July 16, 2024

Serviced apartment report reveals key trends

Corporate travel has levelled off following a peak in 2022 and has declined since 2023, according to the 2024 Global Serviced Apartment Industry Report (GSAIR).

The report, based on a bespoke survey of around 3,000 travel and mobility managers, agents, relocation and travel management companies, plus serviced apartment and corporate housing operators, found there are now fewer but longer stays.

It concluded that this is due to reviews of post-pandemic travel programmes, growing corporate commitment to sustainability and the adoption of purposeful travel.

“2024 should be seen as the new normal,” the report said.

It also identified other trends, including:

  • A rise in hotel rates, especially in London, due to the gradual increase in the return to office-based work in some sectors, with companies now requiring employees to be in the office at least three days a week.
  • Workstations are now a mandatory element of corporate RFPs.
  • The relocation market has been becalmed by economic and geo-political factors, so apartment operators are looking to other source markets including blended trips and group travel associated with film, music, and sport.
  • ESG is no longer a box-ticking exercise. As well as Gen Z travellers, travel and mobility managers now require providers to evidence their ESG credentials in most RFPs. While larger brands are adapting, smaller operators risk falling behind the curve in meeting the requirements.
  • Buyers want technology to provide more choice, slicker and simpler booking processes, and a better user experience. They remain frustrated by TMCs reliance on legacy GDS technology, despite the opportunities provided by API direct connects and AI. The problems start with the more emotive longer stays which demand human interaction.
  • Hotel chains are reacting to fragmentation of the extended stay sector by launching their own extended stay brands, with built in GDS connectivity, either in dedicated buildings or as dedicated floors within their hotels. They have the economies of scale, but cannot realistically compete with the smaller, more agile players.
  • Disintermediation (direct selling to corporates) has been accelerated in the air and hotel sectors by NDC (New Distribution Capability.) If TMCs and RMCs do not expand their inventory and bookability, expect suppliers to ramp up their direct sales too. It won’t be long before TMCs start buying serviced apartment specialist agents, or vice versa.
  • Outdated technology is a major frustration for buyers and guests – the square peg, round hold adage no longer washes. Sourcing needs to get slicker.

ariosi.com

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