SilverDoor releases insights from latest accommodation market update.
The latest accommodation market update report released from SilverDoor, reveals that whilst cost is still the top priority for travel and relocation managers, they are also sharpening focus on the sustainability credentials of properties. Likewise there is growing demand for access to more sustainability data so they can both encourage staff to make better informed accommodation choices and support reporting for travel programmes in more depth.
Financial pressure and tightened budgets in the face of rising inflation and interest rates are still making their presence felt. As growth in business travel slows many travel managers are focused on cost as the determining factor when analysing travel programmes. That said, there is a marked shift in interest around understanding the sustainability and carbon footprint of a property and a stay.
Whilst rates have remained steady throughout the summer they are expected to fall in the coming months which is positive news for corporate travel managers and those who remain focused on costs. In Amsterdam however rates have remained high and looking further ahead to the Olympics next year Paris is already seeing increased interest and rates as an increasing number of properties are already receiving bookings. In the Middle East the outlook on rates is more positive. Largely due to the accessibility of Golden Visas and shift of UAE weekends to the western Saturday to Sunday model which is resulting in both demand and Dubai rates in particular steadily increasing.
Lead times in EMEA for Q3 have also seen a 21.5% increase from 27 up to 33 days compared to the same period in 2022. Largely due to the continued disruption to rail and air travel throughout the region which has seen many corporates planning trips further ahead in an effort to mitigate the impact of changes to itineraries.
Compared to EMEA rates have seen a steady decline over the summer months, again good news for bookers and travel managers. Tokyo in particular has seen a decline of 26% in rates since last quarter. Likewise Hong Kong is expected to see a 19% drop in rates by the end of the year, the result of a weaker property market and reduction in new development investment. This is compared to Singapore and Melbourne where rates have been steadier in comparison. Looking further ahead the market in Singapore is expected to be slightly softer towards the end of the year, however many landlords have indicated they will hold firm on rates. Likewise into 2024 the region is predicting a rise in rates, largely due to a busy events calendar and expected drop in flight prices for China, both of which indicate a rise in demand and therefore rates into the new year.
Across America and Canada the picture is perhaps the steadiest across all regions. Looking further ahead to the next quarter this steady outlook also looks set to continue. This includes rates for New York – although the highest they are also now stabilising and have in fact seen a 19% decline since November 2022. Likewise rates in Toronto have remained largely unchanged seeing only a 6% rise for July to September. Year on year lead times have also remained similar at 33 days.
Stephen Homsey, Regional Head USA, SilverDoor comments, “The challenges of inflation, interest rates and uncertainty are still making their presence felt as cost continues to hold its position as the determining factor when planning and booking accommodation.
“Bookers and buyers are retaining a keen focus on pricing and value for money. To account for this heightened price sensitivity, providers have responded by adjusting rates throughout the last quarter and we expect this will remain a necessity towards the end of this year and into 2024.
“That said attention is seeing a significant shift towards sustainability and DEI. What will be interesting and valuable to watch is how carbon emissions and DEI also increase their prominence on the balance sheet when it comes to planning and booking accommodation. Indications suggest they will grow – it remains to be seen by how much as wider market conditions still demand a focus on cost.”
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.