The accommodation sector has finally become united. It’ s no longer serviced apartment versus aparthotel versus hotel sector but an accommodation sector with choice
“ Stays of seven nights plus accounts for 40 % of our total room nights”, says Danny Cockton of Wood Plc.“ Although we use aparthotels extensively, particularly in places like Houston and Dubai, we’ ve not been able to encourage people to use traditional serviced apartments.”
Some travel managers report polarisation between travellers who prefer hotel environments over those receptive to alternatives such as serviced apartments.
Carol Fergus of Fidelity International explains.“ 49 % of our serviced apartment stays are by back office personnel, but we face challenges with getting our front office staff to stay in serviced apartments. Their mindset is still that hotels are better, so it’ s about how we change that mindset to value the better work-life balance and home-from-home feel of apartments.”
- Jan Jacobsen, Accenture
This highlights the opportunity for serviced apartments to grow their share of the accommodation market.
At BP, whilst assignment and relocation bookings are made via SilverDoor, transient travellers book through a TMC.“ The TMC tends to look more at the aparthotel type of property more than traditional serviced apartments in a residential building.” says Richard Eades.
According to Soren Sturup-Toft, Immigration and Global Mobility Lead EMEA & APJ at Databricks, in his organisation, choice of accommodation type is largely budget-driven.“ Those in more junior roles have less money to play with, which drives them towards a cheaper option. In the mid to senior range, people are using corporate housing, few are using hotels.”
Short term rentals & Co-living
Demand is overlapping between serviced apartments, aparthotels, short term rentals and Build-to-Rent as the lines become blurred, with each format borrowing from the others.
Commercial property prices in London have seen varied increases in the last year, with some sources reporting rental values growing by over 3 % annually. However, figures vary by sector, with the office market seeing average prime rental price increases of around 9.4 %. 46
Lower inflation can lead to higher house prices because it improves affordability and stimulates demand in the housing market. When inflation is high, people’ s purchasing power decreases, causing interest rates to rise, so mortgages become more expensive,
“ Interest rates have remained high for operators.” says Steve Lowy of AES.“ In London it’ s been quite a challenge. Things are changing, with service apartments, build-to-rent and student housing overlapping.”
In 2024, Airbnb booked 491 million nights globally, generating $ 11 billion in revenue 47, although there’ s little evidence of short-term rentals being used for anything other than ad hoc work stays for business travel or relocation.
Credit: Cheval Collection
BP employees have the option of a hotel, but there’ s a generation that are happy to have their own space in the bedroom.“ They like stepping out into a lounge, kitchen, or shared area; to sit down and watch a movie, have a takeaway, or get on with a bit of work on their laptops, but in an environment where they’ re amongst friends or colleagues.”
46 carterjonas. co. uk / commercial-market-outlook
47 travelweekly. co. uk 19