Average weekly rates for serviced apartments during the past
two years have increased moderately to significantly in several key cities,
according to a new report issued by London-based supplier Apartment Services.
In the United States and Canada, two regions that jointly account
for about 63.8 percent of the world's serviced apartments market, which
includes both extended stay hotels and corporate apartments, supply since 2011 has
increased by 10.6 percent, according to the report. While newly constructed extended
stay supply is at a "record low" in the United States, hotels in 2012
added more than 350,000 extended stay units through rebranding efforts. The
U.S. corporate housing industry, in which occupancy for the past four years has
hovered around 88.6 percent, also grew by 2.7 percent year over year in 2012.
From 2011 to this year, the average weekly rate for a studio
unit increased by 5 percent in New York and by 4 percent in Toronto, according
to the report.
In Europe, the world's second-largest serviced apartments
market, the average weekly rate for studio units was up in several cities,
including Madrid (13 percent), Moscow (8 percent), Paris (6 percent), London (5
percent) and Amsterdam (3 percent). Rates decreased in Frankfurt (down 4
percent) and Lisbon (down 1 percent).
In the Middle East, where serviced apartment rental rates
are among the world's highest, the average weekly rate for a studio unit in
Dubai increased by 10 percent, according to the report.
Serviced apartments in some Asian markets during the past
two years have become cheaper, including Singapore (down 5 percent) and Mumbai
(down 2 percent). Other markets have seen increases, including Shanghai (up 3
percent) and Bangalore (up 19 percent), and rates in Hong Kong have remained
flat during that period.
In Australasia, extended stay demand has grown significantly
as companies in the region have been expanding, requiring more travel for their
employees and consultants, according to the report. The average weekly rate at
studio units increased by 22 percent in Sydney and by 20 percent in Auckland
since 2011.
On a global basis, the report indicated that though most
bookings—80 percent—for serviced apartments now are online, suppliers largely have
kept their inventory out of global distribution systems. More than 60 percent
of global serviced apartment inventory currently is not available through GDSs.
"Operators are increasingly frustrated by the
fundamental issues of identifying a serviced apartment within the GDS, having
sufficient inventory to offer through the channel and the short-stay nature of
GDS bookings," according to the report. "Serviced apartment operators
continue to feel pressured to adopt conventional hotel-centric booking
processes to attract transient corporate travelers via corporate programs or
online channels. However, the fees inherent in both GDS and online travel
agencies are often prohibitive for smaller serviced apartment operators."