Mak Hoe Kit, Managing Director, Ascott Global Serviced Residence Fund & Head, Business Development, The Ascott Limited
- How has The Ascott Limited (Ascott) fared during COVID-19? How are Ascott’s properties performing?
- What makes the extended stay products so strong at the moment and whether expansion has been accelerated as a result of the pandemic?
The Ascott Limited (Ascott) remains resilient amid COVID-19, supported by a strong base of long-stay guests who appreciate the comfort, privacy and security of our spacious apartments where they can live and work. At our serviced residences, the separate living, working and dining areas offer ample space for guests to unwind, exercise, work or have their meals within the apartment. Guests can also make use of the fully equipped kitchen and refrigerator within the apartment if they do not want to order meal delivery. With high-speed Wi-Fi, guests can stay in touch with their loved ones or attend and host online meetings with their colleagues. Our serviced residences offer our guests flexibility in the lease period depending on their different lengths of stay, from daily to monthly, six months or more.
Guests can also be assured of a safe home away from home with our ‘Ascott Cares’ commitment to deliver stringent hygiene and cleanliness measures. ‘Ascott Cares’ covers nine commitments to enhance Ascott’s existing cleanliness protocols including providing a safe working environment for our staff. Ascott has also partnered with Bureau Veritas to provide independent audits of the hygiene and safety standards of our properties.
Despite the challenges of COVID-19, we have achieved record high signings of more than 5,600 units in China to date this year, which represented a 60% year-on-year growth in units in China, while our apartment revenue of operating properties in the country reached close to 95% of pre-COVID-19 levels. Globally, we have signed more than 9,300 units in 48 properties worldwide in 2020. This demonstrates that our partners recognise the resilience of our lodging products and the value Ascott brings.
The strong demand from our corporate and long-stay guests has enabled Ascott’s serviced residences across our key geographies to maintain robust performance. For instance, Revenue Per Available Unit (RevPAU) of our properties in Asia Pacific and Europe were 28% and 10% respectively, higher than similar class hotels and serviced residences from April to September 2020. In the same period, the RevPAU of Ascott’s properties were also 75% higher in United Arab Emirates, about 50% higher in Philippines and 40% higher in Germany.
- How does Ascott stand out among the many lodging franchisee options available?
Many owners and operators increasingly recognise the resilience of extended stay products. We have been operating this model for over 30 years. As one of the leading international lodging owner-operators, our extensive operational expertise has gained recognition worldwide and we understand owners’ mindsets. We have designed our franchise programme by leveraging our experience in the lodging industry and proven track record. We are seeing growing interest from investors and owners towards our franchise model and our serviced apartments.
Ascott offers a comprehensive franchise training programme where we share international best practices with franchisees. We also offer distinct technical and property pre-opening support packages to ensure operational efficiencies.
A franchise champion will also be appointed to support each franchisee, offering our knowledge of the city and country in which they would like to operate in. This franchise champion will also monitor and analyse the performance of the franchise properties and recommend ways to improve financial and operational performance.
- What are the Ascott’s brands for franchise? What factors do you consider when franchising your brands?
Ascott’s brands for franchise include Citadines Apart’hotel, Citadines Connect, Somerset Serviced Residence, and Quest Apartment Hotels.
When assessing whether to franchise a property and under which brands, we consider factors such as the location and potential demand as each of our brands cater to different segments of customers. We have experience working on both greenfield and brownfield sites. Our products and technical services team has significant experience with transforming existing properties into award-winning serviced residences.
We spend a lot of time and effort to identify and reach out to new franchise partners, including white-label operators, developers and owners, so as to build an ecosystem of like-minded partners, which is the foundation of our franchise business. One of our objectives is to build a long-term relationship with our franchise partners and develop our partnership from one project to multiple projects.
- What is Ascott’s franchise model?
Franchisees on board Ascott’s franchise programme will be able to leverage our strong brands, global reach and distribution channels, and comprehensive support services. We are able to tailor our solutions to address franchisees’ requirements and ensure a win-win outcome for Ascott and our franchise partners. For instance, we provide technical advice for each franchise property in areas such as space planning, configuration, fixtures, furniture and equipment solutions to optimise development costs for the owners while keeping our brands locally relevant.
In addition to our standard franchise model, ‘Manachise’ is an increasingly popular hybrid solution that combines the best of a management contract and franchise for owners who want to grow their operational skillsets. Ascott is able to operate the property on the owners’ behalf for the first few years while the owners prepare their teams to eventually take over the operations.
Ascott also offers a ‘dual-brand’ franchise model for owners who want to franchise more than one of our brands to diversify their revenue stream. For instance, owners are able to franchise our two brands – Citadines Apart’hotel and Citadines Connect – as part of their dual-brand projects to combine serviced residence and hotel offerings to attract guests on both long and short stay. The operational synergies from the shared facilities and manpower will also enable the owners to enhance returns.
- Which markets do you see potential for Ascott’s franchise business and why these markets?
Franchise will be one of Ascott’s growth drivers along with expanding through investment, management contracts and strategic alliances.
With over 30 years of experience in owning and operating properties across the world, Ascott has a strong presence, deep market knowledge, and capabilities to support our franchise partners. Our franchise partners can enjoy Ascott’s proven business concept; established brand equity; on-going product and service innovation; access to members of Ascott’s loyalty programme, Ascott Star Rewards; as well as reliable operating policies and procedures. We also provide franchise partners with technical and property pre-opening support.
Serviced residences have gained more interest from investors and franchisees due to its resilient and highly efficient business model. We see opportunities to expand our footprint in developed markets across Europe, Asia Pacific, Middle East and Africa. Europe is one of our key growth markets due to the maturity of the market and the popularity of franchising as a preferred mode of development and growth throughout the continent. We see potential for franchise in key gateway cities in France, Germany and the United Kingdom. We are also open to franchise opportunities in both North and South America. North America being the world’s largest hospitality market holds a lot of potential for us to expand our offerings, customers and members in this market.
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ABOUT SOME OF ASCOTT’S BRANDS
Citadines Apart’hotel Citadines Apart’hotel is our fastest-growing brand globally. Citadines Apart’hotel offers the flexibility and practicality of a serviced apartment with the services of a hotel. Guests can look forward to a blend of locally influenced experiences through the cultural and lifestyle offerings in the surrounding neighbourhood. Our current franchise properties for Citadines are mainly in Europe, Philippines and the United Arab Emirates.
Citadines Connect Strategically located in global cities, Citadines Connect revitalises the urban hotel experience and provides the essentials required by modern travellers for their business and leisure needs. We currently have franchise agreements for Citadines Connect branded properties to be opened in Philippines, France and Singapore.
Somerset Serviced Residence Centred around the collective interests of integrating personal and social lifestyles, Somerset Serviced Residence is catered specially for guests travelling in a small group or as a couple. Whether it is for business or leisure, Somerset allows guests to settle in quickly and find their place in the new city while creating a balanced environment. We have a franchise property for Somerset in South Korea and are looking to expand our Somerset franchise further globally.
Quest Apartment Hotels Quest Apartment Hotels are located in central business districts, suburban and regional areas with close proximity to head offices, business centres and key tourist destinations. It is one of the largest networks of franchised apartment hotels with over 170 properties across Australia, Fiji, New Zealand, and the United Kingdom. |