Worldwide: Serviced apartment agent SilverDoor has released its final market update report for 2023, revealing a decline in ADRs and growth in economy accommodation.
Globally, average daily rates have fallen by 7.9 per cent in Q4 2023 to £159.71. This is particularly prominent in EMEA, with one-bedroom apartments in cities such as Dubai (£115), London (£177) and Amsterdam (£155) all expected to enter 2024 at a lower rate compared to last year.
The only exception is Paris which has seen a continued rise in rates and demand ahead of the Olympics next summer. Rates are expected to exceed £400 per night throughout July and August.
Across EMEA, the average length of stay is down by one-fifth in Q4 compared to Q3, and lead times have also shortened by 12 per cent.
Over in the Americas, cities such as Chicago and Dallas are expected to drive corporate MICE demand into 2024. ADRs in Dallas currently sit at £76, which is forecasted to increase to £110 by summer 2024.
In APAC, India has overtaken China as the world’s largest population and as a result, there has been an increase in business service and infrastructure investment, leading to increased demand for short-term housing from the corporate sector. Destinations include Bangalore, Mumbai and Hyderabad, with average rates in Mumbai up by nearly one-third to £155.02.
This is in contrast to China which has seen a 21.9 per cent decline in ADR to £125.53. Lead times across APAC have increased by 14 per cent.
Serena Dines, group head of revenue at SilverDoor, said: “Whilst there is a case for cautious optimism in terms of the global economic outlook it is not without its challenges as the seasonal decline in travel and rates indicates. Operators have to remain competitive into the new year in order to secure the demand and bookings from corporates. Not just in terms of price but also in terms of the facilities available, location and increasingly their sustainability credentials, whilst also balancing the decline in lead times.
“Looking ahead to 2024 it will be interesting to see how the growth in the supply and demand for more economy-based accommodation will affect rates more broadly into the new year,” she added, “Will they remain at lower levels or will we see an increase as demand returns again? We look forward to what we hope will be a more positive economic outlook globally, beyond the key growth market of India.”
