Is distribution the weak link in the procurement chain for apartments?

Historically, a lack of visibility has been the apartments sector's Achilles heel.

Buyers want to be able to book apartments online, whilst TMCs and HBAs still rely heavily on the airline-dominated Global Distribution Systems (GDS) for their content. Neither is there a clearly defined area within the GDS for users to find the apartments listed.

The Apartment Service's Global Survey indicates that in Europe, travel management companies are the intermediary of choice for most corporate buyers, handling just under half of their apartment bookings, with relocation agents the second most popular with 26%. The survey also reveals that 37% find the lack of availability an obstacle to booking serviced apartments.

Yet despite a surge of interest in serviced apartments amongst the business travel community, the survey reveals that two thirds of serviced apartments globally are still not available on GDS. Little surprise then, that 85% of the TMC's in the survey book directly with the apartment provider or with specialist one-stop agents such as Execustay or BridgeStreet in the USA, and The Apartment Service in Europe.

Increasingly, web portals are being used to access serviced apartment inventory. System integration with travel managers' self booking tools therefore needs to be a growing aspect and strategy of the sector's visibility and distribution channels in future.

Half of global inventory not online

Half of the apartment operators who participated in the survey also reported that they have not made their inventories available on line, preferring to quote on each enquiry separately rather than risk losing the business by quoting a rate that might be undercut by others. For many, it seems, the web is purely an information, rather than selling tool although this is gradually changing.

The problem of providing serviced apartment availability varies between extended stay (5-30 nights) or corporate housing (30 days +) - see the chapter 'What is a serviced apartment'.

Extended stay fits more easily into the established GDS/online availability booking models due to the length of stay and because the operator is more likely to be part of a hotel chain such as Marriott (Residence Inn), Hyatt (Summerfield Suites), Hilton (Homewood Suites) and InterContinental (Staybridge) who already use GDS for their online transient hotel bookings.

Corporate housing does not look to this method of distribution because bookings are typically open ended. As most stays average between 30 and 90 nights, reservations are confirmed much nearer to the arrival date - on average 17 days in advance according to The Apartment Service survey.

This causes further problems for bookers because the terms & conditions do not fit easily into the GDS automated booking process. 16% of respondees to the Apartment Service survey cited this as a significant problem encountered when booking apartments.