Over the last twenty five years the serviced apartment sector has made significant
inroads into the short, extended stay and residential-style lodgings..
This has led to an increase in purpose built apartment accommodation against a fall
in the number of new hotels due to funding and land becoming harder to come by.
Whereas hotels are purpose built, the Australian serviced apartment industry has
been conceived from the development of private ownership and early investment.
Serviced apartments have been funded and bought for either leisure use, accommodation
or for investment purposes. The Australian public effectively funded the development
of the industry because hotels were less commercially attractive.
The industry growth is also the result of an increase in the number of corporate
travellers choosing serviced apartments over hotels because of competitive pricing,
high quality amenities and the option of short and long-term housing.
Between 2005 and 2008, the sector’s value grew from $1.5 billion to $2.2 billion,
and growth has continued ever since. The serviced apartment sector now accounts
for 25 per cent of the total market.
Demand for serviced apartments is predicted to grow in 2011. Occupancy rose by 5%
in the first quarter of the year, whilst average room rates increased by 3%. However
supply may struggle to match that demand. Quest Serviced Apartments’ chairman Paul
Constantinou said “Over the past few years, we’ve witnessed a change in where business
takes place, away from city centres to suburban business parks and regional areas.”
The importance of long-term assignments to the serviced apartments industry is growing
in Australia too, as Constantinou confirms. “Over the past year, we’ve seen a shift
in the perception of serviced apartments particularly from businesses and travel
management companies which need to accommodate people working on projects, away
from home for extended periods, in regional locations or near suburban business
parks. This is why we now have a constant flow of properties opening in these high-demand
suburban and regional areas.”