EDITOR’S note:

Shanghai’s serviced residence market has been booming for four years and the trend is likely to continue. International hospitality chains are looking for ways to grab a larger slice of the market in both short-term and extended-stay segments. Several market leaders in serviced residency businesses shared their thoughts on the industry’s prospects.

James T. Costa

General manager of Fraser Suites Top Glory Shanghai

Leo Lee

Associate director of K. Wah (China) Investment Co Ltd

John Wong

Head of China Operations, Lanson Place Hospitality Management Co Ltd

Alan Zhang

Chief operating officer of Residences at Fashion Park

Q1: Can you first give a brief introduction of your property?

Costa: Fraser Suites, Top Glory is one of Shanghai’s luxury serviced apartments located next to the Huangpu River in the heart of Lujiazui. The property consists of 185 well-appointed apartments ranging in size from 211 square meters to our largest three-bedroom apartment of 330sqm. The compound itself is surrounded by a large green area with plenty of paths to walk along and relax away from the busy city. Fraser Suites also boasts an indoor and outdoor pool, large fitness area, children’s play area and an all-day dining area which serves a nice complimentary daily breakfast to all residents. The property provides 24-hour security and our multi-lingual reception team is always there to assist residents every way.

Lee: Stanford Residences Jing An is the first, five-star luxury serviced apartment residency of the Stanford Residences brand. It is managed by Stanford (Shanghai) Hotel Management which is owned by the K. Wah Group. The project is located in Jing’an central business district, and the whole Jing’an Temple and Nanjing Road W. can been seen from the high-rise. With 113 sets of luxury apartments available, Stanford Residences Jing An offers a wide variety of spacious apartment layouts including three bedrooms, three bedrooms and one study room, duplex and penthouse units, to meet the different needs of occupants. It is designed by the world leading architect Philip Liao and Montaigne Design, and embodies the art of structure and space to fully meet different family needs. A special team from Stanford Hotels manages the property to ensure perfection.

Wong: Upper Riverside is a newly opened residential building in CBD of Pudong, overlooking the Huangpu River. The property is located just five minutes away from central Lujiazui district and seven to eight minutes’ walking distance to Metro Line 4 (Tangqiao Station). With four Metro lines, tunnels and bridges it brings Pudong and Puxi within easy reach. Equipped with international design and facilities, Upper Riverside demonstrates a touch of prestige and indulgence, while setting a new benchmark for leasing serviced residences in Shanghai. Upper Riverside is also Shanghai’s first-ever residence offering the renowned “Lanson Place Lifestyle Services” which is a value-added hospitality service for residents.

Zhang: The Residences at Fashion Park takes great pride in providing its guests with a standard of service and hospitality throughout Shanghai today. All suits have ergonomic furniture, high-end German kitchen appliances and bathroom equipment, water purification and soften system, energy saving system, VRV individual air-conditioning system, fresh air supply system, floor heating system as well as Yale electronic lock system. The excellent reception and business center as well as well-equipped gym are at available for residents.

Q2: Anything you have done recently to improve guest satisfaction at your property or do you have any plans for that in the short- to medium-term?

Costa: We are currently working on plans to upgrade furniture in all the apartments. We are also looking at ways in which to make the apartments more appealing to Millennials, which will make up the largest segment of the market within the next five years.

Plans also include to add more vibrant color schemes in living areas, upgrade appliances in the kitchens and improve use of technology to create conveniences similar to those in smart houses.

Being able to use your smartphone or tablet to control things like the TV, lighting, heating and air-conditioning is no longer a luxury. They are expected. We need to keep up with the changes in technology to remain competitive in the new markets and we are taking every step to ensure we meet the changing demands of our guests and residents.

Lee: As the operator of serviced apartments, we’d all like to think of ourselves as providers of great customer service. Expatriate families are our main customers at Stanford Residences, and we constantly update our services and hold events to increase their homely feel.

In October, we co-organized the “Kids Day Out” event to help the parents have a great time with their children. A series of event to further improve guest satisfaction will be held next. The purpose of Stanford Residences is “connect to Shanghai, connect to lives.”

Wong: With the prestigious “Lanson Place Lifestyle Services,” Upper Riverside pledges to be the residents’ butler, event planner and personal assistant, ensuring extra care, comfort and convenience to the residents. Lanson Place Lifestyle Services ensures a lifestyle of ease and an impeccable residential experience.

The property is working with technology companies to enhance residents experience and facilitate their stay, by installing mobile apps, online request forms and online guest questionnaires, making our seamless service even more available at anytime.

The service team is well-trained in food and beverage, telephone etiquette and essential customer service technique to maintain high level of service quality.

Zhang: To improve the guest satisfaction we have established the ranking system to focus on the service standard and update the executive lounge.

Q3: What’s the strength of your brand or how do you differentiate yourself from other international counterparts?

Costa: With 129 properties in 77 cities in 24 countries, Fraser’s global footprint is as one of the largest serviced residence providers. It means we provide our “Gold Standard” service to our current and future guests than most of the competitors. We focus on developing our teams and continually improving the product. We believe that our commitment to training our teams and anticipating the needs of our guests will result in making timely changes to exceed these needs that will differentiate us from our competitors in the future.

Lee: First, Stanford Residences offers a luxury real estate management service and is located in the Grant Summit, which is a top luxury residence in Jing’an District with a superior residential environment and complete subsidiary facilities. We invited renowned landscaping specialist Aoya to design our green, parent-and-child space. To fit the four season’s idea, we created four theme gardens which feature 60 different varieties of trees presenting different views during different seasons. We focus primarily on the needs of the family. Our layout is best suited for family life.

Wong: The property is located in a prime location of the Pudong New Area, offering panoramic river view of the Huangpu River and with easy connection between Pudong and Puxi. Not many residences in Shanghai offer similar strategic location.

The launch of Lanson Place Lifestyle Services in Upper Riverside even brings in additional privileges. Lanson Place as a leading serviced residences management company in Asia Pacific, has over five years of expat living management experience in Shanghai. With a total of five Lanson Place properties in both Pudong and Puxi and with two more openings in the first half of 2016, Lanson Place definitely excels in residents and expat living. It is able to bring their profound knowledge for a seamless living in Upper Riverside.

Zhang: The Residences at the Fashion Park service apartment is a project under FengBai Group. In our continued quest for high quality standard, the management always communicates with guests for facilities and services.

It places a great deal of emphasis on excellence in service. We hope our guests will enjoy the famous butler service.

Q4: How do you perceive the city’s overall serviced residency market? How do you plan to deal with intensified competition as more players are vying for a share in the lucrative market? As one of the major players in the city, do you foresee any challenges for the industry in the near term?

Costa: When I arrived in Shanghai in 2011, the market could still be characterized largely as a “long-stay” market, meaning expatriates looking for accommodation for six months or longer. Since then, the market has evolved to a more “mid-term” or “project based” market with more and more length of stays ranging between two to six months. We have also seen a growing number of domestic clients renting serviced residence accommodations, which was not the case four years ago.

So, we can say that we are seeing fundamental changes in the duration of stay over the last four years.

Major brands such as Marriott, Hyatt and Wyndham have plans to introduce more “extended stay” accommodations targeting this “mid-term” and “project based” segment. Since Fraser’s has been offering serviced residence accommodation for a long time, we feel we are better prepared to meet both the existing and changing market demands. But we feel we have adapted well and have successfully focused on the key elements of the new markets. This along with the fact that Fraser Hospitality is known as a world leader in serviced apartment providers will mean that we remain very competitive.

As for challenges, the first is simple, over-development.

With many of the major brands coming into the market with “extended stay” accommodations, the danger is that there will simply be too many serviced apartments which in turn, will adversely affect occupancies and prices. Consumers may benefit from lower prices, but it is never too long before the lower prices are followed by reduced services.

Next, the “shared economy” type accommodations offered by services such as Airbnb. There are really two reasons for the huge success of services such as Airbnb. First, because they are offering many of the same services that are attractive to potential guests at serviced residences, and they are an attractive alternative to those on a budget. Secondly, they offer many different interior design styles which appeal to individual tastes.

Lee: Serviced apartments began to appear in international business cities which opened early after China’s reform and opening up policy. The essence of many apartment hotels is a decorated small apartment with a high-end property service, but their services fall far short of expectations.

The development of serviced apartments depends on the city’s position, business requirements, demand for investment and so on. As China’s economy enters a more advanced period, it’s becoming more and more obvious that Shanghai has become an international city, thus the market of serviced apartments shows a very stable trend.

Competition is inevitable. Facing intensified competition, we need to capitalize on our own advantages: We provide a targeted service to expatriate families. The inevitable challenges for the serviced apartment industry in the near term is more and more big hotel brands coming into this industry. In the period of China’s economic transformation, the market demand of serviced apartments has remained stable at the top. Stanford Residences is facing competition from the big hotel brands and the smaller independent operators across the globe. Big hotel brands’ experience, brand awareness, especially their booking channels will no doubt intensify market competition. The solution for Stanford Residences to the challenge is exploiting the leisure market and upgrading itself.

Wong: Shanghai’s serviced residences market has been booming for the past four years and is expected to grow in a stable manner for at least four to five years. Growth will be in various aspects including different luxury levels, varying clientele bases and even attracting leisure travellers.

To combat competition in the future, we would continue to do what Lanson Place is good at, which is the long-stay market, offering exclusive home to senior executives. However besides our top “Serviced Residences” model, we would also expand our “Serviced Suites by Lanson Place” model to capture the 20,000 yuan (US$3,153) to 40,000 yuan market segment. There will be challenges with the ever-increasing salary expenses, staff turnover, demands for technology upgrade and high real estate cost. However, with the opening of Shanghai Disney Resort, China (Shanghai) Pilot Free Trade Zone and other big projects in Shanghai, there will be huge opportunities to grow in the next five years.

Zhang: We focus on senior white-collar workers from foreign enterprises. As you know there are lots of people living in Huacao international community, they are our potential guests. To provide quality service in the apartments and create comfortable environment for the guests is our motto.