IS YOUR SERVICED APARTMENT
GSAIR 2024 : EMEA 10
IS YOUR SERVICED APARTMENT
BUDGET REALISTIC ?
By GEMMA WILLIAMS Supplier Network Manager , Corporate Housing , Sirva
Here , Gemma Williams of relocation and moving specialist Sirva , explores the value of understanding the cost of a temporary accommodation program , and shares her top tips and strategies for overall program success .
At Sirva , we appreciate how essential competitive housing rates are for our clients , but how do we ensure we are getting the best rate or value ? With some corporates still using 2018 accommodation budgets , it can be challenging to determine how far your money really goes now . In this article we explore :
• Why costs have risen , and by how much .
Credit : Your Amsterdam Housing
• Important factors outside of cost when sourcing corporate accommodation .
• The cost impacts of changing assignee and business traveller needs .
• How to get the best value from your budget .
• The value of educating clients and end users about serviced apartments .
KEY FACTORS INFLUENCING SERVICED APARTMENT COSTS
There are many factors and variables that influence the cost of a serviced apartment , many of which are determined by the global economic landscape . The cost of rent itself , which many not familiar with the complexities of serviced accommodation rates compare to the open , long-term market , is only a small portion of the overall cost . You also have to factor in vacancy rates , furniture , housewares , utilities , Wi- Fi , maintenance , as well as operator , staffing and technology development costs ; costs which are often not visible to or considered by the end user .
Over the last few years , we have seen increased costs from every angle – in the UK for example , glassware and white goods costs were up 13 % in 2022 , an iron was over 22 % more expensive , even hotel costs have increased 14 % 1 . Utility bills have soared with gas prices up 129 % in some regions in 2023 , electricity prices up 67 % 2 . We have also experienced increased costs of living – common items found in apartment welcome baskets such as coffee or tea for example increased
( 13 % and 7 % in the UK3 ) all of which continue to impact the serviced apartment landscape . Global inflation is set to fall in 2024 , but it is not going away and will continue to impact cost models - as a rule of thumb , increases in serviced apartment rates typically mirror inflation . Whilst global economics are expected to continue to normalise and rate increases to subside , the activity of global economics over the past couple of years will likely ensure rates remain higher than they were a few years ago as providers look to recoup losses and recover .
1 https :// www . theguardian . com / business / 2022 / jul / 20 / uk-inflation-what-goods-and-services-have-risen-in-price-and-by-how-much 2 The Global Serviced Apartment Industry Report 2023 3 https :// www . theguardian . com / business / 2022 / jul / 20 / uk-inflation-what-goods-and-services-have-risen-in-price-and-by-how-much