Extended-Stay Properties Home To Global Nomads

<B>Extended-Stay Properties Home To Global Nomads</B>

By Bruce Serlen

As companies become more global, travel buyers are dealing with an increase in the number of travelers sent to international locations on long-term assignments. Accordingly, the ranks of a new class of business traveler, dubbed the "global nomad," has grown--and with it a new focus on extended-stay and interim housing options in often far-flung international destinations.

Unlike the United States, where many extended-stay alternatives are midprice, the market outside the United States tends to be more upscale--and even deluxe--with a number of luxury hotel chains entering the sector. Costs may be high. But typically the price is paying for location and a high degree of personal service, two factors on which employees on long-term assignments place a premium.

"The needs of these travelers are quite distinct from the needs of traditional travelers," said Chris Riga, senior vice president of sales and marketing at Swiss&ocirc;tel. "After all, these are guests whose typical length of stay ranges from one month to as long as two years. The difference is that at some point they begin 'living' in the new destination--with all the complications that implies--as opposed to simply visiting."

The work assignment itself can vary. "Many guests are on consulting projects or training programs, while others are helping to set up a local operation for their company," said Riga. In the past year, for example, many IT employees were sent on Y2K-related assignments that may have lasted a number of months.

"For those setting up a branch of their companies, their job often is to recruit and train their successor who is a local national," Riga said. "So they know from the onset that the assignment is finite, which is why they only need accommodations that are temporary. In the process, they're helping transfer the company's corporate culture to the new location."

To satisfy this market, Swiss&ocirc;tel has established extended-stay residences in many of the international destinations where it operates deluxe hotels. Locations include China (in Beijing and Dalian); Brussels, Belgium; Quito, Ecuador; Seoul, South Korea; and Istanbul, Turkey. A second location in Turkey (in Gocek) currently is under construction.

"The reason we only operate long-term residences in cities where we have hotels is that guests at the residences are welcome to take advantage of many of the hotel services, whether it be the health club, restaurants or room service," said Riga. Yet the residences are not actually part of the hotel building. Rather, the fully furnished apartments are in self-contained buildings that either adjoin the hotel or are directly across the street from it.

"Being able to access hotel services can make their stay in the location much more pleasant and enjoyable--certainly while they're getting acclimated," said Riga. "And, consequently, it can help make the business assignment a success. Because if people are happy in their living arrangements, they're more likely to do a better job."

Depending on the particular circumstances, travel buyers placing these employees may opt to choose properties whose chains are already on the preferred list. This way, they can leverage the additional bookings when sitting down to negotiate. Or they may go outside their established preferred list, say, in the case of an interim housing provider, because of certain locations and volume considerations. In effect, they'll be broadening the list in those markets.

Indeed, unlike short-term stays, where a traveler may be in and out of a hotel in a single day, long-term assignments require accommodations that are a special balance of location and comfortable living conditions.

In the new model for long-term travel, an employee will be sent to one frequently remote international location and, at the end of that project, be sent somewhere else in the world, also for a limited time.

"So rather than one assignment, the employee is signing on for a series of assignments all over the world," said Tim Sheldon, senior vice president for extended-stay lodging at Marriott International. "As a result, many of these employees no longer maintain a home address, either in the United States or elsewhere, which is why people have begun referring to them as global nomads."

Intent on covering every price point in the corporate travel universe--and seeing a growing opportunity here--Marriott has introduced Marriott Executive Apartments.

Last month, the company opened its third such facility in Prague. In addition to the apartments, Marriott's presence in different aspects of the extended-stay sector includes Residence Inn, TownePlace Suites and ExecuStay.

Along with Prague, Marriott operates apartment facilities in Budapest, Hungary, and Hong Kong. A fourth project is under construction in Mombay, India. The average number of units in each project is 125. "Marriott has full-service hotels in each of these markets, but the apartment projects don't exist directly in relation to them," said Sheldon. "Rather, they're residential in feel. People just seem to like having a name on the door they recognize and trust. Hotel services are available, however, if the guest prefers."

The guest register at these facilities is truly international. "Because many multinational companies are based in the United States, there's a perception that extended-stay guests tend to be American," said Marriott's Sheldon. "But for these companies today, people from all different cultures and parts of the world are being recruited for these assignments. Consequently, living in one of these facilities can be a really global experience."

While Marriott's ExecuStay brand is strictly in the United States right now, president and CEO Gary Abrahams expects to expand to Canada and Europe by the end of 1Q01.

"There's a tremendous demand for the kind of interim housing facility that we provide outside the U.S. market right now," Abrahams said. "Within five years, we expect ExecuStay to be well represented internationally."

While ExecuStay facilities have no connection to an existing hotel, Abrahams said they do try to provide guests with a full range of services. "What guests seem to be looking for above all is a home away from home," he said. "Because they're full-service apartments, many of the units have room for guests to entertain, which helps them start to build a sense of belonging in the new community." Marriott acquired ExecuStay in March 1999.

In Singapore, Shangri-La Hotels operates two separate long-term facilities in addition to its full-service hotel. The Shangri-La Residences are intended for guests staying for a period of one to two years, while the Shangri-La Apartments are for stays ranging between one month and one year.

"A special feature of the 55 residences is their spaciousness, which runs up to 3,000 square feet," said Dexter Chia, who is the director of sales and marketing for the Shangri-La Hotel. "Western business travelers, in particular, are used to larger living spaces than would be typical in Asian dwellings. Accordingly, they tend to feel more at home in the residences, which helps their overall adjustment."

<B>Meet and Greet</B>

As with the Swiss&ocirc;tel residences, guest access to hotel services is a major appeal. "The hotel general manager will host regular receptions, for example, giving guests the opportunity to meet each other," said Chia. Unlike short-term guests, those living in the residences and apartments tend to be more interested in meeting other residents who, in effect, become their neighbors.

The Shangri-La Hotel also offers complimentary shuttle service to points of interest, both business and leisure, around Singapore. Because they're putting down roots in the community, long-term guests tend to make more extensive use of the shuttle service to help them get oriented, said Chia. He added that the residences are fully booked until the end of 2001.

While Europe and Asia have seen the majority of upscale extended-stay and interim housing development, reflecting the way companies are expanding internationally, South America also is experiencing activity, if on a more modest scale. In addition to the Swiss&ocirc;tel residence in Quito, Ecuador, for example, Sol Melia Hotels operates long-term apartments as part of the Gran Melia Hotel & Conference Center in Caracas, Venezuela.

In this case, the two apartment towers, housing 236 units, are part of the larger 472-room hotel complex. "We don't really think of ourselves as being in the apartment business, but we want to be responsive to the needs of travel buyers, who are telling us the need for this kind of accommodation is expanding rapidly," said Geisel Power, sales manager.

In an effort to provide flexibility, the Caracas apartments come in a variety of sizes and configurations, some of which include studio spaces. "Typically, the studios are used by guests as an office," said Power. "Particularly where they're setting up operations in the local market and so have no established office to work from, having access to the studio/office is both a convenience and a time saver."

In the same way, the apartments' full-furnished kitchen is an option. "Some guests may want to cook for themselves, while others want to take their meals in the hotel restaurants," she said. "This way, they have a choice."

The opportunity to provide long-term guests with an office space to work from also was the driver behind the marketing alliance recently launched between veteran interim housing provider Oakwood Corporate Housing and Regus Business Centres. Starting last month, long-term travelers staying at the Oakwood Residence in the Akasaka district of Tokyo were encouraged to use the secretarial and other business services provided by the Regus Business Centre in nearby Kamiyacho Mori. In fact, a shuttle bus was made available to ferry Oakwood guests back and forth.

As with the Shangri-La facilities in Singapore, Oakwood has taken Western preferences into account when opening facilities in Japan, the Philippines and elsewhere in Asia.

"Not only are our serviced apartments in the region more spacious than is the norm locally, but the choice of furniture is different, Westerners preferring bigger, more substantial pieces," said James Klein, president. "In addition, we make sure our serviced apartments are located in middle-class, affluent neighborhoods where Westerners would want to live." As an example, Klein cites the Oakwood facility that opened in the central Makati district of Manila, the Philippines, late last year.

"The building is attached to an upscale shopping mall and is within walking distance of restaurants and other amenities," he said. "Guest services include daily maid service and extensive security."

While many global nomads are young--say, in their mid-30s--and single, others are married and occasionally have young children. "Consequently, we try to locate Oakwood facilities as close as possible to the preschools and elementary schools parents would want to send their children to," Klein said.

At the other end of the age spectrum, however, an increasing number of employees on long-term assignments are older workers. With their children grown, they are free to accept this kind of position. Klein also is seeing an increase in the number of single businesswomen among the nomads. "Accordingly, we're adding a softer look into the apartments' d&eacute;cor and adding other touches that work for the female traveler," he said.

Oakwood's connection with Regus seemed the logical next step in meeting long-term travelers' needs, said Klein. After questions of housing are settled, the next major hurdle for people on long-term assignment tends to be setting up an office, so they quickly can get to work.

"Conducting business globally becomes considerably easier when a company can instantly move people into class A office space," said Robert Gaudreau, Regus' head of operations. "This is space that includes secretarial support, computer support with Internet access and conference rooms--features that go beyond the usual hotel business center."

For Klein and Gaudreau, the alliance presents travel buyers with a kind of "one-stop shop." Down the road, there's the possibility of a Regus Business Centre being incorporated into new Oakwood facilities.

In years past, extended-stay guests tended to be expatriates, who would go from the hotel to a permanent residence in the local community. Today, this is no longer necessarily the case. Instead, the hotel or serviced apartment becomes the guests' residences for the duration of the project.

"As a result, the temporary accommodations have to be satisfying and complete in themselves. They're no longer simply a transition," said David Crowl, vice president of sales and marketing for Europe, the Middle East and Africa for Four Seasons Hotels and Resorts.

The challenge for a hotel is to customize the environment to fit this long-term guest's needs. "As part of Four Seasons' 'Call Us Home' program," Crowl said, "we sit down with the traveler and look at every aspect of the visit: What location room would suit you best? Do you need more business equipment brought in? What about exercise equipment?"

These guests aren't restricted to room service menus, which often are geared to late arrivals. "Do you need meals customized to your special tastes? Do you have health-related dietary concerns we should know about? The chef will even want to know what kinds of foods travelers like," said Crowl. "These are the kinds of questions you ask when you're trying to provide a high level of personal service."

Even the nature of the maid service gets examined. "Transient guests tend to be out of the room more, keeping business appointments or seeing the local sights," Crowl said. "Long-term guests, on the other hand, are in the room more, whether working or just relaxing. Consequently, you want to adapt the maid service, so the guest doesn't have too many interruptions." Travelers staying 14 days or longer qualify for the Call Us Home program's amenities.

"If we know the guest's preferences in advance--regarding work, for example--we can bring in a special desk and lighting in addition to the computer hook-ups and fax machine already in place. That way," said Crowl, "everything will be operational when the guest checks in, which helps minimize the transition."

<B>Culture 101</B>

Guests on long-term assignment often need as much basic information as they can find to help them get oriented. "We provide a special welcome pack for these guests that includes more economic data and directories than usual," said Michael Shepherd, general manager of The Savoy Hotel in London.

Especially when travelers are from outside Europe or North America, they frequently can use assistance on how business is conducted in the United Kingdom. "They'll have questions like what business hours are, what the proper etiquette is for making business appointments and so on," he said. Needs are particularly pronounced when language is an issue.

Ground transportation is another area where The Savoy tries to provide value. "Long-term guests requiring chauffeured cars are assigned the same driver for the length of their stay, which provides continuity," said Shepherd. "These guests tend to be quite senior level and the driver comes to know their preferences and routines."

In addition, a number of these long-term business travelers are repeat visitors, some spending eight to 12 weeks at the property year after year. "Whenever we can, we try to have the same driver assigned to the guest for each visit, so that sense of continuity is even greater," he said.

For these repeat guests, the property's guest history database becomes especially helpful. Among other details, the system records any preferences a guest may have for particular pieces of furniture.

"We'll customize the furnishings in a guest's room for a long-term stay, storing special items for them until they return," he said.

Central to providing many of these services is the role played by the hotel concierge. "While the short-term guest may look to the concierge to book a restaurant or secure theater tickets, that all changes for the long-term guest," said Swiss&ocirc;tel's Riga.

"The concierge functions more as a guide or counselor in these situations, helping with the guest's overall adjustment to the community," said Oakwood's Klein, noting that in Asia, Oakwood's serviced apartment buildings are staffed with concierges.

"The guest may need to set up a bank account or find a dentist or apply for a driver's license--needs that the short-term guest rarely encounters," said Four Seasons' Crowl. "Concierges tend to be tremendous resources for this kind of assistance. So it makes sense that the long-term guest would want to access this expertise."

Experts in international employee relations note that after about a month, the long-term guest undergoes something of a change. "People in this position find themselves starting to long for a network in the local community," said Michael Cadden, vice president of sales and marketing for Craighead.com, which works with global companies on easing executives' adjustment to different cultures.

"You reach a point where you're no longer just a visitor. It's something travel managers and international human resources managers need to be cognizant of," said Cadden. "After all, resident skills differ markedly from traveler skills, especially when the visitor is coming from a very different culture."

Studies show that when they first arrive, employees on long-term assignment tend to work all the time. "They tend to have no other demands on their time," Cadden said. "But that eventually changes and guests need to get acclimated into the new community, if they're ultimately to succeed."

For the first three months, there will be a sense of excitement and novelty. "The next three months, however, tend to be marked by a kind of loneliness and even depression that can include some resentment with the culture the person finds him or herself in," said Cadden. "But then people tend to bounce back in the next few months. All in all, it can take the better part of a year to fully adjust to living in a new culture."

Much of the increase in the number of employees being sent on long-term assignments, Cadden said, has to do with companies' changing attitude toward expatriates.

Traditionally, expatriates were sent to international destinations where they established more-or-less permanent homes. Cadden defined "permanent" as two years or longer and, in some cases, up to the employee's retirement.

"Many companies have found that the cost of expatriating employees simply is too great when you add in all the related costs," he said. "What's more, companies are feeling pressure politically from the local country not to send people as full-blown expatriates."

On top of that, the task of repatriating these employees after years spent abroad can be strewn with minefields. "All too often, expatriates don't have the skill set, particularly regarding the new technology, that companies need to transfer to the local market," Cadden said. "Not surprisingly, these are exactly the skills many of the global nomads possess in abundance.