Key highlights from the survey reveal:
• Improved outlook has been supported by increased corporate demand (41% of respondents noting an uptick compared to last year) and leisure demand in line with that seen in 2017.
• As a result, the year-end outlook for operational performance remains robust with a net balance (those expecting an increase, minus those expecting a decline) of just over 34% anticipating 2018 occupancy to be up on last year.
• A larger net balance (52.3%) are envisaging Average Daily Rates (ADR) will also report growth on 2017.
• This positivity is already being borne out by year-to-date performance for the regional market. Looking to the future, half of respondents of the survey stated they were slightly to significantly more optimistic for 2019.
• Of this half, just over 20% stated that they were significantly more optimistic – the highest percentage since the November 2016 survey.
Marie Hickey, director in the commercial research team at Savills, comments: “The improvement in optimism felt in the serviced apartment sector reflects the continued growth and maturity of the sector and its rising appeal to travellers from both the corporate and leisure side. As we’ve already seen, and which is reflected in the survey results, this will further support operator expansion plans.”
Yet the survey did highlight rising concerns related to Brexit with respondents citing wider economic conditions (75%), staff costs (50%) and staffing availability (46.5%) as increasing challenges to their business going forward.
James Foice, CEO at ASAP, said: “With Brexit looming, it’s not surprising that this year’s survey revealed the biggest challenge to the industry over the next three years are the wider economic conditions, such as the likely impact and growing uncertainty of Brexit.
“I am delighted however, to see respondents citing an improvement in corporate business. We find that many business travel guests are sometimes opting for two bedroom apartments, not only a cost-effective option, but one that also provides a little companionship to employees working away from home. It’s also great to see that leisure demand remains stable, as again this is a strong market for serviced apartments and one we hope will continue to increase.”