GSAIR 2023 54
Future outlook
By Mark Harris Contributing Editor
Operator sentiments for the immediate future are positive . As Fig . 29 shows , optimism centres upon all performance areas , ADR , occupancy , average length of stay and RevPAR . Operators had the highest level of optimism in relation to increased levels of ADR .
Looking to the future , Fig . 30 shows that 71.3 % of operators predict that more corporates will switch from hotels to serviced apartments . 60.55 % believe digital nomads want a low-touch , high-tech experience , whilst just under half ( 49.54 %) predict that sustainability will revolutionise the way we do business .
New opportunities
So , what does the next 18 months hold for the sector in terms of demand and supply ? George Sell from Serviced Apartment News believes more new hotels will have dedicated serviced apartment floors so they can service corporates ’ short and long term stay markets .
“ I also think we ’ ll see more branded aparthotels seeking to compete with Locke and Wilde . We ’ re also seeing more extended stay hotel brands launched in the U . S . and I ’ m surprised that more of those haven ’ t made it over to Europe to challenge the likes of Staybridge .”
Niko Karstikko of Bob W . sees new opportunities ahead . “ There ’ s a massive void in the market of something between the fragmented amateur hosted apartments and properties versus the hotel product . We are filling this void with a superior product and we ’ re on a mission to create a five-star experience for every guest , at scale .”
“ You need to find flexible ways into the market , and this typically comes from the apartment space where you ’ re able to operate smaller assets . That ’ s where most of the innovation is now happening and also most of the financing and funding goes to .”
Barrier to finance
The tech-based providers may have created a new barrier to entry . In October 2022 it was reported that flexible living startup Flow , had secured $ 350 million from Andreessen Horowitz ; online rental marketplace , Zumper raised $ 30 million , whilst short term rental platform Landing secured $ 75 million fresh equity funding and another $ 50 million in debt . 26
The margins these businesses are demonstrating are setting investors ’ expectations from all new entrants seeking finance , which may prove too high for some .
Evolution
Tom Meertens , COO International at National Corporate Housing predicts that the supply / demand squeeze will slowly ease , compared to now , especially in key economic capitals like Singapore , Dublin , London , and Sydney .
He attributes this to conflicting predictions in the global mobility market . “ 51 % say assignments and relocations business will increase , but 49 % say both will either stay the same or decrease . Much will depend on whether we see financial disruption and whether inflation can be controlled .”
Anyone looking to start a new extended stay business can ’ t simply start with a huge property , says Josef Vollmayr of limehome .
26 . https :// techcrunch . com / 2022 / 08 / 25 / flexible-apartment-startups-gain-more-traction-as-landing-lands-125m-in-debt-and-equityfunding /? guccounter = 1 & guce _ referrer = aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8 & guce _ referrer _ sig = AQAAAK1teugyJ-eW6cBM5hCAlkhw2-igeNgUY80 Q335qXagdgvPNL3uKlBFCTqySa37FtMSPIr62OSQ9OkDOWpM9YoRFxLqQ1DfrnZI65OXv2qJ08 _ mlBBcQHDnaYTr-KBBdU4Qz6sgcT6NMxxo9e6wcXLU 9fKEktpbfmZ-q9YGZMkwD