A quick search for Thailand Serviced Apartments’ on Google returns about 1.5 million hits, an impressive number no matter how you cut it. For many expats freshly-arrived to the Land of smiles, the idea of a serviced apartment may be a bit confusing, with some new residents wondering just what advantages a serviced apartment has over a traditional hotel, or a regular apartment with a maid. “Serviced apartments generally offer more space and include fully-fitted kitchens and living rooms,” said Dan Tantisunthorn, Head of Research for Jones Lang LaSalle Thailand. “More over, daily room rates for serviced apartments are typically lower than those for hotels, while serviced apartment also offer weekly and monthly rate.”
It may be easy to imagine that the past year has been hard for serviced apartments, as political uncertainty and a flagging economy have dampened certain economic outlooks and have had a small but noticeable effect on Thailand’s vital tourist industry.
However, according to Jones Lang LaSalle research, the decline was limited to some extent by a growing number of tenants who chose serviced apartments over hotel accommodation. This is in addition to the fact troubles appeared to have only a negligible effect on the number of corporate clients who are in Thailand for long-term business.
It used to be that serviced apartment catered mainly to high-fly executives, but they’ve adapted to the more cosmopolitan crowd that makes up the expat community nowadays. Recent research shows that most tenants are still single expats who are in Land of Smiles for short- to medium-length stays. However, the numbers also reported a glowing demand for serviced apartments from tourists who are only looking to rent a place for a few nights.
“Previously, the majority of serviced apartment tenants were comprised of employees of multinational organizations on longer term assignments in Bangkok,” said Tantisunthorn. “But with serviced apartments that receive hotel licenses being able to offer daily rates, these properties are now becoming increasingly popular with tourists.” Most who applied received licenses without any problems, but several have encountered holdups, as certain specifications have to be met, such as fire safety, waste water treatment, ample parking and the like. However, the large majority of clients are still employees of large organizations.
Alan Carino came to Thailand for six months to work in The Bangkok Reuters office., which put him up in a serviced apartment on Silom Road. “There was a maid service Three times a week, and the gym, pool and tennis courts were really nice,” he said. “There was a full kitchen, although I preferred to go out in to the city for meal, and the staff was very nice. It was a pleasant experience.”
As Asia’s importance to world business continues to grow, and travel hubs such as the new Suvarnabhumi airport expand to meet increasing numbers of travelers, Bangkok can offer services just as slick as those in Hong Kong, Singapore and other major destinations. Says Tantisunthorn: “The comparison of serviced apartments in Bangkok to similar-styled services in other cities generally depends on the individual property. However, for those which are managed by international operators, like Fraser, Ascott or Oakwood, the properties and services should be standard in keeping with the branding they represent regardless of the country.”
However, when yours huge multinational employer is paying the (often overpriced) rent, it’s all well and good. But if the service apartment sector wants to attract a more diverse crowd – as the data suggests – they need to keep the prices in check. According to research from Jones Lang LaSalle, “asking rental rates are expected to rise gradually at marginal rates on the back of healthy demand. Nevertheless, bigger discount rates remain very likely especially for long staying guests as the new supply entering the market over the next two years will spur higher competition”.
That’s good news for those who are footing for the bill themselves. Says Carino: “Being frugally minded, I could have found local Thai accommodations with less services and facilities at a fraction of the price. If Reuters weren’t paying for it, I probably would have moved out after the first month.”
At any rate, developers in the Big Mango see the market growing over the next several years.
There are over 1,500 units set for completion in both 2007 and 2008, and the reduced-but-still-planned MRT and BTS extensions will open up more opportunities for the complexes as the city continues to develop.