An assessment of the growth and the performance of serviced apartments in Kenya a case study of Kilimani area
Serviced apartment is a contemporary accommodation product that has gained significant popularity in recent years. However, the rate of expansion globally varies from one place to the other and from time to time. The product is a hybrid of the residential apartment subsector and the hotel market. Serviced apartments have received limited research attention despite their growing growth. The study therefore sought to determine the growth and the performance of serviced apartments, key drivers, challenges and constraints of serviced apartments development in Kenya and recommend appropriate mechanisms of enhancing serviced apartments development in the country. The researcher selected Kilimani as the study area. The study targeted the serviced apartments developers or property managers and in their absence the caretakers or any other developer‟s representatives were selected. The study also captured the guests‟ perceptions. In order to enable comparison of the serviced apartments returns with other investment options, performance information of the unfurnished apartments, furnished apartments, offices and hotels was also collected. A combination of primary and secondary data collection instruments were utilized during collecting of the necessary information. The data gathered from the field survey was thoroughly analyzed using qualitative and quantitative methods and then clearly presented in form of percentages, frequencies, figures, photographs, written texts, pie charts, bar graphs and tables. The findings depict proliferation of serviced apartments in a highly fragmented subsector that is still evolving. The key demand drivers include individual business travelers; expatriates, diplomats and corporates; meetings and conference groups, returning residents and leisure travelers. Its growth is mainly linked to the expansion in extended stay global business travelers, increasing cost saving initiatives, globalization, increasing international conferences, changing employment structure, infrastructural development and economic growth. The main challenges and constraints to serviced apartment include competition, financial constraints, health and insecurity concerns, changing guests‟ requirements, poor infrastructure and lack of awareness about the product. To address these challenges and constraints, this study recommends intensifying marketing and awareness creation, enhancement of the ease of financing, resolution of the current security and health concerns, infrastructural development, response to the changing guests‟ requirements and enhancement of the ease of doing business in the country.