Investing in apartment hotels

For international guests on assignments of more than two months, staying in an hotel apartment is comfortable and cheaper, writes PETER MUIRURI

The development of apartment hotels is gaining popularity in the hospitality industry. The concept incorporates the flexibility of long-term apartment living and a hotel stay with the usual short-term catering services.

The period of stay in the apartment hotel varies from a few days to months or even years, with those

Ole Dume Apartment Hotel in Nairobi. [Photo: Peter Muiruri/Standard]

staying in these establishments viewing them as a home away from home. The concept works well for families on holiday and those in the midst of a relocation or in need of temporary housing.

Apartment hotel suites are fitted with everything expected in a high-end home. This includes a cooker, oven, fridge, freezer, blenders, electric kettles, cutlery and wardrobe among other furnishings.

To make one’s stay more enjoyable, most apartment hotels invest in state-of-the-art gym equipment, barber and beauty parlours and spas — all meant to confine clients within the facilities.

According to Patrick Magello, Ole Dume Apartment Hotel General Manager, such facilities offer service that may not be factored in during a brief hotel visit.

"The key selling point is to offer ‘living’ rather than a ‘stay’ in a hotel. Our guests have the luxury of making and personalising their meals. Such a concept is ideal for families that may not want to consume the exotic menus in many hotels," says Magello.

That makes guests ‘own’ the facility for the duration of their visit; a feeling Magello says gives them much freedom as opposed to the rigid hotel environment.

Another key advantage of an apartment hotel is that families get to stay together unlike in many hotels where members of a family of often accommodated in different rooms.

For example, the Ole Dume Apartment Hotel has 29 fully furnished apartments, nine of which are double bed-roomed and 20 are single bed-roomed.

Room service

Fairview Apartments located within the picturesque hotel by the same name has nine units and guests can choose a one-bedroom, two-bedroom or a three bedroom apartment.

According to Linda Achieng, the Apartment Coordinator at Fairview, apartment living within a hotel has financial benefits to the guest. In contrast to the daily room rates charged by contemporary hotels, apartments within the facilities are much cheaper if someone is leasing a unit for an extended period of time.

The minimum period a guest can rent one of the Fairview Apartments is three months.

Magello concurs with Achieng, adding that the price of Sh170,000 charged by his outfit for a two bed-roomed apartment is far more reasonable, considering that it includes daily room service, changing of linen and the use of the swimming pool and gym.

"As opposed to the hotel pricing, hotel apartment rental does not depend on high or low seasons. For us, it is always high season since we operate on fixed prices. We do not close or send some workers home at any particular time of the year, thus ensuring job security for all," says Magello.

The concept of renting an apartment within a hotel is also popular with business travellers on extended assignments, more so those who appreciate the larger space a typical suite provides.

Such can enjoy the comforts of the apartment while enjoying meals cooked in the restaurants within.

long-term investment

"Kenya is becoming a big social and economic hub for the entire region. Many foreigners doing business in places such as South Sudan and the Great Lakes region prefer the long-term lease of the apartments as opposed to hotel rooms. They want to come back from business trips and have the cosy feel of a home away from home," says Magello.

But why would a developer opt to rent out and service the apartments rather than sell, recouping all invested funds in one clean sweep?

According to Magello, money quickly loses value unless it is reinvested and in a long-term asset.

"The developers of our facilities were looking for a long-term investment rather than make a quick buck and disappear. Many people opt to sell off such property because they do not like the hectic schedule of managing the facilities on a daily basis," he says.

He adds that managing such a facility requires that one invests in well-trained personnel who have the necessary skills needed for the long-term interaction with the guests.

"Sadly, some who put up similar outfits do not appreciate the role played by good managers, opting to go for cheap labour that does not go well with the clientele. They quickly realise that managing an apartment hotel is not like catering for guests who come and go, neither is it a matter of just collecting rent from the apartments," says Magello.