Short stays focus on making millennials feel at home
Demand for serviced accommodation is being led by ‘young urban socials’, who are often mobile and more inclined to change jobs frequently
In the realm of modern-day serviced apartments, it’s all about millennials.
Defined as the generation born between 1977 to 1995 (give or take), they sit between the now ageing “baby boomers” conceived in the years following the second world war, and the upcoming Generation Z (Gen Z), born roughly between 1995 and 2014.
Baby boomers might enjoy more spending power than their predecessors, but millennials are the ones who “want it all”. Except that, unlike their parents, they don’t need to own it.
For this educated, globe-trotting demographic, experiences matter more than material goods. Status is measured more by social media following than by designer labels.
They may never buy a car, now that ride-sharing’s here, and possibly won’t even aspire to home ownership – a dream held so dear by generations before – when renting is cheaper, more convenient, and flexible.
They also tend to change jobs frequently, seeking postings in new locales, and choosing serviced apartments as a temporary home especially in an expensive city like Hong Kong.
Since millennials are inclined to outsource tasks wherever possible, the “service” side of serviced apartments suits them to a tee, as well.
David Ji, Knight Frank director and head of research and consultancy, Greater China, says this combination of factors has prompted developers to look for opportunities in Hong Kong.
He points to the trend of repurposing existing buildings – often former residential apartments or hotels – into serviced apartments, designed to target millennials.
Tane Residence, for instance, has been converting under-utilised flats in residential buildings, refitting the interiors to provide new kitchens and bathrooms with open-plan layouts to deliver the modest yet modern digs which millennials prefer.
The company now operates around 60 furnished studios in Sheung Wan, Central and Mong Kok.
National Hotels is expanding its portfolio of all-suite boutique hotels in Central with “virtually everything the millennial traveller might require”. Four hotels – The Putman (opened in 2007), The Jervois (2011), 99 Bonham (2012), and One96 (2014) – are located in a vibrant, culturally significant neighbourhood with a choice of dining, leisure, fitness, shopping and entertainment options.
A purpose-built property comprising of 91 apartments in phase one, it has attracted food and beverage operators catering to “young urban socials”, as millennials are also known, including a neighbourhood gastropub, Second Draft, and a casual hangout space in Restaurant BOND by the Three Monkeys.
But all this catering to the whims of a generation is also beginning to raise questions: what happens to the infrastructure built for them when these young folk finally grow up? When the urge to settle down, and perhaps have babies, puts the brakes on their single lifestyle?
What if Dowell Myers, a professor of demography and urban planning at the University of Southern California, was right in his prediction, published in a paper last year, that American cities had already reached “peak millennial” (in 2015), and that, in the coming years, demand for urban living is likely to stall?
Knight Frank’s Ji sees a shift already in his own neighbourhood of Tung Chung, where bankers, lawyers and their ilk are now settling down into family life in more affordable homes outside the central business district. He notes the correlation to maturing age. But as one generation moves out, Ji believes another will replace them, probably wanting the same things millennials do now.
This in turn, he believes, should continue to drive demand for well-located serviced apartments built around a lifestyle offering.
Taking a cue from London – as Hong Kong often does – Ji points to the likes of Google and Yahoo replacing banks as mainstream tenants of prime city offices. Their employees need housing of a different kind to the traditional corporates.
Overall, he says, the workforce will continue to become more mobile, so flexible accommodation will meet the short-stay need. It also solves the problem of high rentals in urban locations.
Besides, adds Ji, if “peak millennials” were to be a factor impacting housing supply in cities, developers would be seeing it first. The fact that in Hong Kong they continue to build, expecting that they will come, suggests no sign of diminishing demand.
