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Rising demand from companies for serviced apartments is outpacing the supply of new units, according to a report on the sector.
The fourth Global Serviced Apartments Industry Report, compiled by Travel Intelligence Network for The Apartment Service, found that the sector was being held back by a shortage of units in key locations, limited online booking capability and a lack of knowledge about serviced apartments generally.
Charles McCrow, managing director of The Apartment Service, said that buyers and suppliers also agreed “that greater standardisation is the key to realising the full potential of the sector”.
However, McCrow added that there had been “little progress” on this crucial issue in the last three years.
“Standardisation should be the clarification of minimum service levels and quality thresholds that can be expected from different categories of product” he said.
“The emergence of strong brands will go a long way to enable this but with so many independent providers, universal clarity is required.
“86 per cent of corporates and 72 per cent of agents agree there should be a global code of conduct for serviced apartment operators. Operators agree, but only 48 per cent believe that a code of conduct is feasible.”
The report said that the number of serviced apartments globally had grown by 9.4 per cent last year to 655,911 units in 8,802 locations. Although this was down from growth of 17.5 per cent in the previous year “reflecting the difficulties in raising capital for new developments”.
The vast majority of operators (94 per cent) said that demand for their apartments had risen in 2012 – this figure was 77 per cent in the previous year.
As for distribution, 80 per cent of corporate bookings were made online with 27 per cent of these through a self-booking tool. Three-quarters of operators said they offered live availability for their online bookings but only 38 per cent had any presence on a GDS.