Following the participation of Group Head of Sales José Luis Hummel at last year’s event, another member of the VISIONAPARTMENTS family was invited to join a podium discussion at the SO!APART 2016. On the second day of this annual gathering of the international serviced apartments industry in Berlin, Group Head of Marketing and Communications, Alain Gozzer represented the company in a conversation themed “Austria and Switzerland in Deep Sleep?” Among luminaries including Marina Ostinelli (Assistant General Manager, Base Nyon), Roman Kopacek (Hotel and Tourism Consulting, Michaeler & Partner), and Heimo Rollett (Editor-in-chief, Immobilienwirtschaft), Gozzer offered his thoughts on the Swiss market in particular. Here, we’ve compiled some excerpts from the discussion exclusively for the readers of our blog. What is the general sentiment regarding the serviced apartments segment in Switzerland?
Generally very positive. The segment is well established, in part due to the cost of living in the country – which is high no matter how you look at it – and how difficult it can be to find a nice apartment in a good location on short notice. I think Switzerland will continue to be an ideal location for the serviced apartments industry.
Who are the main players out there right now?
More and more companies of varying quality are entering the market, but not many are operating in multiple locations. One interesting player is NEST, which VISIONAPARTMENTS is already working with. They serve several destinations we’ve yet to cover. That’s actually something that makes the serviced apartments industry unique: Rather than butting heads, we keep finding out that cooperation can work. Meanwhile, international players – Frasers and Adagio in Geneva, for example – are increasingly entering the Swiss market. Finally, we’re seeing a rise in hybrid service providers, as well. The hotel industry never sleeps, after all, and it’s realigning itself to present more attractive offers to those looking for extended stays.
How high is the current level of demand?
It’s at a consistently high level. Switzerland remains an ideal location for companies’ headquarters, and it seems, the Brexit decision plays right into the country’s hands, as well. Furthermore, we’ve already made up for the small dip we saw following the Swiss referendum on immigration.
Is there enough supply to meet the current demand?
No, there’s still room for expansion.
What type of offerings are particularly popular with customers?
Since the majority of guests travel alone, the lion’s share of demand is for smaller units – studios, single-bedroom apartments – which are easier on companies’ budgets. Larger accommodations are less popular, but the customers who want them often go straight requesting luxury options.
Which Swiss cities are especially attractive when it comes to serviced apartments?
The ones that attract companies from around the world. Along with Zurich, Basel, Geneva, and the entire Lake Geneva region, this includes more and more so-called “B destinations” like Zug, Neuenburg, and other smaller cities in Eastern Switzerland.
Where do you think the potential lies?
The segment still offers opportunities, as I alluded to before – including in fine-tuning the overall services available. International business travellers that are accustomed to serviced apartments available in other regions (New York, for example) expect more from the service aspect than is typically provided in Europe so far.
If you had your way, where else would VISIONAPARTMENTS be operating?
We already have 13 properties all across Zurich and a number of locations in Lausanne. Geneva, Vevey, Basel, and an additional property in Lausanne are all in our pipeline right now. We’re also keeping our eyes open for potential projects in the region around Zurich’s airport, as well as in Zug, Eastern Switzerland, and other B destinations.
What are some services that guests actually use?
Our base package of a fully furnished apartment, Internet and TV access, and weekly cleaning is usually enough for most of our guests. Additional services aren’t requested all that frequently, but one of the more popular options is the laundry service.
Where does your company’s business generally come from?
From virtually every industry and part of the world. It’s hard to define in specific terms, and it’s always changing. Right now, for example, we’re seeing increased demand from the United States and Asia. Europe, including Great Britain, are always a good source of business for us.
How would you describe your target market?
I assume it’s similar to the market in Austria and Germany: It’s mainly the typical international business nomads who come calling in Switzerland, but also more and more private individuals who need a temporary roof over their heads.
What is the average length of stay in Switzerland?
Based on our experience, it’s somewhat longer than in Germany. In Zurich, our guests still stay for up to three months on average.
How high is your average daily rate?
In Switzerland, it was CHF 124 in 2015 (up from CHF 110 in 2014).
And what is your company’s occupancy rate?
Our VISIONAPARTMENTS locations across Switzerland are currently just over 95% booked; our rate was 95% in 2015, and 94% in 2014.
What serviced apartment projects do you already have in the pipeline for Switzerland?
Right now, we’re proceeding with plans for Geneva, Vevey, Lausanne (St. Sulpice), and Basel.
What terms are used to refer to your segment in Switzerland? Are they similar to those common in Germany, or more like the U.S.?
Like in many other European countries, our segment doesn’t really have a clear profile in Switzerland. I think the longer people keep talking about “serviced apartments”, the more it will become the norm. That said, the term “möblierte Mietwohnungen” (furnished rental apartments) is also common in our home country. It’s important to remember that three main languages are spoken in Switzerland, which doesn’t really make it easier to agree on a standard term.
How familiar are people with the concept of serviced apartments in Switzerland?
It’s hard to say since we don’t have any reliable statistics, but awareness is definitely growing. At VISIONAPARTMENTS, we’re doing everything we can to raise our segment’s profile through proactive marketing and PR activities. We know that we need to keep doing our best to sell people on the services we provide. Along with quality marketing and communication activities, that includes refining the services themselves and continuing to reach new milestones in opening new locations. Those of us at VISIONAPARTMENTS are planning to stay tuned in that respect, and we’re also looking forward to what new players like iPartments are about to bring to the Swiss market. That kind of players are definitely strengthening our segment and will make the serviced apartment business even more popular in Switzerland.