Serviced apartments are growing in number and popularity throughout the Asia Pacific region, with demand from both investors and occupants. This trend generated plenty of discussion at the recent Tourism, Hotel Investment and Networking Conference Indonesia 2016, which was held at the Sofitel Bali Nusa Dua Beach Resort.

Schwartz Williams, the publisher of The Hotel Conversation and other real estate media outlets, was a major sponsor of the conference and hosted a panel discussion featuring leading hotel chain operators from the Asia Pacific region. The one hour session titled ‘Extended Stay Segment: The Long and Short of It’ was moderated by Mark Williams, CEO of Schwartz Williams.

Panelists included Kenneth Rogers, General Manager of The Ascott, Hoe Kit Mak, chief investment officer of Frasers Hospitality Group, Vernon Lim of vacation exchange company RCI, Dean Schreiber, managing director of Oakwood Asia Pacific and Terje Nilsen of Seven Stones Indonesia.

For those who missed it, here are five takeaways from the panel discussion:

1. The nature of expats in Indonesia is changing

"Expat numbers are down considerably and we see less people relocating with wife and three kids and a dog and more people singles or couples on a shorter project basis, maybe three or six months," said Rogers. "There’s more of that, where companies will be utilizing people on a shorter project basis rather than long term relocation. We certainly still do have people staying with us many years but its less than it was in the past."

2. Serviced apartments are becoming more popular

"Right now, you can see the hotel brands are also developing long stay products and brands to cater to the people who travel with a family who don’t want to come and stay in separate hotel rooms, even if you can put them on the same floor or in adjoining rooms, because it is still a hassle to go between multiple rooms and you can only adjoin two rooms," says Mak. "There is a real demand for a serviced apartment where a large family can book a three bedroom, for example."

3. Developers are recognising the need for serviced apartments

Schreiber said, “Hotels are a cost investment for any owner, whereas a serviced apartment is less of an expense because you’re not required to fit out all of the components required of a hotel like the big restaurants, the big ball rooms, and the exit strategy for an investor in a serviced apartment is better because if you ever decide to exit from that asset class, you can sell it as an existing serviced apartment, you can sell it as an apartment, you can sell it as residential play, whereas a hotel you can only sell as a hotel. That’s where the trend is going with investors and developers, the returns on a serviced apartment are greater than a hotel because you don’t have a lot more of an overhead."

4. Airbnb isn't necessarily a threat

"Airbnb has really helped us in the sense that it brought to light to a wider audience that there is an alternative to staying in a hotel," said Schreiber. I think they did us a great favour from a serviced apartment industry.

"If we have excess inventory that we can’t sell, maybe one room here or one room there that’s tricky to sell, we might put that on Airbnb. It’s just a tool of booking for us."

5. Lombok is an area to watch in Indonesia

"Indonesia has declared ten areas that they want to focus on and they’re starting to do some sort of infrastructure and investment development," said Nilsen. "The first one to come is Lombok. Just a few days ago the government has committed to building at least 1500 rooms over the next few years. That’s a big move and a big project that is probably going to trigger other players to look at Lombok too."

http://www.thincindonesia.com/

For more on this topic:

Terje Nilsen's commentary

Dean Schreiber's commentary

Kenneth Rogers' commentary