The landscape of corporate travel and accommodation is continuously evolving, with 2024 bringing its unique set of challenges and trends. This year, while the use of serviced apartments remains a pivotal aspect of corporate arrangements, there are notable shifts which suggest change in corporate needs and market responses. Let’s unravel the 2024 trends in the corporate use of serviced apartments as detailed in the Global Serviced Apartment Industry Report. (https://ariosi.com/gsair/)
Overview of Current Trends in Serviced Apartments for Corporate Use
Business Travel
In 2024, there’s been a slight decline in the use of serviced apartments for business travel purposes. According to the Global Serviced Apartment Industry Report, 62.5% of corporate buyers are utilising these facilities for business travel – this is an 11.18% decrease from the 73.68% recorded in 2023. Despite this drop, the decline rate is slower than the previous year, indicating a gradual stabilisation. In contrast, 42.86% of agents observed more clients opting for serviced apartments for business travel, although this too is a dip from 55% the previous year.
Assignments or Project Work
The usage of serviced apartments for assignments or project work has shown a surprising turn, with a percentage increase to 62.5% in 2024 from 57.89% in 2023. However, despite the aggregate increase, 15.38% of companies have noted a reduction in the use for this purpose, which is a concerning uptick from the 7.69% decrease reported in 2023.
Relocation
The relocation trends exhibit a more pronounced decline. In 2024, 56.25% of corporate employees use serviced apartments for relocation, a stark decline from 73.68% in the previous year. The downturn is echoed in the data indicating that 27.27% of corporates reported a fall in usage for relocation versus 16.67% in 2023. Furthermore, among agents’ clients, 40% have reduced their reliance on serviced apartments for relocations, albeit a slight decrease from 43.48%.
Analysis: Understanding the Dips and Surges
Factors Influencing Declines
The reduction in the use of serviced apartments for business travel and relocation can be attributed to several factors:
● Economic Constraints: Budget tightening across industries can lead companies to
seek more cost-effective alternatives or to reduce travel and relocation frequencies.
● Policy Changes: Corporate policy shifts towards local recruitment or virtual engagement methods could be decreasing the need for physical relocation and
travel.
Reasons Behind Growth in Assignment Usage
Despite the overall downward trend, the increase in utilising serviced apartment facilities for assignments or project work signals a specific need:
● Project-Specific Requirements: Certain industries or projects might necessitate extended on-site presence, making serviced apartments a practical choice due to their home-like amenities and cost-efficiency for longer stays.
Forecast and Strategic Implications for Businesses
As the corporate world adjusts to the post-pandemic realities and other global economic pressures, understanding accommodation trends becomes important. Businesses might need to negotiate better rates with serviced apartments or explore alternative accommodation solutions to align with their shifting priorities and budgets. Furthermore, serviced apartment operators are encouraged to adapt by possibly repositioning their offerings to meet the nuanced demands, such as enhancing facilities conducive to remote work for business travellers or providing short-term flexible leases for projects.
Conclusion
The year 2024 marks a period of recalibration in how corporates utilise serviced apartments, reflecting broader economic and industry-specific trends. While certain usage areas witness decline, there are pockets of growth underscored by specific corporate needs. For companies and agents in the corporate travel and accommodation sector, staying abreast of these trends is essential for strategic adaptation and optimisation of resources.
Source: Global Serviced Apartment Industry Report 2024. (https://ariosi.com/gsair/)