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The serviced apartment sector was one area of the business travel sector which seemed to flourish during the pandemic, benefiting from the ‘work from anywhere’ and flexible living trend, as well as ticking the CSR box by offering travellers the option to have limited contact with other people.
According to the Global Serviced Apartment Industry Report (GSAIR) 2022, at the tail end of the pandemic, 15 per cent of UK businesses had increased their overall use of serviced apartments during 2021. Fast-forward a year and with the ‘work from anywhere’ and bleisure trends still very much part of corporate life, the outlook for the sector remains positive.
The GSAIR 2023 report found serviced apartment usage by corporates has grown by 53 per cent for business travel and by 38 per cent for assignment work since last year. The report also noted it was the tenth consecutive year the sector has grown.
One buyer quoted in the report says: “We utilised apartments quite heavily during the pandemic through our safe passage programme. Our crews needed to get to certain locations for ships, refineries, or oil rigs, so we used serviced apartments for quarantine provision, and as medical centres because of their flexibility. That traction has continued post-pandemic.”
The Apartment Network’s director of marketing & ESG, Sam McMillen, agrees when asked if the increased use of serviced apartments was here to stay. “Absolutely, and it’s still growing. What Covid gave [many] employees was the introduction to a new way of working – a new level of flexibility. The pandemic also gave the serviced apartment sector visibility and credibility.”
The Apartment Network, whose network incorporates 55,000 apartments across 50 countries, also carried out a survey of travel managers this year, which found 19 per cent of supplier respondents expected an increase in requests for serviced apartments over hotels, and that figure is expected to increase in 2024.
Carol Fergus, director, global travel meetings and ground transportation, at Fidelity International says: “There is now dynamic working and people do want it. During Covid people wanted to have their own space and not be surrounded by lots of people, so there’s been a shift around hybrid working and having that home-from-home [experience], and that’s the attraction to use serviced apartments over hotels.”
However, Fergus says that serviced apartment usage depends on the type of traveller. “Serviced apartments seem to be for those with more non-client-facing roles and those who are client-facing seem to want hotels as opposed to staying in a serviced apartment and having to cook dinner. Companies are asking people to stay longer so that is an attraction.”
The trend of fewer, but longer trips has also helped find a permanent place for serviced apartments on corporate accommodation programmes.
Pauline Houston, vice president of business development at SilverDoor, says: “The length of corporate business travel stays has certainly increased compared to pre-pandemic levels. The inclusion of serviced apartments into what have historically been hotel-focused accommodation programmes and itineraries pre-pandemic has seen significant growth.”
LONG-STAY TRENDS
The GSAIR 2023 report found 87 per cent of serviced apartment agents reported an increase in the average length of stay.
“We have heard of corporates mandating that stays over five nights should book serviced apartments and we expect this trend to grow,” says The Apartment Network’s McMillen.
Fidelity International’s Fergus says: “We say [if it’s] five nights, [then] stay in a serviced apartment but we don’t mandate it. It’s in our policy and they will be advised to use them if they are available.”
This aligns with what SilverDoor has seen too. Houston says: “The faster growing trend we have seen from clients is for travel buyers and managers to recommend, rather than mandate, their use for stays of four or more nights, so it is at the traveller’s discretion.”
But can the sector keep up with the demand? According to property specialist Savills, based on what is under construction and with final planning, the supply of serviced apartment stock across Europe is set to expand by 21 per cent over the next three years.
According to Rebecca Hollants Van Loocke, COO EMEA, at Frasers Hospitality: “Europe remains the epicentre of serviced apartment demand, and we have seen rates rising in the UK’s major cities including London and Edinburgh, likely influenced by the rise in energy and labour costs.”
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