Serviced apartments are growing increasingly popular with the corporate traveller and show particular appeal for extended stay solutions

The total number of serviced apartments globally now exceeds over one million, according to the new seventh edition of the Global Serviced Apartments Industry Report (GSAIR), released last week. The 2018/2019 edition of the publication, compiled by the Travel Intelligence Network and published by The Apartment Service, says there are now more than 1,022,984 serviced apartments in 13,164 locations, that is up almost a quarter (+23.7%) on the 826,759 level recorded two years ago and a more than doubling in the rate of growth (versus +10.5% in 2016/2017 edition).


Summary:

  • Latest research from The Apartment Service  shows the total number of serviced apartments globally now exceeds over one million;
  • The new seventh edition of the Global Serviced Apartments Industry Report (GSAIR), published last week, shows there are now more than 1,022,984 serviced apartments in 13,164 locations, that is up almost a quarter (+23.7%) on the previous edition;
  • Research shows over half of corporates are using serviced apartments for business travel, with 40% allocating up to 20% of accommodation budget to extended stay solutions;
  • A serviced apartment generally applies to any type of furnished apartment available for short-term or long-term stays, which provides amenities, housekeeping and a range of services for guests

The latest edition of the much-valued reference guide for corporate buyers, apartment operators and suppliers to the sector, highlights how corporates have successfully adopted serviced apartments for business travel, assignment working and relocation requirements. It found that over.half of corporates are using serviced apartments for business travel, with 40% of corporates allocating up to 20% of accommodation budget to extended stay solutions.

Another key finding from the results of the latest GSAIR survey of 6,000 corporates, 2,000 serviced apartment operators and over 1,800 agents was more than one in three (37%) corporate companies are now mandating the use of a specialist agency channel, alongside an RMC or TMC for their apartment bookings, but almost a half (47%) allow their travellers to independently select/book their own long stay accommodation.

Further, it is clear that serviced apartments have found their niche as a ‘stand-alone’ category and are featuring less in the standardised annual hotel RFPs, according to the report, while corporates are also continuing to leverage long-stay savings of between 17% and 29% versus their hotel programme spend.

A serviced apartment generally applies to any type of furnished apartment available for short-term or long-term stays, which provides amenities, housekeeping and a range of services for guests and where most taxes and utilities are included within the rental price. They offer facilities much like a traditional hotel but with added space, convenience and privacy like home, so you can enjoy living like a local when travelling.

That is why they have been particularly popular with corporates for business travellers, but they are now also increasingly being used by leisure travellers as a credible and cost-effective alternative to hotels, and also of course for the growing bleisure market which marries the two areas.

The Blue Swan Daily reported earlier this year on the rapidly expanding serviced apartment industry in the UK, but highlighted that figures from trade body The Association of Serviced Apartment Providers (ASAP) and benchmarking specialist STR actually showed that average occupancy for the sector was down -1.5% year-over-year in Q1 2018 to 74.9% in a challenging first quarter of the year. On a positive note though average daily rate (ADR) rose +3.5% to GBP133.87, resulting in a +1.9% growth in revenue per available room (RevPAR) to GBP100.31.

We await new data on the UK performance of the industry in Q2 and H1, but ASAP remains upbeat as it says comparisons in 2018 are being made with what it describes as “a landmark year,” especially in the first half when there was a “spike in arrivals after the devaluation of pound sterling following the 2016 Brexit Referendum”.