Report by David Sassoon at Destination Nation

Destination Nation reports that serviced apartment prices are rising due to decreasing availability. This trend poses a growing challenge for corporate travel buyers seeking serviced apartment accommodations, as outlined in our article below.

Weexamines key factors influencing major cities and highlights how new legislation is impacting supply.

Here are the key findings in eight popular cities for business travel:

London

Housing shortages are driving up rents in many parts of the capital, with a notable increase in short-term lets via digital booking platforms. Rising energy prices and other costs across the UK and Europe have further inflated prices. Availability has declined, especially for two-bedroom apartments, with many suppliers closing or selling. Marlin Apartments plans to expand its inventory over the next 12 to 24 months to meet the increased post-pandemic demand for larger spaces.

Edinburgh

Post-pandemic, there has been a decrease in individuals renting out single vacation lets, but aparthotels, exempt from this trend, present a lucrative option for international investors. Availability is scarce, leading to high accommodation prices. New regulations will exacerbate Edinburgh’s already limited short-stay inventory during peak seasons. Strict rules on individual short-stay lets are expected to reduce overall product diversity, impacting the extended-stay sector.

Dublin

The city faces a premium on short-term accommodation, with a 33% increase in arrivals and a 6% decrease in available stock. Regulatory challenges are causing owner-operators to exit the sector, reducing the variety of available properties. This scenario may favor the aparthotel model, attracting investors to the extended-stay sector.

Paris

Aparthotels have gained prominence due to the pandemic, leading to increased difficulty in finding availability. New regulations addressing short-term rentals are likely to add pressure on accommodation options for business travelers.

Amsterdam

New regulations discourage short-term property rentals, reducing overall availability and the diversity of the extended-stay sector. The residence permit system, requiring registration for stays over 90 days, further affects availability. However, the Dutch government is working to improve affordability and availability in the rental housing market, benefiting the extended-stay sector.

New York

High demand for short-term apartment lets in New York City makes it more profitable for landlords than long-term rentals. This trend is expected to attract more investment in aparthotels and build-to-rent projects, including office conversions into apartments or hotels. The strict regulatory environment limits both the availability and diversity of extended-stay accommodations, impacting the ‘local stay’ experience valued by some travelers.

Singapore

Strict licensing rules have removed private residential short-term properties from the market, reducing property type diversity but not overall room availability. The sector remains highly professionalized and thriving, with significant investments in hotels, aparthotels, and serviced apartment buildings.

Sydney

Commercial short-term rental availability remains strong, with a preference for accommodations that facilitate work-from-home arrangements. The market shows no signs of slowing down and, similar to Singapore, is driving investment into residential long-stay serviced apartments, which are unaffected by laws limiting short-term vacation rentals of individual properties.

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