Monday 20 August 2018

Aparthotel rise continues apace with more in the Dublin pipeline

The Business Travel Show — Europe’s biggest — at the Olympia convention centre in London. Photo: Newton Photography Ltd
The Business Travel Show — Europe’s biggest — at the Olympia convention centre in London. Photo: Newton Photography Ltd
Mark Evans

Mark Evans

The traditional corporate-stay model - with companies and executives opting for business-oriented hotels - has been disrupted in recent years through a combination of Airbnb and aparthotels.

But while the impact of Airbnb in the corporate market might have been overstated (especially outside the US), aparthotels have grown to take a slice of a lucrative market.

Dublin-headquartered Staycity has benefited from this trend - particularly among millennial workers - of staying in a home-from-home apartment close to offices and entertainment.

Staycity's latest Dublin offerings are due to open by 2020, featuring 50 apartments in Chancery Lane, 142 in Mark Street and 340 in Little Mary Street. "Chancery Lane must be up to about five or six storeys now. It'll be spring by the time we occupy it," CEO Tom Walsh told the Sunday Independent.

"Mark Street is fully through planning - that's with [investment group] Tetrarch, with a contractor being appointed in April or May, and Mary Street is with Bain capital, formerly Broadhaven. That has gone through planning but everyone expects that to go to An Bord Pleanala."

But Walsh says with Dublin in demand, "from a broad church", and not just fintech workers, the group aims to have 1,500 keys in the capital. He reveals that on top of the three openings, "there's a couple of deals still at confidential stage", adding: "If we get those we're at about 1,250 keys."

Unlike other rivals, whose market is primarily long-term lets, Staycity's average is just four to five nights. "That average hides a lot of variations," says Walsh. "We've some six-month stayers all the way up to that and beyond. Corporate travellers who are frequently on a corporate mission and get fed up with hotels, those customers use us."

The millennial trend of mixing business and pleasure, and living as locals do, has been a bonus. "That's one of the advantages of our business model - we don't consume an awful lot of the square metres in the buildings with bars and restaurants and meeting rooms: many of those areas in hotels are expensive to put there and are underutilised.

"With serviced apartments you can go to restaurants in the area, and we like to be centrally located, although we're not afraid of fringy city centre locations," says Walsh. He believes that many local restaurants do what they do "way better than we could or hotels could", so "we're seeing that take-up among millennials".

And while the company started off B2C, targeting the leisure market, the ratio is now split evenly between that sector and corporate.

"Dublin is under-supplied," he says. "We're a subset of the hotel sector so our demand patterns are similar to them. There's a good supply coming on-stream, and we're some of that, but I guess there's probably 4,000 or 5,000 keys being talked about over the next few years. Occupancy levels in Dublin match the fullest cities in Europe for sure."

The business travel sector is no different to any other, with opinions split on whether Britain's messy EU divorce could be a curse or blessing.

"Brexit had us a bit worried as 75pc of our business is in the UK, in seven or eight cities", said Walsh, but added that for now the sterling slump has counteracted any "conservatism" in business travel, with a rise in inbound leisure visitors to the company's British properties.

And the company is putting its money where its mouth is, opening Irish-themed Wilde by Staycity in The Strand in London early next month.

The pace of growth is accelerating - turnover was €60m last year, and it's forecast to hit €70m this year. Around 3,500 will be trading next year "from 2,000 right this minute", and a flurry of signings to get to the 15,000 target by 2022.

n As usual, the Sunday Independent was the sole Irish media presence at last week's Business Travel Show in London, Europe's biggest such event, attracting 7,500 delegates each year.

It brings together airlines, technology companies, airports, travel management companies, accommodation providers and buyers under one roof in a frenzy of buying and selling.

But one group - uninvited - stole the show, as drivers from London mini-cab firm Addison Lee stormed the event for a noisy protest of whistles, shouted slogans and placards. Addison Lee aims to take on Uber in the global ride-sharing market, amid a backdrop of some drivers complaining about the money they're charged to hire their vehicles, as well as gripes about their earnings.

And as security moved in to eject the protesters, they stopped off to disrupt another shiny stand - that of ever-controversial Uber - on the way out, with a schmozzle erupting, and suited delegates whipping out their phone cameras to capture the action.

Otherwise, it's the suppliers setting the agenda, and while last year's buzz was about tech, this year the serviced accommodation provider sector was out in force. More on the trends for 2018, and beyond, from the show over the next few weeks.

Sunday Indo Business

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