Worldwide: Serviced apartment agent SilverDoor has released its first market quarterly update report for 2024 which highlights the impact of geopolitical change on global ADRs.
Tensions in the Middle East and upcoming elections for nine European nations, including the UK’s general election and the US presidential election in November, have impacted corporate traveller confidence and the supply chain.
Flight restrictions to a number of Middle East destinations and disruption to Red Sea trade shipping routes, following the Israel-Hamas conflict, have caused significant delays and diversions to services with a direct impact on cost.
Globally, ADR has dropped three per cent to £157.60 (Nov 23-Jan 24) compared to the same period last year. The most significant decline in ADR is the Americas, which has reduced 9.8 per cent YoY from $221.55 (Nov 22-Jan 23) to $199.75 (Nov 23-Jan 24).
By region, APAC ADR has seen less of a drop from S$236.38 (Nov 22-Jan 23) to S$231.27 (Nov 23-Jan 24) – a 2.1 per cent year-on-year reduction. EMEA ADR mirrors the overall global decline and has reduced 3.1 per cent YoY to £160.40 (Nov 23-Jan 24).
Average length of stay has also seen a reduction of 25 per cent overall across all global markets,
Martin Klima, chief customer officer at SilverDoor, said: “Wider geopolitical events are undeniably impacting business and accommodation – the incoming wave of elections worldwide is likely to have particular implications for the travel market. Whilst there seems to be less rate fluctuation and a reduction of rates in some markets, global instability poses the risk of business uncertainty, less travel confidence and unpredictable market conditions.
“As we head further into the year, it will be interesting to watch how the market shifts in terms of supply and demand as corporate clients maintain a keen eye on cost. Certainly, in the Americas, where we have seen the biggest decline in ADR YoY, corporates are turning their demand away from the more expensive hubs like New York towards more affordable locations.”
Klima added: “In contrast to the uncertainty we’re seeing across much of the Middle East, there is continued investment opportunity in the Emirates and India where demand is high and economic growth remains buoyant. Dubai has maintained strong occupancy levels and accommodation requests for Pune are ever increasing with its growing IT sector.”
The full SilverDoor market update is available to read here.
