July 15, 2024

SilverDoor reports falling accommodation rates

A report from serviced accommodation specialist SilverDoor has highlighted falling accommodation rates due to a shifting geopolitical landscape. 

The serviced apartment agent’s 2024 Market Update reveals the continued decline in global average daily rates (ADR).

Tensions in the Middle East and upcoming elections in Europe and the US have impacted corporate traveller confidence and the supply chain, as well as pricing and availability.

Cost has also been impacted by the Israel-Hamas conflict, with flight restrictions to several Middle East destinations and disruption to Red Sea trade shipping routes.

Global ADR has dropped 3% to £157.60 (Nov 23-Jan 24) compared to the same period last year (Nov 22-Jan 23). The most significant decline is in the Americas, which has reduced by 9.8% YOY, from $221.55 in Nov 22-Jan 23 to $199.75 in Nov 23-Jan 24.  

The average length of stay, meanwhile, has seen a reduction of 25% overall across all global markets, including a more cautious approach to corporate travel for the turn of the year.

Despite this, the economic growth in the Emirates and India “remains buoyant”. This is influencing the type of demand for corporate travel accommodation and working to maintain occupancy levels.

Martin Klima, Chief Customer Officer at SilverDoor, said: “Wider geopolitical events are undeniably impacting business and accommodation — the incoming wave of elections worldwide is likely to have particular implications for the travel market. Global instability poses the risk of business uncertainty, less travel confidence and unpredictable market conditions.

“As we head further into the year, it will be interesting to watch how the market shifts in terms of supply and demand as corporate clients maintain a keen eye on cost. Certainly, in the Americas, where we have seen the biggest decline in ADR YOY, corporates are turning their demand away from the more expensive hubs like New York towards more affordable locations.”

silverdoorapartments.com

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