US serviced apartment and extended stay sector broadly optimistic despite economic challenges

George Sell George Sell Uploaded 13 April 2017


US: An industry sentiment survey compiled ahead of the 2017 Serviced Apartment Summit Americas has revealed a broadly positive picture of the sector’s position.

The survey polled around 180 operators, service providers and lenders/investors in the Americas. The findings were revealed at the 2017 Serviced Apartment Summit Americas, which took place this week in New York City and attracted 150 industry leaders from across the region.

The overall tone regarding the economy and business prospects was broadly optimistic. More than 8 in 10 respondents (88 per cent) were either more optimistic or similarly optimistic about the US economy now than they were 12 months ago. When asked specifically about the serviced apartment/extended stay sector 40 per cent were more optimistic, 32 per cent less optimistic and 28 per cent broadly the same. With regards to prospects for their own business, 50 per cent were more optimistic than 12 months ago, 20 per cent were less optimistic and 30 per cent about the same.

Nearly 60 per cent of operators have taken on new units over the last 12 months, with a huge range (from two units to 1700) showing the diversity of the respondents. Two-thirds of operators (66 per cent) are planning to take on more units over the next 12 months, with a range of five to 2,000.

When asked about the effect of Airbnb and similar sharing economy platforms, just 36 per cent thought they have been broadly beneficial to the serviced apartment sector, with 42 per cent of those polled listing inventory on sharing economy and short-term rental websites. In another area of distribution, 27 per cent had seen an increase in the proportion of bookings from OTAs, 17 per cent have seen more direct business, and 56 per cent reported a similar mix.

Just under 60 per cent of operators manage units that are in mixed-use developments, with a slightly higher number (62 per cent) expecting mixed-use product to become a more significant element of their portfolio over the next three years.

Of the service providers and suppliers polled two-thirds (66 per cent) had seen an increase in business from the serviced apartment sector in the last 12 months, with 71 per cent expecting a further increase over then next year.

Half of the investors and lenders polled had invested in or lent to a serviced apartment development or company over the last year, whilst a third expect to do so in the next year.


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