Last year, global business travel spending reached approximately $1.3 trillion. Business travel is booming. It doesn’t look set to slow down either, with it forecasted to increase to around $1.6 trillion within the next three years. In our increasingly fast-paced world, our requirements of business travellers is increasing. Along with this trend, it stands to reason that business travel accommodation options need to increase. However, this doesn’t just mean a boost in hotel rooms, which don’t always meet the specific needs of the business traveller.
Serviced Apartments for Business Travellers
Along with the increased amount of business travel, we are seeing a boom in the serviced apartment market. Whereas just a decade ago, serviced apartments were few and far between, thought of only for medium to long term relocations, they are now a viable option for all business travellers thanks to the choice available. Business travellers have considerably different needs from the leisure traveller. They need a greater degree of flexibility and different amenities. Serviced apartments are fully furnished apartments and flats which have amenities which are similar to that of a hotel room (housekeeping and concierge for example) alongside additional benefits of their own. Typically a serviced apartment will offer in the region of 30% more space than a hotel room – invaluable for the business traveller who needs space to work and rest. They also provide a more home-from-home experience, with furnishings and amenities much like those you would expect in your own home, and therefore are more appealing to the business traveller who spends periods of time ‘on the road’. In addition, fully equipped kitchens allow for reduced business meal expenses and a more flexible approach.
The Rise in Serviced Apartments
The boom in the number of serviced apartments, globally, but particularly in capital cities such as London, has been fuelled by the rise in popularity of this form of accommodation. This sector of the hospitality industry is growing at a pace we’re not seeing elsewhere. The fundamental drive behind this is the increase in business travel, combined with the desire of businesses to find more cost-effective solutions that also work on a supportive level for their employees. Business travellers are increasingly wanting their family to be able to join them on trips, and the boom in internet-based working means business travellers need facilities and space to work in their accommodation with ease. It’s not just our hunch either. Room occupancy rates typically average around 80%. However, serviced apartment occupancy beats hotel occupancy hands down. Corporate travel organisers are increasingly turning to serviced apartments over hotel rooms. We’re seeing increased demand, and increased occupancy.
Why Are Serviced Apartments Proving More Popular Than Hotels?
The predominant reason that we at London Serviced Apartments think that serviced apartments are outstripping hotels in the popularity stakes is simple: cost. It is the cost-effective nature of serviced apartments, combined with additional factors such as space and increased privacy, which is driving their popularity. In our experience, serviced apartments will cost you in the region of 20-30% less for an equivalent standard of accommodation, as well as delivering an increase in space. That’s something which hotels are going to find hard to compete with. The result is that more and more serviced apartments are coming onto the market, particularly in the big cities, to meet the demand.
Is This Just Due to Airbnb?
The rise of businesses such as Airbnb have played havoc with industry data in recent years. However, the growth in the availability and popularity of serviced apartments is not solely down to the access made possible due to sites such as Airbnb. There are some distinct differences. Primarily, serviced apartments are different to accommodation offered by Airbnb because they aren’t simply apartments being leased by owners, but specifically developed as traveller accommodation. In fact, as Airbnb finds itself restricted in many cities around the world, such as New York and Berlin, serviced apartments are simply moving in to the market gap.
Investing in Serviced Apartments
This means that there is a ripe opportunity for investing in serviced apartments as a hospitality business strategy. Investors are bound to be attracted by the growth in the sector. This is further good news for the serviced apartment user. With increased investment in the sector we’ll continue to see improved choice and higher standards with fair prices kept in check by increased supply. To discover for yourself why serviced apartments are so popular, book your next London stay in a serviced apartment, be it for business or pleasure, and you’ll never travel in the same way again.