SERVICED residence operators in Shanghai discuss the keys to success in a fiercely competitive market while also sharing insight into newly emerging industry trends.

Could you give a brief introduction of your property?

Kan: Shanghai Centre is truly an iconic project that introduced the first modern commercial development to the city. It was also the first foreign-developed project and, for eight years, the tallest building in Shanghai. As a mixed-use development, we offer superior standards with an unprecedented range of facilities including 472 luxury serviced apartments, over 30,000 square meters of prime office space, an upscale tri-level retail plaza, a full-sized performance theater, a trademark exhibition atrium and the deluxe five-star hotel — The Portman Ritz-Carlton, Shanghai.

Lai: Shama operates 12 serviced apartment properties in China and Thailand, with five properties in Hong Kong, four in Shanghai, one in Dalian, one in Hangzhou and one in Bangkok. Two new properties will be opening in 2015 —­ Shama Yanglin Beijing and Shama Chengdu. The first Shama serviced apartment was built in 1996, marking the introduction of boutique serviced apartments to the Hong Kong real estate market. In 2010, Thailand-based hotel management company ONYX Hospitality Group announced the acquisition of Shama.

Leung: Lanson Place Jinlin Tiandi Serviced Residences in Shanghai overlook the fashionable Xintiandi entertainment area as well as the tranquil lake beyond. The serviced residences are in generous three bedroom layouts with contemporary furnishings, well equipped bathrooms and kitchens. On property is an indoor heated swimming pool and exercise room for exclusive use of our guests.

Fang: Savills Residence Hongqiao offers 78 exquisitely designed, fully furnished serviced apartments with a variety of different layouts that range from one, two and three bedroom apartments. They have been fitted out and decorated to the highest standards, each equipped with under floor heating throughout, customized climate controls and a complete range of Western kitchen appliances including a dishwasher. Many have a large balcony overlooking Hongqiao Park.

Barthes: Mandarin Oriental Pudong, Shanghai is ideally situated on the bank of Huangpu River within walking distance of the Lujiazui business district. We are part of the new Harbor City waterfront project, a 25-hectare development combining office towers, luxury retail outlets, fine dining, entertainment and landscaped gardens. Right at our doorsteps is the Shanghai Metropolitan Marina Yacht Club. We are partnering with them to allow our premier suite guests to enjoy an exclusive 45-minute cruise ride on the Huangpu River.

The hotel features 318 spacious guest rooms and 44 suites and is also home to the largest and most expensive Presidential Suite in Shanghai, spanning 788 square meters with a sky garden terrace and magnificent river views. The 210 luxury furnished apartments — from studio to three bedrooms — are Shanghai’s only fully serviced riverside residences, and are designed to offer the ultimate in luxury and comfort.

What have you done recently to further improve guest satisfaction at your property or what do you plan in the short- to medium-term?

What have you done recently to further improve guest satisfaction at your property or what do you plan in the short- to medium-term?

Kan: We have wrapped up a three-year renovation of our serviced apartments, which included newly upgraded units, corridors and lobbies. We also keep on improving our retail mix by adding new and exciting food and beverage outlets (five new restaurants and shops will open by fall of 2014). With the installation of brand-new digital movie equipment we are also able to show the latest local and international blockbusters at our performance theater. Combine this with our already existing offerings (two spas, an international supermarket, a bar/lounge) and our residents, guests and visitors can spend the entire day at Shanghai Center.

Lai: “No boundaries” is Shama’s exclusive lifestyle program that grants our guests everything from a tour of lifestyle venues and amenities in the neighborhood, tenant activities in our friendly community, and recommendations about hidden gems in the area. We want our guests to make the most of their new city and live like a local. Shama believes that an exceptional living experience requires an unrivaled standard of service. To meet these standards, we are committed to hiring and training the most experienced and qualified staff. The result is a team comprised of dedicated professionals who go out of their way to meet the needs of our tenants and who work continuously to improve our service quality in innovative and practical ways.

Leung: We organize regular social activities and happy hours for our residents. Our latest activities include a ladies outing to the Shanghai Flower Show in Pudong and a get-together with residents with beers and wine at our lounge on St Patrick’s Day. We take advantage of holidays and organize gatherings for our residents, as our corporate brand concept states: My Life, My Style.

Lanson Place aims to deliver a lifestyle to our residents. Most of them are expatriates, so it is essential for them to get settled down and enjoy the local culture when relocating to a foreign country. These social activities can surely help them bond with other residents and the whole community.

Fang: We recruited a senior Japanese Operations Manager with hotel background and overseas working experience to handle operating issues and guest requests. It will build strong relationship with our residents and exceed their expectations. Also we will plan some tailor-made events for our residents to give them a richer social life on our property.

Barthes: We work hard to maintain a consistent global service culture across our company. Whether a guest is staying at one of our properties in Europe, the US or Asia, we strive to ensure that the service experience meets and exceeds expectations, based on our legendary quality service standards. To that end, we at Mandarin Oriental recognize the importance of employee training and development as a way to attract, retain and motivate our employees. It is my responsibility as general manager to support this goal by providing employees with the best guest-oriented training and development programs so that we can live up to our commitment to completely delight and satisfy our guests. Our management culture of empowerment, caring for employees, rewards and incentives and our continuous commitment to learning and development collectively differentiate Mandarin Oriental from our competitors and will remain our focus moving forward.

What’s the strength of your brand or how do you differentiate yourself from other competitors?

What’s the strength of your brand or how do you differentiate yourself from other competitors?

Kan: Well, we started the industry and the whole movement to international service quality and management when we opened our doors 24 years ago. To this date, we are proud to be known as the city’s best managed, most resident friendly property. We want to make sure our residents truly experience “life at your doorstep.” They literally don’t have to leave the complex to take care of their daily needs: on-site preschool, medical and dental facility, bakery, supermarket, dry-cleaning, post-office, even a shoe-repair center.

Lai: In every Shama city and at each Shama location, we adhere to four absolute tenets:

Style — From furniture to fittings, Shama apartments combine hip style with supreme functionality. All materials are selected in-house to ensure comfort, quality and conformity with Shama’s vision.

Service — We believe that an exceptional living experience requires an unrivaled standard of service. To meet these standards, we are committed to hiring and training the most experienced and qualified staff.

Location — Carefully chosen and fully researched, each Shama property is in the heart of that city’s prime commercial and/or residential district.

Lifestyle — We aim to enhance our tenants’ living experience by creating a sense of belonging through the “no boundaries” program, which offers a personal concierge service, access to the city’s leading members-only clubs and fitness centers and a constantly updated selection of retail and dining privileges.

Leung: Our brand positioning is unique and different from other international chains. Each of our residences is unique and blended with local culture. Our residences offer more than a home but also elegance, comfort and privacy. The community, the culture, the design, the ambience, the scent of smell, the sound, the joy, the moments that blend seamlessly together for creating an experience that is beyond hospitality.

Fang: Since entering the China market in the late 1980s, and through a network of offices in the key cities of Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Tianjin, Hangzhou, Dalian, Shenyang, Chongqing, Xiamen, Zhuhai and Qingdao, Savills offers a one-stop shop of comprehensive services to meet all our clients’ real estate needs.

Backed by a 5,000-member strong team in China, and offering the benefits of our diverse, international experience and unparalleled market knowledge, Savills provides a comprehensive range of advisory and professional property services to developers, owners, tenants and investors alike. These include consultancy services, facilities management, space planning, property management, leasing, valuation and sales in all key segments of commercial, residential, retail and hospitality property.

Barthes: We are not a hotel chain but a collection of distinctive luxury hotels and resorts; each of our properties is unique with a strong sense of place, but we are united by the same mission of completely delighting and satisfying our guests.

Our aim is not to be biggest, but the best in the luxury hotel segment in each market in which we operate through a combination of quality, tradition and innovation. There is a uniqueness about us that few other hotel groups can truly claim as our heritage and history began here in the Orient.

How do you perceive the city’s overall serviced residency market? What’s your plan to deal with intensified competition?

How do you perceive the city’s overall serviced residency market? What’s your plan to deal with intensified competition?

Kan: Competition comes not only from the traditional serviced apartment providers, but also from hotels that cater to long-term stays, as well as prestigious non-serviced apartments. We focus on our core competencies of offering the best international service and living environment to our mostly expatriate residents. With the recently completed renovations, we once again offer one of the most premium apartments available.

Lai: Shanghai is a very matured serviced apartment market. There is a very wide choice of serviced apartments in the current market as they are categorized into several tiers, according to its service ranging from those providing very limited housekeeping service to full-service similar to what a hotel provides. And the demand for each tier remains very strong in China.

To deal with intensified competition and to better fulfill the needs of different target market, apart from the existing Shama and Shama Luxe brand tier, recently Shama Lite is launched to offer value-orientated serviced apartments. Whilst the unit size and specifications of Shama Lite are geared to a more mid-market profile, there will be no compromise on Shama’s design concepts, comfort and safety standards.

Besides, Shama will continue to work better toward service excellence. We regularly improve the service standard and upgrade the technology we provide in properties.

Leung: While there is increasing supply in serviced residences in first and second-tier cities across China, demand is also on the upswing in result of continued influx of foreign investments into China that brings in sustainable demand for serviced apartments. For expatriates who have language issues, the advantage of all-inclusive services, fully furnished and hassle-free apartments is significant. At the same time, we have seen an increase in demand from high spending domestic Chinese who are looking for a better quality of life or job relocation within the country.

As in any mature industries, there will be intensified competition and each player will manage their fair share through individual strength and competitive advantages.

Fang: There will be more serviced residences coming into this market, we should set up a high service quality and guest loyalty to build market reputation,

Barthes: The serviced apartment industry shows continual growth as new supply enters the market. With the expected increase in the number of MNC expatriate personnel in Shanghai, we anticipate the occupancy rates and average rents will increase in the mid-term. Mandarin Oriental is fortunate to be able to offer guests a choice between our hotel and serviced apartments depending on the nature of their visit. Moreover, due to our prime location near the Lujiazui business area, residents can enjoy a contemporary lifestyle and home that embraces the peaceful environment of a luxury riverside setting. The residential experience will be distinguished by our legendary Mandarin Oriental service and facilities wherein our residents are treated as permanent guests of the hotel.

How do you expect the market to grow over the coming few years? As one of the major players in the city, do you foresee any challenges for the industry in the near term?

How do you expect the market to grow over the coming few years? As one of the major players in the city, do you foresee any challenges for the industry in the near term?

Kan: The growth in serviced apartment demand has moderated the past few years as international companies become more cautious in deploying expatriate staff in the current economic environment. Housing allowances have stagnated and, in some cases, are even being cut back. While the number of new serviced apartments has also moderated, as mentioned above, the challenges come also from the growing number of alternative residential providers. But so long as we continue to provide the best service and living environment, we remain optimistic with both our near-term and long-term potentials.

Lai: ONYX is very positive regarding demand for quality serviced apartments in China, especially in the first and second-tier cities. This can be observed by increasing foreign direct investment. Increasingly we are seeing demand from the Chinese returning from overseas and those relocating from other cities within China. This market trend is not new but getting very evident in the last few years.

China is a vast market. That means the infrastructure, demand and potential in each city differs. The challenge for Shama is how to stay innovative so as to meet the different needs of different market segments.

Leung: The market will grow and will be correlated to the various growth rate of China’s economic development in the years to come. The foreseeable challenges for serviced apartments are the decrease in housing allowances, for expatriates, the substantial increase in supply across China and competition from non-serviced residential leasing, which can offer larger spaces at lower monthly rents.

Fang: The main challenge is how to find guests and keep them staying with us longer since there are more new serviced residences entering the market and company budgets are decreasing.

Barthes: We believe China is a dynamic market, with many opportunities for future growth. Tourist arrivals have been increasing year on year, and there is also a large number of domestic travelers who are becoming increasingly affluent.

In such a large and diverse market, there is room for everyone to compete. As in all cities where we are represented, Mandarin Oriental positions itself at the luxury end of the market. We usually compete well with our key competitors in the cities in whichwe operate based on our exceptionalproducts and services.