SilverDoor's Market Update is a comprehensive review of the global travel landscape using our own booking data, wider economic context, and our experts' experience and predictions to build a picture of serviced apartment trends worldwide. Reflecting on the past quarter and forecasting for the year ahead, the report advises corporates on rates, supply, demand and traveller preference to inform booking practices.
SilverDoor captures more than 127,000 datapoints from an average of 593,000 enquired room nights each quarter, the largest and most extensive sets of data available in the sector. This means we can provide the most accurate trend commentary and forecasting for those in the know across the business travel and mobility industry.
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|SilverDoor Snapshot
It’s no easy feat to craft a business travel and mobility policy that keeps assignees safe, makes savings, and ensures compliance in unpredictable economic and political conditions – we explore how combining transient and extended-stay buying power can future-proof your programme.
Shifting political landscapes and unpredictable capital markets will govern how, where, and why we are travelling in 2025; how will they affect you and your business?
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|Tapping into transient travel – the barriers and the benefits
Some clients have noticed a rise in hotel rates in response to the heightened demand for hotels in cities like New York and Edinburgh that enforce tighter short-term rental legislation, so we have started to see more transient serviced apartment demand this quarter. Indeed, global enquiries for stays <7 nights were up 64% YoY in 2024 and up 17% YoY for stays <1 month.
Traditionally, serviced apartments have been the obvious choice for extended stays and relocations, but hotels held the edge for shorter trips. Despite many travel policies outlining that a serviced apartment should be used for stays of 5+ nights, this historically has been tricky to enforce in practice. Now it seems serviced apartment demand and usage are growing for short stays, and whilst this recent trend may be driven by corporates seeking a more competitive price, there are many more drivers for the shift towards booking serviced apartments for transient stays.
What are some of the corporate drivers to adopting serviced apartments for transient travel?
Assignees travelling domestically for project work, such as an engineer or auditor, might choose to stay in corporate accommodation for weeknights then head home for the weekend, or be scheduled to work one week on and one week off. Whilst these individual stays might be considered short, a serviced apartment is the more comfortable choice for an assignee staying in the same location for an extended period.
Or an assignee might prefer to travel with their family or pets (which might even negate the need to segment the project into 5-night stays as above), in which case the space and flexibility of a serviced apartment is better suited. While the hotel market is slowly waking up to the pet-friendly demand, serviced apartments are innately better for travelling with a pet, and operators have long appreciated how much better guests feel being away from home if they can have a piece of home with them when they’re away.
There are many more assignee-specific drivers to the adoption of serviced apartments for corporate travel but broadly speaking, the wellbeing benefits of serviced apartments for business travellers (more space, independence, autonomy, and an overall healthier lifestyle) are becoming more widely known. Perhaps this is also thanks to the debunking of some myths about serviced accommodation properties not offering the same onsite amenities as hotels.
The barriers to business travellers in transient programmes choosing a serviced apartment in the past, though, include less familiarity with the accommodation model and its benefits, fewer serviced apartment options available particularly in tertiary locations, and a desire to retain and build hotel loyalty points. Now, driven not only by more competitive pricing but also by increased awareness amongst corporates of the benefits of the serviced apartment model and an overall stronger global supply chain, bookers are opting for serviced accommodation over hotels for both extended and transient corporate accommodation requirements.
An important conversation that ties in nicely with this uptick in transient demand is the power of combining the business travel and mobility functions within an organisation. Our experience highlights that these functions can often be isolated in two separate silos rather than working together to leverage combined spend and volumes, and we’ve had recent success aggregating the two for clients in a combined programme.
Combine business travel and global mobility functions to benefit from a collective buying power.
By bringing the business travel and mobility arms of your organisation together, you benefit from a collective buying power that’s far more influential in terms of negotiated rates and terms. You can then build your serviced apartment programme and policies into one simple system: tracking aggregated spend, savings, and traveller data from both business travel and mobility, and using it to refine corporate travel processes and experiences in general.
This is a clear call for more and better online connectivity, with SilverDoor’s Business Development team noticing an increased interest in OBT capability to service both short- and long-term stays from clients saying they want to avoid using multiple booking tools. Couple this with the growing usage of serviced apartments for transient business travel rather than just their traditional use in mobility, it’s further proof that combining the two functions is the logical strategy, one that we predict will only keep growing in momentum.
|EMEA market roundup: how might the economic backdrop here influence serviced apartment trends going into 2025?
The Financial Times has revealed that the professional services sector grew 3.9% between June and September, compared to the 1.3% growth seen in the wider UK economy. The research highlights the strength of UK business to business spending in 2024 compared to consumer spending, particularly in the scientific R&D (research and development) and legal industries where English law is recognised as the international standard and used commercially by international corporations. Already, we’ve seen a rise in the volume of enquiries from the professional services sector and expect this upward trajectory to sustain into 2025.
Over in Iberia: while operators in Lisbon seem to be working to widen supply, with several new properties opening and planned, SilverDoor account managers have experienced limited availability in Madrid this quarter. Spain has been working hard to position itself as a centre for innovation, not least with its startup law designed to promote the creation and growth of startups, as well as the introduction of its digital nomad visa which is a residence permit allowing non-EU citizens to live and work remotely in Spain. Both represent positive opportunities for non-EU businesses hiring or moving remote talent, but may very well be the root of the heightened demand and availability squeezes in Spanish business hubs like Madrid.
How do governmental changes in the UK influence other EMEA locations?
Feedback from operators in London highlights that clients from the Middle East (namely from Qatar and Dubai) are opting to travel into French and Italian business hubs rather than the British capital since Brexit has made it more difficult to reclaim tax for stays in the UK. SilverDoor has noticed softer London pricing, but this could also be down to seasonal competition to fill rooms over quieter winter months. Our Dubai team also noted some relocation enquiries from high-net-worth individuals in the UK looking to avoid the impact of increased capital gains tax (10% to 18% increase for the lower rate and 20% to 24% increase for the higher rate) in anticipation of and reaction to the Autumn Budget announcement.
Rates are high and inflexible across the Middle East on the approach to Christmas and New Year’s Eve, with practically no room to manoeuvre on rates and surcharges. Abu Dhabi is particularly impacted by sky-high rates at the moment, with bookings also being subject to nightly supplement fees when dates fall over events like the F1 and IDEX (International Defence Exhibition & Conference) at the ADNEC. The demand is such that if our bookers don’t pay the rates, someone else will be willing to, so corporates should expect peak prices until the market starts to soften in early March.
The Saudi Vision 2030 project continues to transform the economic landscape in KSA: creating consulting opportunities, developing the infrastructure to promote domestic travel, growing the financial services sector, and building foreign business partnerships. Indeed, we’ve heard from professional services clients that KSA has gone from once being a fairly obscure location for business activity to now being a key location for them.
Corporates booking into KSA should consider how to manage the day-to-day impact of such rapid growth.
One challenge as a consequence of this rapid growth is that the infrastructure isn’t developing quite as quickly as the demand. An easy way to spot this is the volume of traffic on the roads, so corporates must consider commute times from booked accommodation and expect delays when driving.
KSA is also up against a skills shortage, another challenge born out of the region’s rapid development. The traditional schooling system hasn’t caught up to effectively prepare the local workforce for evolving modern labour requirements, and the Kingdom’s Minister of Investment cited earlier this year that human capability and education are the most important areas to invest in if the region wants to meet its ambitious growth targets. This lack of schooling may impact families relocating to the area and cause delays to an expat’s transition.
|Americas market roundup: how will a change of administration here shape the serviced apartment landscape of early 2025?
Intern group demand in the US is already strong with group bookings already placed up to 10 months out into Chicago, Montreal, Houston, and Philadelphia. On the whole, though, enquiries are slowing as they usually do during holiday season as businesses review their year-end performance and finalise 2025 budgets.
Stock prices rose and the US dollar strengthened as the US elected their new president in early November but, as Trump isn’t inaugurated until mid-January, the real impact of the administrative change remains speculative for now.
Stephen Homsey, Vice President - North America, considers the potential impact of a change in US government:
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There are plans to enforce global trade tariffs on partners including China, Canada, and Mexico – the country’s top three trade partners. Inflation may well rise as the cost of these tariffs will likely be passed on to the consumer with higher prices for goods imported from these key markets. |
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Other plans include a harder-line immigration policy and businesses may be wary about how they will retain and hire foreign talent next year. Visa delays, visa denials and travel bans are all likely in 2025, so corporates may have to reduce – or at least carefully manage – travel into the US. |
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Planned tax cuts might be good news for American companies who would be left with more cash to invest in their growth and business activities. This may well boost domestic US corporate housing demand to counter the potential reduction in corporate interest from foreign businesses. |
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The incoming US administration is focused on deregulation which would make it easier for operators to build and open new properties, broadening the choice for corporates and leading to competitive ADR trends. The potential challenges in securing work visas for foreign workers, however, seems at odds with this boost to the US corporate housing sector, so we will keep an eye on post-inauguration movements. |
With a still fairly new Mexican president and the 2025 Canadian federal election already inspiring governmental changes, the world watches on to see how these nations will work together, or not, to govern the Americas. One such change is the Canadian government’s recent pledge to reduce the number of temporary foreign workers in its population from nearly 7% to 5% over the next three years. This would be a reduction of around 65,000 people and early methods to achieve this include limiting international student and post-graduate work opportunities, and ending low-wage temporary positions in communities with an unemployment rate of 6+%.
Canada has also set out to reduce Spousal Open Work Permits (SOWPs) by 100,000 over the next three years by limiting work permit eligibility to spouses of foreign workers in management/professional occupations or in sectors with labour shortages. These challenges may cause businesses to reconsider moving their talent to Canada, but with the newly elected US president promising to be tougher on immigration, North America might not be the alternative location businesses are looking for.
Overall, we expect a quiet start to 2025 across the Americas as businesses wait for a clearer governmental direction.
|APAC market roundup: what are the growing and emerging markets for serviced apartment growth here?
The spotlight is still on India as a key investment market: the quality and volume of serviced apartment supply hasn’t yet caught up with corporate demand, and both agents and bookers are waiting for a pricing ‘norm’ to form in the immature market. Operators in Bangalore, for example, have reported high occupancy this quarter resulting in abnormally high quoted rates, one provider citing group bookings for year-end business reviews and seminars driving demand.
It's still the electronic manufacturing, power and infrastructure sectors that lead the Indian stock rally charge – according to the Economist, one in five households today hold shares, compared to one in 14 just five years ago. Investors have seemed more cautious recently as India’s growth cooled in the summer, but the opportunity for serviced apartment growth in the region is still strong. We recently worked with a Japanese operator, providing apartment criteria directly from a client booking into the area to guide the construction and furnishing of a new property in Hiroshima. With the right collaboration, expanding stock in tertiary markets can be successful for all stakeholders and a strategy SilverDoor Asia will look to bring to other markets like India in 2025.
The momentum remains for corporate interest in India, but Vietnam has emerged as a talking point in recent months.
Vietnam is forecast to exceed economic growth predictions and end the year with a 6.1% growth rate – the fastest growing economy in southeast Asia. Driven primarily by the industry, services and manufacturing sectors, the country’s fiscal focus on exports and foreign trade in recent decades is paying off.
Vietnam’s travel and tourism market has had a record year so far – accounting for 7% of its overall economy – and, whilst the hotel sector is leading the market for now, there’s a huge opportunity here for serviced accommodation investment. As the economy continues to grow, so too will the corporate travel demand as companies look to capitalise off the exciting investment landscape; KPMG citing energy, manufacturing and real estate as key investment sectors that we’d expect might see a boost in bookings for construction or other project work.
Another growth market where we’re seeing more demand is Malaysia, notably with intern groups into Penang. Booming sectors include technology, property and construction, with test centres and training facilities in the area driving the demand for intern and trainee group bookings. It can sometimes be a challenge to navigate quality assurance in emerging tertiary locations where the health, safety and quality standards that global businesses expect may not be regulated as tightly; whilst this is noticeable in some Malaysian areas, it’s also seen in markets like India, Sub-Saharan Africa and even some European cities.
In these locations, we encourage a degree of policy flexibility that accounts for and can manage regional variations. Working with an agent can provide detailed region-specific insight, close relationships with operators, and the ability to craft a programme that’s both pragmatic and still safely compliant; this way, businesses with global requirements can retain similar levels of choice while allowing for local market variances between options.
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If you would like specific topics or trends to be discussed in a future SilverDoor Market Update, get in touch with us at [email protected].
