by Chris Betros

 

Reprinted from Japan Today magazine (www.japantoday.com), September 2003

 

Hotels are fine for short-term stays, but many business travelers who have to spend longer periods of time in one location often need something more. Serviced apartment providers have stepped in to fill this niche and you won't find a better example of the old saying "home away from home" than Oakwood.

 

Although the concept of serviced apartments is well known in North America, Europe and other parts of Asia, it is still fairly new in Japan. Oakwood has only been in Japan since 1999, but has been in the business worldwide for 40 years. Currently, Oakwood is the world's largest corporate housing provider with over 400,000 furnished apartments in more than 2,000 U.S. cities, and selected locations in Asia and Europe.

 

Primarily a management company, Oakwood (http://www.oakwoodtokyo.com/) runs four properties in Tokyo - at Akasaka (41 residences), Aoyama (72 residences), Shirokane (36 residences) and Azabujyuban (83 residences), and a fifth with 54 residences scheduled to open in Roppongi in January.

 

Apartments are much larger than hotel rooms (the smallest is 43 square meters), ranging from one-bedroom to three-bedroom units. They all have fully furnished living and dining rooms, fully equipped kitchens, two phone lines plus high speed Internet access, flat screen TV, cable, DVD, CD stereo, washer/dryer and other facilities. There is 24-hour security and all staff are bilingual.

 

For Peter Lucas, general manager of Oakwood Azabujyuban, the biggest appeal of serviced apartments is that they offer a home-style environment and are more hospitable. Guests and staff often know each quite well; it's not unusual for guests to hang out at the front desk chatting with staff.

 

A 20-year veteran of the hospitality industry, Lucas is one of three Oakwood general managers in Tokyo. After the Roppongi property opens, he'll be dividing his time between managing it and the Azabujyuban apartments where his office currently is. A graduate in hotel management in Melbourne, Lucas has worked in Australia, Hong Kong and Bangladesh. He was with the Sheraton hotel group before joining the serviced apartment business in 1997, as a GM in Thailand. He moved to Oakwood in 1999.

 

Lucas often starts his day around 8 a.m. Most of the day, he is out and about meeting guests most of the day, and since he lives in the building, his job is pretty much seven days a week. When he is not working, he tries to go jogging, bicycle riding or get in a game of squash.

 

Japan Today editor Chris Betros visits Lucas at Oakwood Azabujyuban to hear more about the serviced apartment business.

 

How did you end up with Oakwood?

 

I grew up in Hong Kong. Then I went to university in Melbourne where I studied hotel management. I worked in Hong Kong with Sheraton, in Australia and Bangladesh. I joined the serviced apartment business in 1997, as a GM in Thailand. Finally, I moved to Oakwood in 1999.

 

What's Oakwood's history in Japan?

 

Oakwood has been in Japan for three years. When we opened in 1999 at Akasaka, we were the first dedicated serviced apartment in Japan at the time. Since then, we have opened more properties at Aoyama, Shirokane and Azabujyuban, and are in the process of opening a new one in Roppongi. The market is much more competitive now because a number of new players have come in.

 

We have three general managers in Tokyo. I'll be managing the Roppongi project as well. We report to the Singapore office. All the GMs have a local sales team under one director of sales, so we can centralize and coordinate our activities.

 

What is the state of the serviced apartment industry in Japan?

 

Oakwood has been in business worldwide for 40 years, but the industry is still in its infancy in Tokyo. In Singapore and Thailand, it is more well known. It is a matter of educating the market so people know what is available. Most of our clients who have used hotels for long stays find us very attractive because of the hospitality and size of apartments.

 

What do you offer?

 

We're not a hotel, nor do we try to be, although in the future, I see a merging of lines between hotels and serviced apartments. We offer home-type environments for travelers. We don't have restaurants, but we do have lounges. Apartments are larger and fully fitted out with kitchens, TVs, DVDs, the lot. Our smallest apartment is 43 square meters. We hold resident night functions such as BBQs and movie nights, so guests and staff can meet on a regular basis. We have started putting different language magazines such as French, German and Italian, in apartments. The latest service is offering free bicycles.

 

What trends are emerging in the business?

 

Our clients' long-stay commitments have changed. Before, they would commit to one or two-year contracts. Now we are getting a lot of six-month and three-month business. And fewer families, as companies try to cut costs.

 

Who are your typical clients?

 

Business travelers are our prime customers. We don't do holiday groups and tour packages. About 60% stay for three months or more, 20% for two weeks or more. Some set up shop here and travel back and forth to their home countries for a year or so. Others use it as their permanent home base. Some stay here until they find a larger place; others while they prepare to leave.

 

What is your occupancy rate?

 

Although supply is greater than demand in Tokyo, we are running at about 94% here at Azabujyuban. The occupancy rate of most of our properties is around the high 80s and early 90s.

 

Are your properties different from Oakwood residences in other countries?

 

Some properties in Japan are smaller as would be expected with real estate values. In South Korea and the Philippines, our largest is 220 square meters. Here it is 80-100 square meters. Oakwood generally tries to standardize its services, fixtures and fittings. The new Roppongi residence will have its own gym and bar.

 

How do you market yourselves?

 

We have our own English website and will soon have a Japanese one, so you can make reservations online. We have six sales managers who go out doing person-to-person calls. We run some magazine ads and do promotions with credit card companies. A lot of it comes through word of mouth because we have a lot of repeat guests.

 

Where do you get your staff from?

 

Some of our staff are former hotel people, others have not been in this industry before. We get a lot of young graduates. Right now, we are hiring a full team for Roppongi. We had hundreds of applicants, especially from younger people. Our trainers will come from the U.S. in the pre-opening phase.

 

With fewer check-ins than a hotel, there seems to be a much friendlier atmosphere here.

 

One of the reasons I joined this business is because there is more intimacy. Staff and guests know each other. You have more quality time with clients. Sometimes, guests might come down and spend an hour at the front desk chatting with the staff.

 

Are you "open" 24 hours a day?

 

The front desk runs from 6:30 a.m. until 10 p.m. Then we have English-speaking security from 10 until 6:30 a.m. We used to have a 24-hour-a-day front desk but there was very little demand for it.

 

What's a typical day for you?

 

I start around 8 a.m. and finish about 7 p.m. Most of the time, I am out and about meeting people. I live in the building, so it is always seven days a week for me. When our Roppongi property opens, I'll be going back and forth between here and there.

 

What do you like to do when you are not working?

 

I like jogging and bicycle riding, and a bit of squash.

 

What sort of things in business make you mad?

 

Lack of common sense by people with decision-making responsibility.