Post-pandemic price-conscious travellers will want a bigger bang for their buck than ever before. Picture: Pixabay.
Post-pandemic price-conscious travellers will want a bigger bang for their buck than ever before. Picture: Pixabay.

How Covid-19 impact could put focus on value-driven tourism products like aparthotels

By Travel reporter Time of article published Apr 8, 2020

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Travel will never be the same after Covid-19. Travellers would want a bigger bang for their buck and experiences that will entice them to book that next trip. 

Wayne Troughton, managing director of HTI Consulting, a development consultant for the hospitality sector across Africa and the Middle East, said there's concern iabout when international travel will resume and under what restrictions.

“As the virus has impacted almost all countries in the world, at different levels and in different timeframes, the question is will markets and countries wait until the threat of the virus has been eliminated? We hope that travel will start before this time in a controlled manner, with a ramp-up to being fully operational to all markets and countries,” he said. 

Troughton said travellers battered by the pandemic, recession or slow economic growth will want either a cheaper price or more value-add. 

 “It’s becoming clear to us that value-driven products, especially in the accommodation sector, like aparthotels or traditional hotels offering far more amenities over and above their core offering for the price of a room, will be better positioned to meet these travellers’ needs.”

He sheds light on aparthotels.

“Aparthotels are full sectional-title apartment blocks that operate as serviced luxury hotels, combining the daily amenities of traditional hotel accommodation with the space, flexibility and self-catering convenience of furnished apartments.”

Figures in late 2019 highlighted that five-star-hotel occupancy, where most aparthotel operators, such as Totalstay, are positioned, had increased by 4% over the previous year, while the average daily rate (ADR, the average realised room rental per day) had grown by 2,6%. The four-star sector’s occupancy, despite new hotel entrants, had also increased, by 1,6% and with a 2,2% increase in ADR.

Troughton believes that South Africans are largely unaware of the attractiveness of the aparthotel option, partly because this kind of accommodation offering has previously been managed on an ad-hoc basis. 

Troughton believes that how Covid-19 has constrained travel spend will present new, exciting opportunities. “For hotel investors, it presents an opportunity for possible conversions into other real-estate assets like aparthotels. The benefit of aparthotels is that they represent a quick, more risk-averse exit strategy than conventional hotels, as they can easily be sold off on a sectional-title basis as micro-apartments or co-living apartments.”

Simon Bridges, developer and MD for Elemental, adds, “As a developer one is exposed to the risk of holding unsold stock, so furnishing unsold units and bringing in an aparthotel operator helped us mitigate this risk by generating rental income. 

We achieved 45 percent of our sectional-title sales target after the development began operating as an aparthotel – it was and is one of our strongest marketing tools.”

 

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