The second Quarterly Market Update report for 2024, released by SilverDoor, leading serviced apartment agent, details that shifting political landscapes and legislation particularly in the US and India, alongside increased demand for hybrid working, are key drivers of growth in global corporate travel demand.
Bills and ballots
Earlier this year, according to Quarterly Market Update report US President Joe Biden signed a bill to assign $50million to reduce passport backlogs and visa wait times. A massive backlog in processing first-time visas, causing delays exceeding a year (up to 400 days in some instances), has cost the US travel industry over $12 million in lost revenue from tourism spending in just the past year. This new bill, warmly welcomed by the US Travel Association, comes at a crucial time. The US, along with Canada and Mexico, anticipates a surge in visitors as they prepare to co-host the FIFA World Cup in 2026.
India’s business travel sector is booming, with spending projected to hit $38 billion this year. This surge coincides with the country’s ongoing General Election, the largest democratic event in history.969 million people are eligible to vote in a region that is seeing significant economic growth and likewise growth in demand for corporate housing and accommodation rates. Any resulting governmental changes are expected to reflect the demands of a younger workforce generation with further shifts in the corporate landscape to follow in support of key destinations including Bangalore, Pune and Mumbai where investment also continues to grow.
The hybrid / locale mix
More office work gains traction. Studies show 71% value hybrid work, but 55% of young adults prefer it. Focus shifts from home-working options to convenient office locations.
Demand for serviced apartments is driven by local amenities and community impact. This includes relocation needs like registering in a city and setting up bank accounts. Additionally, ESG-conscious companies seek property providers collaborating with local planners for community benefits, such as playgrounds and gyms.
ADR fluctuates in core markets, ALOS down, Lead times hold steady
Globally, booking data shows an expected YoY reduction in average daily rate (ADR) by the end of the year in key locations including London, Chicago and Singapore which will follow the current upward trend, whilst average length of stay (ALOS) has seen an 18.8 per cent decline by nine nights YOY, from 48 nights down to 39. Across key regions, ALOS is 35 nights in EMEA, 59 nights in the Americas and up to 63 nights in APAC.
Alongside the shifts in ADR and ALOS, lead times have held fairly constant at 42 days globally, compared to 41 days at the same time last year. EMEA has the shortest lead times of 40 days, compared to 49 days in the Americas.
Al Butler, Senior Client Programme Manager, SilverDoor.
Al Butler, Senior Client Programme Manager, SilverDoor comments, “It’s reassuring to see governments in several key markets making changes to support inbound travel, like the US visa bill and continued investment into developing regions in India, which will help to boost travel volumes for the second half of 2024. With change comes a need for agility, so it is important to ensure demand and supply aren’t at a disconnect as much as possible. In India particularly, our focus is on building and extending our portfolio and for many clients keen to safeguard and protect against any potential shortages, negotiating reserved housing agreements is proving a popular tactic.”
“Across the board the focus on sustainability continues. For those businesses keen to encourage a return to the office, albeit a hybrid one, demand for accommodation that offers shorter commute times remains high. Not only does it fit the bill in terms of reducing emissions and supporting employee wellbeing and a better work-life balance, it also means a hybrid model is significantly easier to achieve. Time, as ever, will tell how the hybrid model evolves in the future and the impact that has on the demand for corporate housing from the traveller and design and supply from developers.”
The article Quarterly Market Update report: Geopolitical changes and workforce preferences driving demand for corporate travel first appeared in TravelDailyNews International.