Optimism and occupancy in the sector of serviced apartment are both growing as the industry is gradually maturing and spreading awareness among the business travellers and buyers. Figures from STR Global and ASAP or the Association of Serviced Apartment Providers reveal that in the first quarter of 2017, occupancies in London crossed 78% which was up from 10% in the first quarter of 2014. Expert researchers also claim that serviced apartments will very soon become the most established asset class due to the growing demand for the sector.
Serviced apartment operators and the apartments in Japan, Hong Kong and other places need to take that extra step to rejuvenate the share of the market from the corporate clientele. Off late, it has been seen that not many corporate are booking serviced apartments as compared to the data 18 months back. Hence the sector probably needs to do something extra to lure those corporates who still don’t seem to be convinced by the benefits of such amazing hotel alternatives.
Is there a growth in expectation among corporate clients?
Along with the spread of awareness of the serviced apartment among the corporate clients, travel management firms and travellers, there has also been a sudden surge in expectations as well. On the priority lists of the corporate clients, free high-speed Wi-Fi connection ranks highest, followed by single occupancy and the opportunity to accomodate a full family. Something that is not so important among them is in-house services but amenities and facilities are necessary.
Hence the serviced apartment operators require taking a look at their processes. Statistics reveal that 89% of the companies use a serviced apartment for at least one business reason and half among them have a proper process of formal procurement. This clearly implies that the serviced apartments are either tough to book or they don’t have a proper booking policy.
Yet the serviced apartment market seems to rise
Despite such issues which are keeping this sector from reaching the zenith of success, the market seems to keep rising. PwC anticipates a 50% hike in business assignments will be taken by the end of 2020 and the MNC by then will have assignees in 34 countries. Hong Kong will be the top-most destination visited by business clients followed by Singapore, London, Bangkok, Macau, Paris, Dubai and New York. Throughout the Asia-Pacific in particular, the overall demand for serviced apartments has surged by 25% within a decade as more and more employers offer short-term deals to bridge the skill gap and tackle costs.
As the sector is touted to grow in terms of strength, more consolidation will be seen in the near future. There will be more partnerships and acquisitions. Moreover, this sector is trying its best to provide more than just a place to stay. Leisure facilities and flexible work space will become more common as the new generation of travellers would be the millennials.
As for the predictions for the future, there is going to be some exciting time for the apart hotels and serviced apartments. The different operators of the serviced apartments are gradually capturing the trend for the travellers who hunt for a home with flexible spaces to work along with social spaces and food services.