Apartments at your service

The report from CBRE Hotel highlights that 75 per cent of new traveller accommodation projects either planned or under construction will involve serviced apartments, given the financing constraints on new hotels and the comparative cost benefits of serviced apartment projects.

Quest reported that its revenue had grown by more than 10 per cent in 2009-10, with average room rates increasing by 1.2 per cent.

Quest's general manager, Nick Suriano, said it had been a difficult year for hotels due to the volatile economic climate in Europe and the US, and the strong Australian dollar.

"Leisure travellers opted for overseas destination ahead of domestic travel," he said.

Quest has opened four new properties, this year, including two at Mildura and Ballarat, bringing their total to 125.

Serviced apartments were first rolled out in Australia in the 1970s in response to consumer demand for apartment-style accommodation suitable for extended stays.

Apart from Quest, operators include Mantra Group, Oaks Hotels & Resorts, Accor Hotels, Toga Hospitality, Mirvac Hotels & Resorts, Meriton Serviced Apartments, Q Resorts and StayWell Hospitality Group.

The CBRE Hotels report said serviced apartments 957 establishments and 53,118 rooms now accounted for a quarter of all casual accommodation in Australia.

Domestic customers made up 82 per cent of serviced apartment business.

"While domestic customers are comfortable with the self-sufficiency and independence afforded by serviced apartments, international travellers are less so and lack knowledge of the opportunity," CBRE Hotels regional director Ken Smith said.

The report highlights two distinct market segments in this sector, the leisure traveller and the corporate traveller.

Demand from the leisure traveller has generated serviced apartment projects in tourist markets, particularly in Queensland.

Mr Smith said demand from the corporate market had fostered more recent projects in urban areas.