The term ‘serviced apartment’ was coined in the 1970s, primarily to describe accommodation servicing the national corporate relocation market and Queensland’s holiday market. The concept responded to a growing demand for apartment-style accommodation for extended stays, offering a more residential feel and facilities allowing guests to look after themselves.
The sector grew strongly to now dominate the accommodation landscape, accounting for a 25% market share. The understanding, penetration and consistency of the product in Australia is much stronger than in other parts of the world.
Serviced apartments are typically found in purpose-built complexes with professional onsite management. Most of the major operators offer a mix of studio, one, two and three-bedroom units, all with one or more bathrooms, living area, kitchen and laundry. Daily room servicing may be available, although is not typically provided for multi-night stays.
Revenue is expected to show growth at an annualised 5.9% over the five years through to 2018-19 to reach $3.4 billion (IBISWorld Research Report 2018). Two of the largest providers are Accor Asia Pacific, which recently acquired the ASX-listed Mantra Group, and Quest Apartment Hotels, for which RESORTBROKERS is ‘preferred broker’.
Mantra Group had achieved exceptional growth, largely through the acquisition of management rights and management/marketing agreements, operating under three brands: Peppers, Mantra and Breakfree.
Quest Apartment Hotels focus to a greater extent on catering for the corporate extended stay traveller and well as the leisure market, and operate under a unique model where franchisees purchase long-term leases and trade under the powerful Quest brand.
Other key players in the Australian market include Minor Hotels through its Oaks Hotels & Resorts and AVANI brands, TFE Hotels (Toga Far East) and Meriton Suites.
The ‘apartment hotel’ model has provided greater flexibility and efficiencies for developers, allowing expanded supply to be established. At the same time, ‘mum and dad’ property investors now have access to the lucrative accommodation sector through investment in strata titled apartments.
RESORTBROKERS has strong, long-term relationships with the major developers and operators of serviced apartments. For the latest information and opportunities in this surging market, contact us on 1300 665 966 to speak with a specialist broker.