Covid-19 has had a significant impact on the serviced apartment sector and wider hotels industry. While overall sentiment in the serviced apartment sector has dropped since our last survey in November 2019, as a result of the disruption caused by Covid-19, the recovery outlook remains encouraging, according to the latest Association of Serviced Apartment Providers (ASAP)/Savills sentiment survey. Over half (53.8%) of respondents expect occupancy rates to reach pre-Covid levels during 2021, and nine out of 10 (87.2%) respondents believe serviced apartments are better positioned to recover from Covid-19 compared to the wider hotel industry.

Key points from June 2020 Sentiment Survey in Association with ASAP Business Partner Savills highlights key industry insights as surveyed ac

  • While the Covid crisis has adversely impacted demand in the serviced apartment sector, in line with the wider hotel industry, there are some positives which the sentiment survey has highlighted.
  • As expected, the majority of respondents (76.9%) are less optimistic about the prospects of their business now compared to six months ago.  However, positivity creeps back into the market in terms of outlook for the next 12 months, with 41.2% responding that they are slightly to significantly more optimistic about future prospects.
  • Perhaps the most important theme to emerge from the survey is the recovery outlook, with 53.8% of respondents expecting occupancy rates to reach pre-Covid levels during 2021, with 25.0% confident this level of occupancy will be reached in the first half of next year.
  • To add to this point, 87.2% of respondents answered ‘yes’ when asked if serviced apartments are better positioned to recover from Covid-19 compared to the wider hotel industry.  The primary reason given was due to the configuration of serviced apartments, with better self-containment which supports social distancing and guest safety.
  • 22% of respondents also mentioned professional cleaning and higher hygiene standards in serviced apartments being a reason to support a stronger recovery.
  • Other key reasons include contactless check-in and therefore minimal contact with staff, more space than in traditional hotels as well as better working-from-home facilities for corporate guests.
  • Some operators also suggested the longer average length stay will help drive higher occupancy levels as we move through the recovery period.  Respondents stated that average length of stay in serviced apartments currently stands at 26.8 nights, driven largely by longer-length corporate guests.
  • Respondents suggest that corporate guests currently account for a 68.5% share of demand on average.  However, operators are expecting guest profile to diversify over the next 12 months, with 25.0% of respondents stating the bulk of demand will be split equally between leisure/corporate guests, and a further 15.4% of respondents projecting the bulk of demand will come from leisure guests
  • In terms of outlook, as expected, wider economic conditions and international travel restrictions are deemed to be by far the greatest challenges for operators, with 90.4% and 88.5% of respondents respectively citing these as challenges to their business over the next three years.
  • Enforced social distancing (69.2%) and corporate travel budgets (55.8%) were also listed as key concerns following the Covid-19 crisis.
  •   Interestingly, a far greater proportion of respondents placed a higher importance on online in terms of marketing and reviews – 61.5% of respondents listed social media as being either ‘very’ or ‘extremely’ important for marketing and feedback, up from 51.2% in the previous survey.
  • In addition, 78.8% of respondents stated that online reviews (through OTA’s, Google, TripAdvisor) were either very or extremely important, which suggests that operators’ online profile could support or drive their recovery of over the next 12 months or so.

 

To view the full report of the ASAP Savills sentiment survey results June 2020

 

ASAP Savills sentiment survey results June 2020

 

 

To watch the video presentation of the key findings presented by Josh Arnold from Savills as presented at ASAP Online view below