The Association of Serviced Apartment Providers (ASAP) and Savills have released the headline results for the sector from their Operator Sentiment Tracker Survey (November 2016), which track the changes in operator sentiment compared to their August 2016 Survey.
The key findings for the UK serviced apartment sector:
- Overall operators are more optimistic about their business prospects for the next 12 months than they were in August.
- Encouragingly almost 30% of respondents reported they are accelerating their expansion plans (compared to 13.3% in August); the majority (60%) confirmed they were making no change to their existing plans but an increased proportion of 12.8% stated they were scaling back their plans which points to continued uncertainty in the market.
- The operational outlook is mixed with the general trend suggesting that operators expect both year end occupancy and ADR to be down on 2015, which is reflected in the latest STR data for the sector (UK occupancy down 2.6% at end October 2016, year to date); however, this is an improvement on what was reported in the August survey with 30% of operators in November stating that they expect their year end occupancy to be up on 2015, in the August survey it was 20%.
- It is a mixed picture when it comes to sources of demand with operator responses pointing to more robust leisure demand than corporate.
The majority of operators (60%) stated that they expect year end leisure demand to be up on 2015 levels with 40% stating that year to date demand was already up.
- The survey results suggest corporate demand post the Brexit vote remains, on the whole, weak but has improved on that reported in August. The improvement in sentiment is more marked when it comes to the year end outlook with 35% of respondents expecting that year end demand from the corporate market to be up on 2015, an increase on the 26.7% reported in August. This helped move the outlook net balance (balance between proportion of respondents expecting an increase in demand minus those expecting a decline) for corporate demand into positive territory.