operations today.
TWA: What trends in the serviced apartment sector have been catalysed by Covid-19? And how has Ascott responded to these trends?
Goh: We are tapping on the strong design capabilities of Ascott’s in-house interior design experts to take advantage of emerging trends. These include the increased popularity of telecommuting, ecommerce and greater health and safety concerns. We have also accelerated the use of robots and automation. Ascott continues to innovate and evolve our lodging products and services to cater to new customer segments and uncover alternative revenue streams.
Digital solutions and technologies may also be further deployed to provide convenience, value and safety to guests. The use of sensors at Ascott properties can offer better safety through thermal scanning or to track footfall and crowds to facilitate better safe distancing measures, as well as smarter room energy and water management.
Ascott will increase adoption of mobile technology including the launch of a new mobile app later this year. A one-stop service, the app will offer guests contactless services such as contactless entry to their apartments, payments, check-in and check-out. It can also provide seamless in-room service, management of Ascott Star Rewards loyalty points or redemption of special flash deals.
As part of our Ascott Cares commitment, Ascott is leveraging digital technologies to minimise physical contact where applicable.
In Singapore, we worked with Singapore Tourism Board to install E-Visitor Authentication system at Ascott Orchard Singapore. It is an automated facial recognition system to minimise physical contact and has reduced check-in time by up to 70%. Guests can easily scan their passports using the facial recognition technology. Their data will be sent to the Immigration and Checkpoints Authority to verify the validity of their stay, providing a seamless check-in experience.
For our lyf properties in Singapore and Bangkok, guests can use our mobile app to check-in and out, open apartment doors, and make contactless payment.
In China, we have deployed Xiao Ya, Ascott’s service robot. It is one of the contactless technologies and initiatives available at Ascott properties in China. The robot can perform a suite of tasks such as concierge services, leading guests to the rooms or facilities, delivering clean laundry and packages, and refilling room supplies.
The robot is able to interface independently with the property’s vending machine to bring guests their ordered items via a mobile app. When the robot arrives at the apartment, it will phone the guests to announce its arrival and deliver their ordered items. The robot’s intelligent sensors enable it to move around unmanned and avoid obstacles in its paths. It is able to navigate the property’s lifts, move from unit to unit and operate the in-room telephone system without human intervention.
In China, Ascott has deployed Xiao Ya as a service robot.
TWA: With all eyes turned to domestic tourism now, how do you get local travellers to book serviced apartments when their duration of stay in a destination is typically shorter than international tourists?
Goh: In China, above 90% of our guests are currently domestic travellers. Several promotions were launched to tap into the domestic travel market. We are also working with Ctrip to bring in more domestic customers and have brought the promotions onto the WeChat platform to create interest among the younger crowd.
In Singapore, Ascott Raffles Place Singapore, Ascott Orchard Singapore and lyf Funan Singapore have been approved by the Singapore Tourism Board (STB) to accept staycation bookings. Since then, we have launched several promotions to encourage staycations. We have seen an increase in enquiries and reservations on these promotions, especially during the recent long weekends.
For instance, lyf Funan Singapore, Ascott Orchard Singapore and Ascott Raffles Place Singapore were operating at near 100% occupancy across the Hari Raya Haji and National Day long weekends. This strong demand is expected to continue into the September and December school holidays. There has been an increase in enquiries and reservations in December, especially for reservations over the festive season such as Christmas and New Year’s Eve.
As part of our signature #lyfgoeslocal programme where guests get to experience the neighbourhood’s local authentic elements and in support of STB’s SingapoRediscovers campaign, lyf Funan Singapore partnered with Monster Day Tours to conduct walking tours and with Tribe Tours to conduct photography tours. Our guests get to explore hidden spots in Singapore, find out more about Singapore’s heritage and discover new places off the beaten track. lyf Funan Singapore’s Perfect Instacation package is popular with young couples while its Staycation Adventure package is more popular with families with young children. Besides venturing to nearby Instagram-friendly spots during the tour, lyf Funan Singapore itself also has several Instagram-worthy spots, from the human-sized hamster wheel treadmill at our Burn gym, to the quirky furniture at our Connect social zone, and the designs on our apartment doors that reflect elements of Singapore culture.
Ascott Orchard Singapore and Ascott Raffles Place Singapore are also offering a Family Singapoliday package where guests will receive complimentary tickets to the Singapore Zoo or Jurong Bird Park.
Ascott's new Work in Residence initiative was launched in response to the rising remote working trend.
TWA: Ascott has rolled out the Work in Residence and Space as Service initiatives in response to the rise of the telecommuting trend. What’s the response like so far, and which markets are you seeing strongest demand?
Goh: Since the launch of Work in Residence and Space-as-a-Service, we have seen increased bookings and also received many positive feedback from corporates and guests in countries such as Singapore, Malaysia, Japan, Australia, China and Vietnam.
Many of our corporate guests are already using our serviced residences to telecommute when they stay with us. Our serviced residences offer a conducive, spacious and self-contained apartment with a fully equipped kitchen, a refrigerator and the larger apartments come with washing machine and dryer. Work in Residence is an enhancement and extension in the use of serviced residence. Guests now have the flexibility to choose either daily, weekly or monthly packages for day-use.
TWA: What’s the future of the serviced apartment operating model? Are you moving towards a hybrid model focusing on short-stay demand while keeping a portion of the room inventory for long-term stay?
Goh: Ascott’s strength on the long-stay segment has bolstered our resilience against the headwinds of the Covid-19. We will continue to focus on the long-stay serviced residence business model and double-down on this competitive advantage.
At the same time, Ascott also has different brands that cater to different market segments. For instance, our coliving brand lyf, is designed for guests on long stay with the flexibility to take on short stay. It is a hybrid lodging solution that combines the best of serviced residences, hotels and coliving apartments.