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Sentiment Tracker Survey( November 2016), which track the changes in operator sentiment compared to their August survey. The key findings for the UK serviced apartment sector were:
Overall, operators are more optimistic about business for the next 12 months than they were in August.
Consistently strong occupancy levels, averaging 82.6 % in the 12 months to October 2016, have enabled Edinburgh hoteliers to leverage rates across the majority of segments, illustrated by the increase in the achieved rate in the corporate(+ 6.4 %) and leisure(+ 14.9 %) segments this month, but it was the Best Available Rate segment which achieved the biggest increase in October, at 12.2 %, to £ 120.65.
The strong demand for hotel accommodation is a direct reflection of the continued success of Edinburgh Airport, which handled 1.1 million passengers in October, a 12.5 % year-onyear increase on the same period in 2015, of which the number of international passengers increased by 23.6 %.
Despite year-to-date increases in both payroll(+ 6.5 %) and overheads(+ 1.4 %), a 7.3 % increase in total revenue has helped Edinburgh hoteliers record profit growth of 9.8 %, to £ 53.89.
Serviced apartment operators optimistic for 2017
The Association of Serviced Apartment Providers( ASAP) and Savills have released results for the sector from their Operator
28 % reported they are accelerating their expansion plans( compared to 13.3 % in August); the majority( 60 %) were making no change to their existing plans, but an increased proportion of 12.8 % were scaling back their plans
The operational outlook is mixed, with the general trend suggesting that operators expect both year end occupancy and ADR to be down on 2015, which is reflected in the latest STR data for the sector( UK occupancy down 2.6 % at end October, year to date); however, this is an improvement on August: 30 % of operators in November expected their 2016 occupancy to be up( compared to 20 % in August)
James Foice, Chief Executive of the ASAP comments:
“ It’ s encouraging to see that, in spite of the operating challenges we’ ve experienced in 2016 in terms of occupancy and ADR, operators are now at the end of the year feeling more positive in terms of the outlook for business performance for 2017 than they were back in August. And it’ s especially good to see over 28 % of operators reporting that they are accelerating their expansion plans. The pipeline of new serviced apartment / aparthotel developments for the UK in 2017 looks very strong, with over 2,000 units due to open next year.”