The second Quarterly Market Update report for 2024, was released last week by SilverDoor, the worldโs leading serviced apartment agent. The findings detail that shifting political landscapes and legislation, particularly in the US and India, alongside increased demand for hybrid working, are key drivers for growing demand for corporate travel globally…
Bills and ballots to support US and India travel
Earlier this year, US President Joe Biden signed a bill to assign $50million to reduce passport backlogs and visa wait times. Indeed, the backlog for first-time visas has been estimated to cause delays of well over a year โ up to 400 days in some cases. The cost to the US economy is in excess of $12million in lost revenue from travel spending last year alone. The new bill has been warmly welcomed by the US Travel Association and comes as the US, alongside Canada and Mexico, prepares to host a marked increase in visitors and demand ahead of the FIFA World Cup in 2026.
In India business travel spending is expected to reach up to $38billion this year, as its General Election and the largest democratic event in history is currently underway. 969 million people are eligible to vote in a region that is seeing significant economic growth and likewise growth in demand for corporate housing and accommodation rates. Any resulting governmental changes are expected to reflect the demands of a younger workforce generation with further shifts in the corporate landscape to follow in support of key destinations including Bangalore, Pune and Mumbai where investment also continues to grow.
The hybrid / locale mix drive growing demand for corporate travel
For many business leaders the shift back towards more office working continues to gain traction. This is shown in recent studies* outlining that whilst 71 per cent say hybrid working is important.ย Likewise over half (55 per cent) of 18-30s prefer it. The popularity of the hybrid model is reflected in the departure from enquiries focused on home-working capabilities towards office proximity as a going concern.
For those corporates investing in serviced apartment accommodation, it is the amenities that the local area offers and their impact on that community that are also influencing and steering demand. These can include the ability to register in a new city whilst staying in serviced apartment before moving to permanent residence as part of a relocation programme. This is very helpful for the traveller when, for example, they need better access when setting up a local bank account.
From an ESG perspective, corporates are also increasingly keen to work with those property providers who demonstrate they are working with local planners. This is to ensure that any new build projects also support regeneration projects such as playgrounds and gyms for the benefit of not only their guests but also the community around them.
ADR fluctuates in core markets, ALOS down, lead times hold steady
Globally, booking data shows an expected YoY reduction in average daily rate (ADR) by the end of the year in key locations including London, Chicago and Singapore. This in turn follows the current upward trend, whilst average length of stay (ALOS) has seen an 18.8 per cent decline by nine nights YOY, from 48 nights down to 39. Across key regions, ALOS is 35 nights in EMEA, 59 nights in the Americas and up to 63 nights in APAC.
Alongside the shifts in ADR and ALOS, lead times have held fairly constant at 42 days globally, compared to 41 days at the same time last year. EMEA has the shortest lead times of 40 days, compared to 49 days in the Americas.
Al Butler, Senior Client Programme Manager, SilverDoor comments, โItโs reassuring to see governments in several key markets making changes to support inbound travel, like the US visa bill. I’m also encouraged to see continued investment into developing regions in India, which will help to boost travel volumes for the second half of 2024. With change comes a need for agility, so it is important to ensure demand and supply arenโt at a disconnect as much as possible. In India particularly, our focus is on building and extending our portfolio. This will benefit many of our clients as we are keen to safeguard and protect against any potential shortages. Negotiating reserved housing agreements is proving a popular tactic.”
โAcross the board the focus on sustainability continues. For those businesses keen to encourage a return to the office, albeit a hybrid one, demand for accommodation that offers shorter commute times remains high. Not only does it fit the bill in terms of reducing emissions and supporting employee wellbeing and a better work-life balance, it also means a hybrid model is significantly easier to achieve. Time, as ever, will tell how the hybrid model evolves in the future and the impact that has on the demand for corporate housing from the traveller, and design and supply from developers.โ
The full SilverDoor Market Update is now available to read.
* 2024 IPSOS UK Market Research Reportโฏ
About SilverDoor
SilverDoor Apartments is the worldโs leading provider of serviced accommodation for business travel. Bringing together an inventory of over 2,600 property operators into one easy to manage relationship.
Global teams of experts source accommodation exclusively for corporate clients and utilise their wealth of experience to find the most suitable options and secure the best rates; industry-leading technology perfectly supports its multi- award-winning service model.
