According to the report, Dubai has the largest serviced apartment supply in the region at approximately 29,000 keys (232 properties), of which 36% of the total supply is managed by international brands. Outside of the UAE, in terms of number of serviced apartment keys, Riyadh follows with 129 properties (approximately 5,500 keys), however, serviced apartments in the city average a lower 43 keys per establishment, with only 2% of the stock managed by international brands.
Commenting on the findings, Filippo Sona, Head of Hotels for Colliers International in the MENA region said: “We have seen a boom in serviced apartments in the more mature markets of Dubai, Abu Dhabi and Doha where it currently exceeds 35% of total serviced apartment supply. However, it is a relatively new concept to the rest of the region where in many instances it is more of an afterthought, with residential buildings being converted into serviced apartments either after or during construction. Further scope exists for developing larger, more efficient, purpose-built properties that follow international operating standards.”
“Our research indicates that demand for serviced apartments is no longer being generated by just long-stay guests such as relocating expatriate families, but also, short-stay guests who are visiting a city with their families for leisure purposes. In order to attract this sizeable market away from hotels, serviced apartment operators need to ensure that they are offering the highest levels of cleanliness and service, while also offering value to their guests.”
Data from travel and hotel data specialist, Olery which has analysed 140,000 reviews on various hospitality properties within the Middle East, revealed the key differences between serviced apartments and hotels p in the region, based upon guest reviews;
- Better value than hotels: Serviced apartments and 5-star hotels in the region have the highest rating in terms of value (better than 3 and 4-star hotels). When considering purely the internationally branded market, serviced apartments received a better value-rating than 5-star hotels.
- Service: Internationally branded serviced apartments achieved a higher scoring service than 3, 4 and 5-star branded hotels in the region. As of August 2015, internationally branded serviced apartments consistently outperform unbranded, locally branded and regionally branded properties in the region in each of the scoring segments, namely room rating, value, service, location and cleanliness.
“As a business model, serviced apartments carry less risk that hotels – typically achieving higher occupancy rates and suffering less from seasonal swings. We anticipate that this sector will continue to grow in popularity in the region, and expect that in the next few years we will see an increasing number of global hotel brands moving into the space, “concluded Sona.