Rates for serviced apartments in Europe have fallen during the final months of 2023 and that trend is set to continue in the early part of next year, according to the latest report from specialist agency SilverDoor.
SilverDoor’s quarterly update of the serviced apartment sector found that global average daily rates (ADRs) have fallen by 7.9 per cent from £173.52 per night in the third quarter of this year to £159.71 in the final three months of 2023.
The report added that ADRs for apartments in most of Europe’s major cities were set to start 2024 at a lower rate than during January 2023, as SilverDoor said it had detected “a slight drop in demand throughout the Eurozone”.
According to SilverDoor’s analysis, rates in London will average £177 per night for a one-bedroom apartment in January 2024 compared with £190 in January 2023. Similarly rates in Dublin started 2023 at £154 per night but have dropped to £136 for January 2024.
Meanwhile year-on-year prices in Amsterdam are set to be flat at £155 in January 2024 compared with £154 at the start of 2023.
The exception to this downward or static pricing trend is Paris, with rates for apartments continuing to rise in early 2024 as the city prepares to host the Olympics next summer. SilverDoor said that ADRs in the French capital were around £150 in January and would climb up to £400 per night during July and August.
The report also said that the average length of stay in the EMEA region had fallen by around 20 per cent in the fourth quarter compared with the previous three months as the “peak relocation season closed”. Lead times also dropped by 12 per cent in the region over the same period.
Serena Dines, group head of revenue at SilverDoor, said: “Operators have to remain competitive into the new year in order to secure the demand and bookings from corporates. Not just in terms of price but also in terms of the facilities available, location and increasingly their sustainability credentials, whilst also balancing the decline in lead times.”
SilverDoor’s report added that the “economy” apartments sector was set for growth in 2024 with this segment seeing a “marked increase in demand and investment”. Prices for these budget apartments tend to be around 15-20 per cent lower.
“Looking ahead to 2024 it will be interesting to see how the growth in the supply and demand for more economy-based accommodation will affect rates more broadly into the new year,” added Dines. “Will they remain at lower levels or will we see an increase as demand returns again and we look forward to what we hope will be a more positive economic outlook globally?”