Transparency: serviced accommodation must step out of the shadows or miss out on its potential

The serviced accommodation sector continues to evolve at a considerable pace; leveraging tech and innovation to develop living spaces and services that can better meet the needs of the corporate market. Unfortunately, at the same time, I see it labouring under a perceived lack of transparency. Failure to change this could have serious repercussions.

A 2019 report by global hotel consultancy HVS has forecast that the sector will outpace the expansion of traditional hotels over the next three years. By 2022, 23,600 apartments will be added to the European market, of which the UK will account for 32 per cent. It’s brilliant news for a sector that has so much to offer the corporate market by way of choice, flexibility and diversity.

But if there is one thing that could still hold the sector back on fulfilling all that potential, it is its lack of transparency. Shadowy processes and confusion over ‘ownership’ still plague perceptions of the sector, ultimately impeding the evolution of serviced accommodation as a serious solution for corporate management.

In attending industry forums and summits, as well as reading coverage of the fast-growing sector, I’m only too aware that this lack of transparency remains a perpetual topic of discussion – managers and travellers alike harbouring lingering doubts about what this means for its credibility.

To give an example, I recently sat in on a discussion panel at the Business Travel Show in London where a hybrid operator claimed that their 3,000+ operator partners had all successfully met the standards of the International Serviced Apartment Accreditation Process (ISAAP). This is an accreditation process run by, and I apologise for the long names, the Association of Serviced Apartment Providers (ASAP), the Corporate Housing Providers Association (CHPA) and the Global Alliance of Serviced Accommodation (GASA). I assume everybody in the room would have been reassured by this statement had it been true. However, the number of accredited operators globally is substantially lower than this, and the process certainly hasn’t reached most places in the African continent, India and South America.

It’s possible to question this credibility further when you consider that clarity is often lacking from the minute a booker searches for and decides to reserve a serviced property. They, and more importantly the traveller, may unwillingly be kept in the dark as to who owns the accommodation – a regular occurrence when booking with a supplier who relies on a network of ‘partners’.

The practice has obvious and serious implications for duty of care. After all, how can corporates guarantee the safety and security of their employees, let alone policy compliance, when fundamental details are directly or indirectly kept from them?

For travellers themselves, this practice must be a major source of concern– and stress too. Imagine arriving at your destination after a long journey, to find no trace of the company with whom you made your booking? With traveller wellbeing shooting up the corporate agenda this will be a significant consideration for any company.

The impact is, therefore, far-reaching with employee wellbeing, duty of care and adherence to corporate travel policies all compromised and organisations forced to engage in a sort of accommodation lottery.

Consequently, the sector cannot continue to simply pay lip service to transparency if it is to overcome these problems. It must tackle the issue head-on if it is to stand a chance of competing with the might of the hotel sector, not to mention Airbnb and similar providers.

How can it do that? The starting point must be making those specialist or hybrid agencies (through which travel managers often book serviced accommodation) more accountable. This could include ensuring a benchmark standard or accreditation to ensure clarity, transparency and give peace of mind that the operators they are using meet a minimum criterion. At the very least, that should include due diligence carried out on all serviced accommodation providers and an obligation to distinguish between owned inventory and inventory managed by a third party.

Reducing dependency on these agencies is another route. Were we to minimise the booking through intermediaries with their complicated fee structures and instead allow managers to book directly with operators in key locations, much of this obscurity would clear – and prices likely fall too.

These changes will not be easy, and they won’t happen overnight, but the serviced accommodation sector can’t afford not to act if it plans to make the most of all its current potential. It’s time to step out the shadows and throw open the doors.

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