Serviced apartments in Australia: Alternative to hotels become hot holiday accommodation

When is a hotel not a hotel? When, perhaps, it's a block of serviced apartments …

TripAdvisor has sent shockwaves through the hospitality industry by featuring no fewer than three sets of serviced apartments in its 2021 list of Australia's top 10 best hotels.

Their entry into the hallowed halls marks a new dawn for the once-humble serviced apartment, now jostling for position with gold-plated rivals like Melbourne's Treasury on Collins, Sydney's Ovolo Woolloomooloo and the Beach Club on Hamilton Island.

"But we've seen a massive increase in their numbers over the last five to six years, and they've now carved out a good proportion of the travel market," said Dean Long, CEO of the Accommodation Association.

"In the post-COVID-19 world particularly, value is incredibly important to the consumer. So serviced apartments are becoming more and more prevalent for families who want more individual spaces and kitchenettes so they don't have to eat out every day, and laundries, while the business traveller also wants more of a home experience while they're away."

The three to hit the heights are, in top spot, Element on Coolum Beach, an apartment complex on the Sunshine Coast; Quest Sale Serviced Apartments in Victoria's Gippsland region in fifth place; and Quest Ipswich Serviced Apartments in Queensland at number nine. TripAdvisor determines the rankings using an algorithm that analyses traveller reviews for properties with a star rating of four or above, with 30 or more rooms and a minimum standard rate of $75. 

"To be honest, I nearly fell off my chair in surprise when they were announced," said managing director of Quest Hotels David Mansfield. "But it was a pleasant surprise."

He says that during COVID "people recognise the value in the market" when they visit regional areas. "They also want bigger spaces – our rooms are 50-60 square metres compared to the average hotel room size of 33-35 – and balconies and windows that open, kitchens and laundries."

The accommodation sector has been quick to jump on the trend with a flurry of new openings that contain elements of serviced apartments, with an overlay of luxury and cutting-edge design usually only found in boutique hotels.

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The Sebel Melbourne Ringwood is one of the newest entrants into the market. It's a hotel offering serviced apartments with living and dining areas and a kitchenette, separate from the bedroom, as well as a deli, restaurant, bar and gym on the premises.

Fifteen years ago, apartments represented five per cent of Sebel owner Accor Pacific's hotel market in Australia, says CEO Simon McGrath. Now it's 25 per cent.

"I think these apartment-style hotels have become very popular and are a growing segment of the accommodation sector," he said. "In the last 15 years, travel has grown strongly and more offerings have been required as travel has become more affordable for families and with the increase in corporate and events travel.

"As this continues, I think we're going to see more and more apartments. Into the future, we'll see more mixed use, too – hotels that have the traditional hotel room, as well as apartments, and residential apartments."

In Sydney, the new A by Adina hotel in the CBD is branded as offering apartment-style rooms with a hotel feel. Checking in this week for a city staycation were Joanne Morrow, 52, and her partner, Matthew White, 49, both of technology company McLaren International, and their seven-year-old son Harrison.

"Three of us in one hotel room wouldn't be practical and I didn't want to stay in an Airbnb where you have to do everything yourself," said Ms Morrow. "I heard this brand was coming up so I booked a two-bedroom apartment to see what it was like.

"And I do like it. You've got the concierge and a restaurant on the top floor and floor-to-ceiling windows. It feels very cool."

There was a gap in the market for a cross between serviced apartments and hotels, says Antony Ritch, CEO of Adina-owner TFE Hotels.

"Serviced apartments and apartment hotels have long been a staple of the Australian accommodation sector, and we saw an opportunity in the market for a new style of high-end premium experiences," he said.

"So when they stay, guests are given access to a hotel living experience for one night or more, that may have previously been reserved for owners of luxury condominiums."

Fifteen years ago, apartments represented five per cent of Accor Pacific's hotel market in Australia, says CEO Simon McGrath. Now it's 25 per cent.

"I think these apartment-style hotels have become very popular and are a growing segment of the accommodation sector," he said. "Over that time, travel has grown strongly and more offerings have been required as travel has become more affordable for families and with the increase in corporate and events travel.

"As this continues, I think we're going to see more and more apartments. Into the future, we'll see more mixed use, too – hotels that have traditional hotel rooms, as well as apartments, and residential apartments."

Serviced apartments originally began in Australia in the 1990s when the collapse of the Japanese market, airline strikes, wars, the oil crisis and "the recession we had to have" meant banks weren't prepared to lend for hotel development.

"They were built as 'quasi hotels' but were financed by mum and dad punters as strata apartments," said hotel and hospitality consultant Peter Hook. "These complexes are a particularly Australian accommodation concept and they're loved because they're perfect for family travel.

"The suggestion is now that with hotels getting such bad press for COVID handling, the fact that apartments allow you relative autonomy, open windows, balconies, no need to go to the buffet restaurant, little servicing, less interaction, they're the accommodation style of the post-COVID future."

TripAdvisor's Top 10 Hotels in Australia for 2021

  1. Element on Coolum Beach - Coolum Beach, Australia
  2. Kingsford Smith Motel - Brisbane, Australia
  3. Beach Club - Hamilton Island, Australia
  4. Korte's Resort - Rockhampton, Australia
  5. Quest Sale Serviced Apartments - Sale, Australia
  6. Treasury On Collins - Melbourne, Australia
  7. MACq 01 Hotel - Hobart, Australia
  8. Julie-Anna Inn, Bendigo - Bendigo, Australia
  9. Quest Ipswich Serviced Apartments - Ipswich, Australia
  10. Ovolo Woolloomooloo - Sydney, Australia

See also: Australian hotels claiming they're 'six star': Are they really?

See also: Six of Australia's most indulgent luxury experiences

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