TAS report reveals exponential growth and investor interest in serviced apartments

The Apartment Service (TAS) has published the 2015- 2016 edition of The Global Serviced Apartments Industry Report (GSAIR).

Luxury serviced apartment interior
The new report shows 14 per cent growth in supply chain globally, exponential corporate, relocation and online demand and increasing investor interest in the sectorKey findings
  • 748,437 serviced apartments worldwide operating in 9,875 locations
  • Inventory up 14% year-on-year and 80.1% since 2008
  • Apartment usage for assignment/project work growing in 72.73% of companies
  • Distribution widening – 75% of operators now receive bookings from OTAs
Compiled by Travel Intelligence Network (TIN) for The Apartment Service, the new edition is the most detailed yet, including over 30 interviews and findings of surveys conducted amongst 2,500 serviced apartment operators, associations, buyers and agents.The report highlights that the serviced apartment industry has reached a level of maturity that is showing future growth of supply through a multiple of factors, including sustained investment in delivering new products, continued opportunities in educating buyers and driving awareness of the sector through summits, conferences and thought leadership.Supply
Global supply of serviced apartments has increased by 14 per cent since the previous edition of the report which was published in June 2013.Charlie McCrow, CEO The Apartment Service believes “the market doubled over the past 12 years” and forecasts it will double in size again in the next 4 years.There are now 748,437 serviced apartments worldwide – an 80.1 per cent increase in just seven years.  GSAIR 2015-16 highlights the significant interest from institutional property investors as a source of considerable future growth in inventory across the globe. 69.12 per cent of operators say they will increase the number of apartments in existing locations over the next two years, predominately in Europe and Asia.  Brand
Global networks and partnerships, such as the TAS Alliance launched in February 2014, have provided a platform for all brands and operators to showcase their products. These alliances are helping the largest and the smallest operators to gain access to global booking channels and global serviced apartment programmes worldwide.For the first time, the GSAIR has ranked the leading serviced apartment brands by product and consumer ratings, as The Apartment Service’s CEO Charlie McCrow explained, “There has been much said and written recently about defining the sector so we wanted to assess whether the variations in amenities provided by some of the leading brands actually reflect what travellers actually want. We compared these to aggregated customer review scores on Trip Advisor and Booking.com.”“The theory is that greater product consistency and growing brands will drive consumers to base their purchasing choices on the points of difference between operators’ brands. However we believe that part of the appeal of serviced apartments is that no two products are ever completely identical,” says McCrow.Demand
As serviced apartment supply has increased, so has the product’s popularity amongst corporate and relocation travellers. GSAIR predicts that the millennial travellers will be enthusiastic adopters and will drive future design, content and distribution.81.48 per cent of survey respondents prefer serviced apartments to hotels, compared to 78.1 per cent in 2013.  71.6 per cent cite the ability to cook their own meals or entertain, as a factor, 66.6 per cent privacy and 58.3 per cent the ‘overall’ serviced apartment environment.A competitive market rate remains the primary decision making factor for 75.4 per cent of corporates, followed by total cost of stay, duty of care and traveller/assignee feedback.Opportunity
GSAIR highlights a number of challenges that are viewed as opportunities for our sector.“Although the challenges our industry faces are not new, the emphasis is definitely changing,” commented Jo Layton, MD Group Commercial Sales at The Apartment Service.Ms Layton added “Over the last 18 months since the 4th edition 2013–2014 GSAIR report – the serviced apartment industry has continued to grow exponentially.“The industry is enjoying sharing ideas, information and resources through many vehicles, and continues to drive conversation, debate and opinion that has moved the industry forward with subjects from quality to service; from security to local legislation and from sales to distribution – all the time keeping the stakeholders connected through active conversation.“I am excited to be part of The Apartment Service team distributing this current edition, it is definitely the most comprehensive, globally focused and accessible report so far.”To see Jo Layton and other global mobility experts in conversation with Re:locate click here

Related Articles