SINGAPORE -- The serviced apartment industry in Southeast Asia -- which traditionally serves well-heeled traveling executives with high-end features such as full concierge and butler services -- is expanding its business focus to the needs of a less affluent, younger and growing migrant urban workforce.
That's the finding of a newly released academic study that describes an itinerant class of mid-level workers whose careers demand frequent cross-border relocation and an increasingly permanent need for temporary housing.
Titled "The shifting demographics of the serviced apartment industry in South East Asia," the paper, published in the "South East Asia Research Journal," cites a permanent condition of geographic temporariness among a growing proportion of Asia's middle-class urban workforce.
"While serviced apartments initially catered to affluent, middle-aged executives working in the central business districts of Asian financial hubs, my fieldwork documents the emergence of less prestigious properties that offer fewer amenities and are located outside major financial districts," writes the author, Max Hirsh of the Hong Kong Institute for the Humanities and Social Sciences. "These serviced apartments appeal primarily to middle-income tenants who, since the turn of the twenty-first century, have rapidly become the industry's core constituents."
Younger and less affluent transnational workers have rapidly become the serviced apartment industry's core constituents across Asia over the past decade, the paper says.
The professions of the clientele have also changed. The number of financial sector employees using serviced apartments was down by 30% between 2009 and 2014, with a more than doubling of employees in education, media, hospitality and information technology over the same period, it says.
The idea of low-paid, low-skill service sector workers living in dormitories has given way to new migrant class of geographically mobile middle-class workers living in temporary housing as they follow demand for their services across borders, Hirsh writes.
Relatively unknown before the 1980s, serviced apartments -- sometimes called "hotel-apartments" -- initially catered to affluent, middle-aged executives working on a temporary basis in the central business districts of various Asian financial hubs.
But since the turn of the 21st century, the fastest-growing segment of the serviced apartment industry has been facilities serving what might be called an expanding class of migrant workers: mid-level employees whose jobs require frequent relocation, creating a new professional class of nomads.
Hirsh conducted interviews and fieldwork in Bangkok and Singapore, and focused on the largest developer of serviced apartments in Asia, the Ascott Group, which operates more than 200 properties in Bahrain, China, India, Indonesia, South Korea, Oman, the Philippines, Qatar, Thailand, the United Arab Emirates and Vietnam.
Now more tiers
Ascott divides these properties into three tiers, each with a distinct target demographic.
The most expensive properties are called The Ascott, described as "exclusive residences [that] offer refined luxurious city living in modern elegant apartments located in the heart of ... the world's most vibrant cities."
One step down in price and standard is the Somerset, located in inner-city neighborhoods adjacent to the central business district, and intended to house business executives accompanied by their spouses and children.
The lowest rung in Ascott's hierarchy is represented by Citadines, tailored to the "independent traveler" and offering "comfortable spaces and flexible services to suit your global lifestyle." The rising popularity of the "lower-rung" Citadines, Hirsh writes, changes not only the clientele mix of serviced apartments, but their locations and design as well.
At the Citadines Mount Sophia Singapore, a serviced 154-room apartment building outside of what is considered the CBD, the clientele is generally young professionals in their 20s or 30s, typically bankers and technology workers, who stay for at least a month, and often up to three months, frequently on a joint work project, said Judy Wong, area manager for the Ascott Group.
There are far fewer frills at Citadines -- its rooms include small kitchens but have no butler service, no daily housekeeping service, and rooms that are smaller and not lavishly decorated.
"For the young crowd that we have, they don't want a room attendant to come in every day, fussing over them, cleaning up and all that. They work most of the time, most of them leave by 830-9:00 in the morning, and they're back by 630 or 7:00. They don't want a lot of attention," Wong said.
Costs for staying at any of the three levels of CapitaLand-owned serviced apartments vary widely. An online check of rates for a three-month stay at CapitaLand serviced apartments quoted daily rates of 228 Singapore dollars ($163) for Citadines Mount Sophia Singapore, and S$430 for the higher-end Ascott Raffles Place Singapore.
The trend is likely to grow as global exposure is increasingly a requirement for upper tier jobs. Recent studies by both the American Chamber of Commerce in Singapore and the EU-ASEAN Business Council cite Western employers in Asia complaining of a lack of local talent with international experience to fill leadership positions.
Employers and policymakers say workforce mobility is increasingly important as professionals seek global employment opportunities.
"If we are only living in our own well then we won't have that diversity, and if we don't have that diversity, we won't have resilience, we won't be able to cross-pollinate ideas from different societies to enrich our own," said Singapore's labour chief Chan Chun Sing in a recent address.
"The more mobile you are, the more you're able to move outside, the more experiences you can accumulate, the better it is for your career, the more competitive you'll be for jobs that come up in the corporation," said James R. Andrade, a vice president at Mondelez International and chairman of the American Chamber of Commerce in Singapore.