Serviced apartment sector to recover within 18 months, says Savills

The serviced apartment sector has reportedly seen optimism reach its highest level since the onset of the pandemic, according to the latest Association of Serviced Apartment Providers (ASAP)/Savills sentiment survey. The survey, which predicts recovery within six to 18 months, said 87.3% of respondents were “slightly or significantly more optimistic” about their business outlook over the next 12 months, up from 71.8% in November 2020. Meanwhile, 74.6% of those surveyed said they believe occupancy levels will return to 2019 levels before the end of 2022, hinting at a 6-18 month recovery period. In addition, 81% of respondents said they believe serviced apartments are “better positioned to outperform the wider hotel market”. Key reasons given included: self-contained units, better social distancing ability and more space than in traditional hotels. Respondents also noted that better agile working facilities were also becoming an “increasingly important feature” for serviced apartment providers, in line with employers and employees moving to more flexible working practices post-pandemic. Over 46% of operators expect an increase in staff over the next six months, following a “demand pickup”. Nonetheless, the movement of EU nationals and workers reskilling during the pandemic has reportedly “created some headwinds”, with 47.6% and 38.1% of respondents listing staff availability and staff costs as a ‘slight’ or ‘significant’ challenge to their business over the next three years. Josh Arnold, associate in the commercial research team at Savills, said: “The reopening of self-catered accommodation on 12 April and all accommodation on 17 May, coupled with a significantly improved consumer environment and pent-up travel demand, has boosted operator confidence enormously. “While international travel restrictions continue to pose the biggest threat to the industry in the short-term, many operators are expecting a relatively quick turnaround in terms of demand once restrictions ease.” James Foice, ASAP CEO, added: “Once again, it is heartening to see the resilience in our sector, and that my optimism about a relatively smooth bounce-back seems to be justified. Throughout the pandemic, we have seen a rise in enquiries from both operators and corporate buyers about what accreditation in the sector means, and the reassurances it offers the traveller. “As a small part of the wider hospitality industry, the serviced apartment sector is perfectly placed to benefit from the travel buyer’s need for self-contained and professionally-run accommodation, independently-accredited, when they place their employees.”