The traditional boarding house concept in Germany didn't involve much in the way of service: Guests booked an apartment for at least one month, paid in advance, made do with a kitchen, washing machine and mailbox and, at the end of the project, peacefully bid farewell. The reception desk was only intermittently staffed. There was no expectation of food service, and even the cleaning staff only came once a week to spruce up the rooms.
The best of both worlds
No more! The added value offered by a modern boarding house compared with a traditional hotel is much more than just favourable rates for long-term guests, with the stay being more economical the longer it is. In 2014, the bulk of boarding houses' clientèle was offered the best of both worlds: the advantages of "living in a home-away-from-home" coupled with the services provided by a hotel.
Contributing to this was not only the stagnating numbers of guests in the aftermath of 11 September 2001, when operators of traditional boarding houses began to understand the term "serviced apartments" as a mission and to loosen up their previously stringent rules, particularly where minimum stays were concerned. At the same time, international hotel chains like Accor, Hyatt, Interconti and long-stay pioneer Marriott sensed the market potential and invested heavily in developing and expanding the new combined concept.
While this has paid off handsomely in Asia, the Middle East and the United States, a breakthrough in Germany still seems to be a ways off. It has long been possible to book a wide range of temporary living accommodations through OBEs like HRS. In addition to well-known individual providers (Clipper, Madison, Mandala), there are also chains like Derag (The Living Hotels), Visionapartments, Accor
(Adagio), Ascot (Citadine), Adina and Marriott (Residence Inn) offering widespread long-term accommodations. But the range of apartments offered in Germany is still more of a niche. But it is a niche that offers "a real opportunity for growth", according to people like Annett Gregorius, who heads the consulting company Boardinghouse Consulting. "The potential has not been exhausted by a long shot," adds Max Schlereth, a member of the Management Board of Derag Hotels, Germany's market leader.
This is not merely based on wishful thinking or extremely low prices for the serviced apartments between Munich, Frankfurt, D¸sseldorf, Hamburg and Berlin. For guests who stay only a few days rather than multiple weeks or months ñ and these amount to 45 per cent, according to Boardinghouse Consulting ñ the price advantage is "relative" (Schlereth). According to calculations by Gregorius, average rates for an apartment in Germany range between Ä65 and Ä79 per night.
The actual secret to success for the concept is a different one: "Space is the really big advantage," said Derag Board Chairman Schlereth: generous rooms instead of the standard 15 square metres offered by a hotel room, where merely opening a suitcase can create an insurmountable hurdle between the bed and bathroom.
Companies like Siemens and SAP have long known that they can kill two birds with one stone by systematically employing serviced apartments: optimising costs while meeting the needs of their business travellers. Given the continuing cost pressures on the one hand and increasing expectations of Generation Y on the other, this advantage could also now motivate companies with far fewer employees to reorient themselves.
VDR focuses on Certified Serviced Apartments
But: There is still not enough awareness in Germany to achieve the hoped-for breakthrough – nor has a descriptive name been found to cover all types of offerings. To at least change the lack awareness, VDR has developed its own Certified Serviced Apartments logo, which BTME-Certified Managing Director Till Runte, together with industry heavyweights like Holger Leisewitz (Beiersdorf), Markus Nowara (Siemens AG), Ralf Kreische (Deutsche. Post) and Inge Pirner (Datev), present to providers they have reviewed. Certification is based on a catalogue of criteria developed by Boardinghouse Consulting together with TÜV Rheinland. This catalogue was explicitly amended for business travellers following a VDR survey of users and people booking reservations.
This was the chance Germany's "long-stay" providers had been waiting for. They also presented themselves as a group for the first time in October 2013 with the first-ever presentation of the So!Apart Award, granted for outstanding apartment concepts. However, the VDR logo is likely to bring much more attention to the industry among its clientèle – not to mention the interest expressed by Amadeus in integrating it into its own booking portal. Small wonder, then, that several dozen applications from well-known providers poured in shortly after the new logo was launched this spring.