Optimism in the serviced apartment sector is at its highest since the Covid-19 pandemic broke out, according to the latest Association of Serviced Apartment Providers (ASAP)/Savills sentiment survey conducted in June 2021. 87.3% of respondents are ‘slightly or significantly more optimistic’ about their business outlook over the next 12 months, up from 71.8% in November 2020. 74.6% of respondents expect occupancy levels to return to 2019 levels before the end of 2022, hinting at a 6-18 month recovery period.
Furthermore, 81% of respondents believe serviced apartments are better positioned to outperform the wider hotel market. Key reasons given include: self-contained units, better social distancing ability and more space than in traditional hotels. Better agile working facilities are also becoming an increasingly important feature for serviced apartment providers, in line with employers and employees moving to more flexible working practices post-pandemic.
Over 46% of operators are anticipating an increase in staff over the next six months, following demand pickup. However, the movement of EU nationals and workers reskilling during the pandemic has created some headwinds, with 47.6% and 38.1% of respondents listing staff availability and staff costs as a ‘slight’ or ‘significant’ challenge to their business over the next three years respectively.
Josh Arnold, associate in the commercial research team at Savills, comments: “The reopening of self-catered accommodation on 12 April and all accommodation on 17 May, coupled with a significantly improved consumer environment and pent-up travel demand, has boosted operator confidence enormously. While international travel restrictions continue to pose the biggest threat to the industry in the short-term, many operators are expecting a relatively quick turnaround in terms of demand once restrictions ease.”
James Foice, ASAP CEO, adds: “Once again, it is heartening to see the resilience in our sector, and that my optimism about a relatively smooth bounce-back seems to be justified.
“Throughout the pandemic, we have seen a rise in enquiries from both operators and corporate buyers about what accreditation in the sector means, and the reassurances it offers the traveller. As a small part of the wider hospitality industry, the serviced apartment sector is perfectly placed to benefit from the travel buyer’s need for self-contained and professionally-run accommodation, independently-accredited, when they place their employees.”