A recently released quarterly accommodation market update highlights the persistent focus on cost control when it comes to booking and managing accommodation.
Sustainability and ESG compliance targets are also influencing corporate decision-makers with increased pressure on the whole supply chain to demonstrate targets, commitment, and progress in these areas.
SilverDoor Apartments’ update reveals how regions worldwide are approaching the challenge of managing costs against a wider backdrop of rising interest rates, inflation and energy costs. The world-leading corporate accommodation providers say increased commute times, dynamic pricing, longer lead booking times, fewer trips and co-living are all paving the way as solutions to secure more affordable accommodation.
Asia Pacific
Within APAC, businesses are adopting a longer-term approach to planning as lead times have also seen an increase, albeit not by as much as Europe Middle East and Asia. “Average lead times across APAC are up by 17% from 35 to 41 nights compared to March – May 2022 as businesses work to manage costs and plan trips and budgets further in advance. In response many providers have adopted more dynamic pricing models to navigate a market populated by rising costs and uncertain levels of supply and demand,” SilverDoor says.
Get a free ticket to Australasia’s leading travel conference on August 15-16.
This, however, is not without risk the accommodation provider says as it can cause marked increases in rates when supply is low or demand sees a significant rise and can create more turbulent market conditions. SilverDoor says demand overall remains strong, particularly for co-living apartments and developments which are also seeing growth in popularity due to the value they offer, according to SilverDoor.
Europe, Middle East and Asia
SilverDoor highlights for businesses across EMEA, cost reigns supreme in the cost vs. commute conundrum with many willing to ask their travellers to travel further to not only get cheaper rates but also access higher quality accommodation.
UK commuter belt locations such as Reading and Milton Keynes have seen a marked increase in demand from those companies looking to accommodate staff within reach of London but also save on city-based rates by extending commutes. “For many the standard commute time tipping point is between 30-45 minutes but this can be extended to one hour,” SilverDoor says.
Lead times between March and May are up by nearly a third (29%) from 28 to 36 days YOY as businesses are taking a longer-term approach to accommodation planning.
“Both relocation companies and corporates believe earlier bookings offer lower rates and are planning further ahead to mitigate the risk of higher last-minute rates,” SilverDoor says.
This is in addition to booking fewer but longer-term trips. With many businesses keeping a keen eye on their carbon balance sheet as well as their costs, the onus is on reducing the number of flights booked. “As a result, when employees do travel for business there is a growing trend towards staying for longer to get the best value from a flight rather than taking shorter, more frequent trips,” SilverDoor says.
Americas
Across the Atlantic, longer lead times are being employed to manage costs.
Lead times for March – May are up over a quarter (27%) from 35 to 44 nights, compared to the same period last year in order to secure better rates and better accommodation. The more notable comparison is between relocations and corporate travel bookings. Employee relocation has seen a significant decrease of 45%. Conversely, TMC reservations have nearly doubled with an increase of 96% as demand from the TMC market and technological capabilities to fulfil that demand have both advanced.
The full SilverDoor Market Update is available to read here.
This year’s Business Travel Conference, the 23rd btTB Travel Conference on August 15-16 in Sydney is themed “For You and By You” designed around suggestions received from travel buyers.
