Serviced apartment sector to ‘fully recover’ in next eight months

Expectations of further operational recovery through 2022 has led to a boost in confidence across the serviced apartments sector, as 80.8% of operators expect occupancy to fully recover by the end of 2022, reportedly pointing to a recovery in the next eight months.

According to the latest Association of Serviced Apartment Providers (ASAP)/Savills sentiment survey, 57.7% of respondents are already reporting occupancy at pre-Covid 2019 levels.

Overall, 84.6% of respondents are “slightly or significantly more optimistic” about their business prospects compared to the last survey, up from 81% in June 2021. 

ESG credentials are also playing a “growing” role in attracting customers with 42.3% of respondents stating that the ESG credentials of their business were important in driving consumer demand.

However, challenges remain in the sector over the next three years with 65.4% of operators “slightly” or “significantly” concerned with staffing costs, 57.7% concerned with availability, 61.5% concerned with the risk of international travel restrictions, and 53.8% concerned with energy costs.

Marie Hickey, director in the Commercial Research team at Savills, said: “Serviced apartments have been the better performing segment of the wider hospitality market due to their typically leaner operating model and self-contained accommodation, enabling resilience through some of the recent challenges. 

“Operational performance is recovering at pace, outperforming hotels in some markets, and our recent survey shows that operators expect occupancy to recover this year with many already reporting occupancy rates at pre-Covid levels.” 

James Foice, Association of Serviced Apartment Providers CEO, added: “Our members have been telling us for some time that they’re feeling increasingly optimistic about the coming months and years, as restrictions ease and both business and leisure guests return to travel.”