The global market that we work with at SilverDoor is showing promising signs of growth. The nature and value of serviced apartments are becoming even clearer and more operators around the world are entering the market each year. There are still areas in the world, however, where demand exceeds supply or requires a better quality of product.SilverDorr

A lack of supply is not immediately evident across the global serviced apartment sector as a whole. Some cities are over supplied, such as Abu Dhabi and Dubai in the UAE, and some cities, such as Hong Kong, are undersupplied. As a result, no generalist statement can be made of the global sector as a whole and each region must be considered on its own merits.

India and the Far East, including remote cities in China, have recently seen increases in both supply and demand as more multinational companies move to these territories. These companies tend toward longer assignments for the employees they send to these regions, given that the distance from the West means that employees are not able to fly home easily for the weekend. This in turn creates a favourable market for serviced apartments, due to the inconvenience of using hotels for long stays.

In the UK, demand for the City continues to grow and corporates doing business there have had to agree to consider staying just outside their desired location. This consumer acceptance and resulting demand has led to a massive injection of apartments in Aldgate on and around Commercial Road. London’s commuter belt has also seen a significant rise in corporate demand for serviced apartments. Towns and cities in Surrey, Berkshire and Hertfordshire such as Croydon, Watford, Woking, Guildford and St Albans are all greatly in need of an increase in serviced apartment supply.

Whilst being a prime region for corporate accommodation, Switzerland’s range of serviced apartments is fairly limited. Unsurprisingly, prices are also high there despite the quality of units offered often being subpar. This might be due to a number of reasons: the red tape imposed upon property acquisitions or the conversion of buildings to serve a different purpose than that originally permitted, a lack of available space or premises for sale or even a general reluctance to grant licences for serviced apartments. Whatever the obstacle might be, Switzerland’s demand for serviced apartments far outstrips its current supply.

Moscow is a prime example of a market that isn’t actually undersupplied but is hindered by the inconsistent quality of the serviced apartments available and the high prices attached to them. The combination of high prices and low quality diminishes trust and engagement within the market, particularly from international business travellers. Whilst there are some perfectly good serviced apartment options in Moscow, if the market there is to develop it needs to be better targeted toward international business travellers with more consistency, improved standards and rates to better reflect quality.

Source :
Patrick Hegan, International Partner Relations and Rates manager at SilverDoor, assesses supply and demand for the serviced apartment sector globally.