SilverDoor's Market Update - September 2023

SilverDoor's Market Update - September 2023

SilverDoor's Market Update - September 2023
19th September 2023

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 Snapshot

Bookers are increasingly seeking evidence of sustainability commitments and progress through reporting, compliance, and accreditation. Cost reduction, however, remains a corporate priority, with global average rates decreasing in response to this budget scrutiny. Overall, strong booking volumes indicate continued growth in the temporary accommodation sector.



Cost cutting icon - scissors cutting dollar| Cost reduction: Cost remains the top priority amongst travel/relocation managers
with bookers keen to determine how to receive the best value for money in their programmes.


Property prices icon - price tag on a building| Pricing and rates: We’re seeing rates come down from their mid-year peaks in EMEA and the
Americas, whilst in APAC rates are forecast to end the year higher than they started.


Sustainability icon: leaf around the globe
The sustainability of a given property is a consideration but not a
deciding factor in corporate booking habits, unless the costs are comparable.

|Cost Reduction 

Pricing is still the ultimate decider in bookings as well as corporate procurement, a trend that sometimes butts heads with suppliers still trying to regain profits lost during the pandemic and grapple with rising running costs, and buyers often coming to the table with lower predicted volumes.

Financial pressures and tightening budgets have slowed sector recovery slightly compared to the return to travel boom of 2022: a recent GBTA report predicts a 32% growth in business travel spend for 2023, 15% less than the 47% rise from 2021-2022.

A surprisingly resilient global economy escaping recession has allowed most markets to continue an upward trajectory, but the future of the sector is based on such new, unresearched developments (AI technology, sustainability innovations, attitudes to remote working, to name a few) that it’s hard to predict how travel volumes will move in the long term.

Currently though, nothing is influencing buyers more than cost – GBTA also concludes that 3 in 5 travel managers (62%) cite cost-focused metrics as the most important measures used to evaluate their programme’s success this year.


|Pricing and Rates

A general levelling of rates is expected as we move out of summer high season for much of the world.

Global average daily rates (ADRs) for 1-bedroom apartments have decreased 20% YoY, aligning with and perhaps in response to a higher degree of cost scrutiny amongst corporates.


Graph to show average nightly rates for EMEA


In EMEA, rates are stable and offering a higher degree of predictability compared to post-pandemic pricing. EMEA ADRs are down 25%, but in major cities rates are similar YOY suggesting we have regained a ‘standard’ annual rates outlook.

Rates are expected to steadily decline as we move into the autumn/winter in Amsterdam, London, Dublin and Paris – welcome news for the cost-conscious corporate traveller. Intense summer heat easing off and the accessibility of Golden Visas in the Middle East are contributing to demand picking up and a forecasted steady increase in Dubai rates.


Graph to show average nightly rates for APAC


Rates in APAC have been more volatile over the summer than in EMEA, with dynamic peaks and troughs in Hong Kong, Melbourne, Singapore, Sydney and Tokyo. Rates in Tokyo and Hong Kong have dropped since the highs of our last update, with Tokyo experiencing a 26% drop in rates since last quarter.

Our booking data showed overall climbing rates in Hong Kong (albeit with frequent spikes and drops), but they have dropped since last quarter and we forecast up to a 19% drop by the end of the year. A weak property market with low new development investment, as well as weak Chinese exports influencing large supply chains to be moved to other southeast Asian markets, might explain this decline.

Rates in Singapore and Melbourne have been the most stable this summer and are expected to continue on a steady plateau moving towards the end of the year. However, with 77% of businesses planning to raise travel budgets in India (Source: Skift), we may see some price hikes here to match an influx of demand.


Graph to show average nightly rates for USA


Rates across America and Canada have been stable over summer and are forecast to continue level this quarter. New York’s rates, whilst still the highest on our system in the region, do seem to have stabilised – reducing by 19% since November 2022.

Rates in Toronto have remained largely unchanged over the past 12 months, they also only experienced a marginal 6% rise from July to September.

Chicago has experienced more dynamic rates recently with a 40% spike in July, perhaps linked with the city’s current high real estate prices compared to the rest of the country. However, our booking data does seem to suggest a drop of up to 52% by the end of the year.



As cost steers corporate decision-making, the sustainability of a given property is a consideration but not a deciding factor, unless the costs are comparable.

Buyers are increasingly interested in understanding green credentials, weighing up the environmental impact of their accommodation choices, and seeking reporting and analytics solutions to benchmark the impact of their travel choices. Ultimately, though, actual buying decisions are still coming down to which option is most cost effective rather than greenest.


|Booking Habits - Lead Times

In our last update we saw a notable extension in APAC lead times, while in this quarter, lead times in both APAC and the Americas have remained more or less the same compared to the same period last year (June-August). Quarterly average lead times are 1 day longer in APAC (34-35 days) and 2 days shorter in Americas (35-33 days).

Lead times for Q3 in EMEA, however, have increased 21.5% compared to the same period in 2022 (from 27 to 33 days) and the annual average so far has extended by a week (up 24.1% from 29 to 36 days). The ongoing disruptions to rail and air travel across the Eurozone could well be urging corporates to plan better and avoid possible financial implications of cancelled trips. Longer lead times also demonstrate bookers allowing for longer selection and negotiation processes to ensure the best rates and apartment suitability.



Quote about EMEA apartment trends

“EMEA has been relatively steady for the time of year, except Amsterdam where rates are remaining high. Paris has already started to anticipate the increased demand the Olympics will generate next year: rates are starting to increase and properties are already filling up.

We recommend booking sooner rather than later for Paris trips anticipated for July – September 2024.” – Amy Pammenter, Head Account Manager

“2023 in the Eurozone so far has been stable in terms of pricing, with average rates dropping 11% for Q1 and a further 3% in Q2. Latest trends forecast rates to continue stabilising in Q3. We noticed a lowered relocation demand in destinations like Germany, Spain and Ireland during the second quarter, but direct bookings from corporate clients and the use of TMCs have continued to pick up.” – Wesley Shelling, Group Head of Operations.

“There has been a recent shift in the UAE towards western operating schedules. Notably, it is far more common for businesses to operate during Ramadan and work to the western Monday-Friday work week/Saturday-Sunday weekend model. This has started to cause periods of low availability and higher rates for corporate extended stay guests in the region, more in line with such periods in other key western destinations.” – Kurtis Murphy, Head Partner Account Manager, EMEA.


Quote about APAC trends

“The majority of new supply in construction or planned for 2024 in Singapore is luxury accommodation, so we may start to see an overall ADR increase with the increase of higher-priced inventory. Limited flight capacity and delays in visa/passport application in Singapore impacted demand in the first half of the year, but we have started to see an increase in extended-stay enquiries for September-November.

Properties that require minimum stays of 28 days+ experience slower demand, but seasonal/leisure events in the region continue to drive occupancy and operators are likely to raise rates around these hotspots.” – Sophie Brinsley, Vice President - APAC


Quote about Americas pricing

“By expanding our <30-day minimum stay inventory in several cities, we have seen a 14% increase in bookings for stays under 30 days. While this short stay market grows in some areas, other cities are working harder than ever to limit short-term rentals. Over the years, several cities have implemented legislation that tightens rules around short-term rentals.

The theory is that short-term rentals are driving up the cost of housing in major cities, so cities such as New York have implemented strict local law to limit their operation. I expect this will have limited impact for stays of 30+ days, but will compel operators with hotel licenses to increase rates due to a sudden reduction in supply with sustained levels of demand. It may be worthwhile for travellers and bookers to consider making the most out of their travel and look at longer stays with lower rates.” – Stephen Homsey, Regional Head of Americas


Answer this month's quick poll! What matters most to you when booking business travel accommodation?

  • Unit size
  • Cost
  • Proximity to workplace
  • 24-hour reception
  • Sustainable credentials
  • Unit quality
  • Other

 Have your say here.


|Events impacting supply, demand and pricing

  • US Open Tennis – New York: 28 Aug 23 – 10 Sept 23
  • Broadway Week – New York: 4 Sept 23 – 17 Sept 23
  • UN General Assembly – New York: 5 Sept 23 – 19 Sept 23
  • Fashion Week – New York: 7 Sept 23 – 13 Sept 23
  • Men’s Rugby World Cup – France: 8 Sep 23 – 28 Oct 23
  • Oktoberfest – Germany: 16 Sep 23 – 3 Oct 23
  • Ryder Cup – Rome: 25 Sept – 1 Oct 23
  • Australian Football League Grand Final – Melbourne: 30 Sept 23
  • Men’s Cricket World Cup – India: 5 Oct 23 – 19 Nov 23
  • COP 28 – Dubai: 30 Nov 23 – 12 Dec 23
  • Australian Open – Melbourne: 15 Jan 24 – 28 Jan 24
  • Super Bowl – Nevada: 11 Feb 24
  • Men’s European Football Championships: 14 Jun 24 – 14 Jul 24
  • Farnborough Air Show – Farnborough: 22 Jul 24 – 24 Jul 24
  • Olympics – France: 26 Jul 24 – 11 Aug 24
  • Paralympics – France: 28 Aug 24 – 8 Sep 24
  • Formula 1 2024 Season
  • Major music gigs and tours

Major annual and one-off events can increase rates and reduce availability. With bookings already being made for 2024 events, SilverDoor can advise on how to secure suitable accommodation at the best price.

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].

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