GSAIR 2023 14
Extended stay trends
By Mark Harris Contributing Editor
In last year ’ s GSAIR we made several predictions and raised a number of issues that we felt would have the biggest influence on the serviced apartment sector in the year ahead .
Having risen magnificently to the challenges of Covid , we speculated about whether the serviced apartment sector could maintain their competitive advantage over hotels .
In terms of occupancy , they have . 2022 saw a significant boom in business as demand returned post-pandemic . By June 2022 , when last year ’ s GSAIR was published , UK serviced apartment occupancies nationwide were 78 % compared to 73.5 % for hotels . Outside London , they were 76.2 % compared to 73.4 % for hotels , and in London averaged 80.5 % versus 73.8 %. 2
Last year ’ s boom has settled but travel , assignment and relocation business continues to grow , despite inflation and rising energy costs driving rates up . Although fewer trips are taking place , employers are encouraging their travellers to stay longer to maximise productivity and minimise travel .
Cost containment , sustainability , traveller safety and duty of care still head the list of priorities for travellers , travel , and mobility managers , yet it remains unclear whether corporates are really prepared to pay more for a more sustainable accommodation product .
The sharing economy , consumer desire for travel and flexible lifestyles , and a lack of affordable housing are amongst the factors driving fragmentation of the extended stay sector which , in turn , has generated ‘ serviced living ’ as a new , generic term to describe the range of concepts that have emerged in recent years .
Demand for , and supply of serviced living - fully furnished accommodation including kitchen facilities , with some private and communal spaces – are growing . That ’ s because they are cheaper to rent and profitable to build . In London , serviced living grew by 26.7 % in 2022 , with further growth predicted . 4
Indirectly , the pandemic enabled serviced apartments to overcome some pre-existing barriers to growth . Distribution is now more mature , with operators recognising the importance of providing availability on the GDS , whilst many TMCs are complementing their technology stacks with rich content from non-GDS providers .
As the lines between serviced apartments , Home Stay and Co-living continue to blur , the question is precisely what is a serviced apartment ?
By the time the survey results from the next GSAIR are published , the future landscape may become clearer . Or perhaps we ’ ll just have to become more comfortable with the ever shifting sands of what temporary living means to operators , corporates , agents , and guests .
Meanwhile , the traveller and assignee demographic is changing . Gen Z now make up 30 % of the world ’ s population and are expected to account for 27 % of the workforce by 2025 . 3 This shift has opened eyes in the C-Suite to the need to provide accommodation , such as Home Stay and Co-living , that appeals to those travellers .
2 . STR data in The Business Travel Magazine 2023 Serviced Apartments 3 . https :// www . zurich . com / en / media / magazine / 2022 / how-will-gen-z-change-the-future-of-work #:~: text = Share % 20this & text = Born % 20 between % 201997 % 20and % 202012 , of % 20the % 20workforce % 20by % 202025 . 4 . Savills - https :// servicedapartmentnews . com / news / london-leads-the-way-for-european-serviced-apartment-growth /