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The latest monthly figures indicate that the UK economy lost momentum at the start of the fourth quarter. Output contracted by 0.1% in October, falling short of expectations and marking the weakest three-month growth rate since late 2023. This decline was driven primarily by a notable pullback in the services sector, which remains central to UK economic performance.

Although some temporary factors likely weighed on activity—such as uncertainty ahead of the November Budget and lingering disruption following September’s automotive production outage—the overall data signal a disappointing beginning to the quarter.

The Bank of England will place greater emphasis on upcoming labour market and inflation releases; however, October’s numbers add weight to the argument for a potential policy rate reduction at the next Monetary Policy Committee (MPC) meeting.

Key Developments

The 0.1% monthly fall in GDP pushed the rolling three-month rate into negative territory. Services output declined 0.3%, with wholesale and retail activity both registering losses. Consumer-facing services were only marginally lower, though still soft overall.

Manufacturing showed limited recovery after the significant auto-sector shutdown in September. Output rose 0.5%, with car production rebounding strongly but not yet fully reversing the prior month’s steep drop. There remains space for further improvements as the quarter progresses.

Construction activity slipped again, falling 0.6% in October, and its three-month growth rate also turned negative. Across both services and construction, public-sector driven activity—especially in health, social care, and public housing projects—continued to provide a meaningful offset to weakness in private-sector output.

The UK’s trade balance deteriorated further. The goods deficit widened to its largest level since early 2022, and export volumes declined more sharply than imports over the past three months. Volatility in automotive trade flows may influence this picture in the short term, but the current mix implies that net trade is likely to weigh on fourth-quarter growth.

Broader Context and Outlook

Economic activity during October reflected a “pause” across many industries ahead of the Autumn Budget. Surveys had already pointed to subdued momentum, and some retail weakness may have stemmed from consumers delaying purchases ahead of November discounting.

Despite a lacklustre start to Q4, there is precedent for a pick-up in activity early in the new year. The UK has experienced a recurrent pattern of stronger growth in the first half of the year followed by softer performance later on. Business sentiment also suggests that investment, hiring, and housing decisions were postponed while firms awaited fiscal policy direction.

December survey data—including PMIs and consumer confidence—will offer insight into whether households and businesses are beginning to re-engage following the Budget announcement.

For monetary policy, GDP alone is unlikely to determine the Bank of England’s next move. Nevertheless, October’s softness reinforces concerns about subdued demand. The upcoming labour market release on 16 December and inflation figures on 17 December will likely be decisive. While the case for a rate cut is strengthening, the final decision may remain finely balanced.

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.

Global Serviced Accommodation – 2024 Market Overview: Destination Nation, By David Sassoon

The Serviced Apartment and Corporate Housing Markets in 2024: Trends, News, and Regional Growth

As we step half way into 2024, the serviced apartment and corporate housing markets are witnessing significant transformations, driven by evolving business needs, technological advancements, and changing traveller preferences. This article delves into the latest trends, notable news, and regional growth patterns shaping these markets in 2024.

Key Trends in 2024

1. Rise of Hybrid Accommodation Models

   The blurring lines between traditional hotels, serviced apartments, and co-living spaces are giving rise to hybrid accommodation models. These models offer the flexibility and homely comfort of serviced apartments with the services and amenities of hotels. This trend caters to the modern traveller seeking longer stays and a more personalized experience.

2. Increased Demand for Long-Stay Solutions

   With the continued rise of remote work and digital nomadism, there is a growing demand for long-stay accommodation solutions. Serviced apartments and corporate housing providers are expanding their offerings to cater to professionals who require extended stays with home-like amenities and work-friendly environments.

3. Sustainability and Eco-Friendly Practices

   Sustainability continues to be a focal point in the hospitality industry. In 2024, we see a heightened emphasis on eco-friendly practices, from energy-efficient appliances to sustainable building materials. Serviced apartment providers are integrating green technologies and promoting responsible travel to attract environmentally conscious clients.

4. Technological Integration

   The integration of technology is transforming the serviced apartment sector. Keyless entry, smart home devices, high-speed internet, and digital concierge services are becoming standard offerings. These technological advancements enhance the guest experience and streamline operations.

5. Personalization and Customization

   Personalization is key in the serviced apartment market. Providers are leveraging data analytics to understand guest preferences and offer customized services. From tailored welcome packs to personalized recommendations for local attractions, the focus is on creating a unique and memorable stay for each guest.

Regional Growth Patterns

1. North America

   In North America, the corporate housing market is experiencing robust growth, particularly in tech hubs like NYC, Silicon Valley, Austin, CA and Toronto. The demand is driven by a combination of corporate relocations, project-based assignments, and an influx of remote workers. The region is also seeing a surge in sustainable and tech-integrated accommodations.

2. Europe

   Europe’s serviced apartment sector is expanding rapidly, with significant growth in cities like London, Paris, Berlin, Zurich and Amsterdam. The post-Brexit business environment and the revival of business travel are key drivers. Additionally, the focus on hybrid models and luxury serviced apartments is gaining traction, catering to both business travelers and tourists seeking extended stays.

3. Asia-Pacific

   The Asia-Pacific region is witnessing exponential growth, led by cities such as Singapore, Tokyo, and Sydney. The region’s economic dynamism and increasing foreign direct investments are propelling the demand for corporate housing. Moreover, the emphasis on technological advancements and smart living solutions is prominent in this market.

4. Middle East and Africa

   In the Middle East, Dubai and Riyadh are emerging as hotspots for serviced apartments, driven by large-scale events, tourism, and business expansions. In Africa, cities like Johannesburg and Nairobi are seeing growth, supported by multinational corporations and a burgeoning middle class.

5. Latin America

   Latin America’s serviced apartment market is growing steadily, with key markets in Mexico City, São Paulo, and Buenos Aires. The region’s economic diversification and improving business climate are attracting international companies and long-term travelers.

Notable News in 2024

– Major Acquisitions and Mergers

  The serviced apartment sector is seeing consolidation through major acquisitions and mergers. Leading players are expanding their portfolios and entering new markets to enhance their global footprint.

– Launch of Innovative Brands

  New and innovative brands are being launched, focusing on niche markets such as eco-conscious travelers, luxury long-stays, and tech-savvy professionals. These brands aim to differentiate themselves through unique value propositions.

– Expansion of Loyalty Programs

  To retain and attract clients, serviced apartment providers are expanding their loyalty programs. These programs offer exclusive benefits, personalized services, and rewards that cater specifically to long-term guests.

Hotel Brands Expanding into Apart-Hotel and Apartment Concepts: A 2024 Overview

In response to the growing demand for flexible and extended-stay accommodations, several prominent hotel brands are expanding their portfolios to include apart-hotels and apartment concepts. These new ventures cater to the evolving needs of modern travelers, offering the comforts of home with the amenities and services of traditional hotels. 

Marriott International Launches “Residence Collection”

Accor Expands into Long-Stay Market with “Aparthotel by Novotel”

Hilton Unveils “Hilton Homes” Concept

Hyatt Debuts “Hyatt Stay” for Extended Stays            

Radisson Red Ventures into Apart-Hotel Market

Conclusion

The serviced apartment and corporate housing markets in 2024 are marked by dynamic changes and significant growth. The trends of hybrid accommodation models, long-stay solutions, sustainability, technological integration, and personalization are reshaping the landscape. With robust regional growth and notable industry developments, the sector is poised for an exciting year ahead. As the market evolves, providers that adapt to these trends and meet the changing needs of travelers will thrive in this competitive environment.

New York has claimed the top spot as the world’s most expensive city for expats, overtaking Hong Kong, according to the latest global survey by ECA International. The strength of the dollar, coupled with high inflation and rising rental prices, propelled New York to the number one position in the survey covering 207 cities across 120 countries and territories. Geneva holds onto its third place, remaining the most expensive location in Europe for expatriates, followed by London in fourth. However, other UK cities, including Birmingham, Cardiff, and Belfast, dropped outside the top 100 this year.

ECA International, noted that the UK is facing a cost of living crisis, driven by rising costs in food, utilities, and housing prices. Despite this, all UK cities, except London, have seen a decline in the global ranking, primarily attributed to the weakening pound, making the country more affordable for international visitors.

The past year, marked by the Russian invasion of Ukraine, has introduced exceptional circumstances affecting expat costs globally. Cities hosting Ukrainian refugees experienced surges in accommodation costs, contributing to an overall increase in expat expenses. For instance, Polish cities, particularly Krakow and Warsaw, witnessed substantial rises in rental prices.

Russian expatriates fleeing to cities like Dubai, Yerevan, Nicosia, and Tbilisi also experienced heightened demand and increased rental costs. Dubai, UAE, rose to 12th place in the global rankings due to nearly a third surge in rents. Tbilisi, Georgia, saw rents increase by over a fifth.

Istanbul emerged as the biggest riser in the rankings, climbing 95 places to 108th, driven by a combination of factors, including the impact of the war in Ukraine and economic policies of President Erdogan. The city experienced an 80% increase in prices, partly due to higher demand from displaced Turkish nationals after an earthquake in February.

In Europe, inflation played a significant role in reshuffling the rankings, with over half of cities moving up the index, particularly in the eurozone. Scandinavia, however, witnessed cities like Oslo, Stavanger, Stockholm, and Gothenburg slipping down the table due to the impact of weakening currencies.

The strength of the dollar propelled all US cities up the rankings, with Mexico City being the most significant riser in North America, reaching 92nd place due to the strength of the peso and high inflation. In Asia, Singapore made significant gains, entering the top five most expensive cities globally, while Chinese cities dropped in the rankings due to a weaker yuan and lower inflation rates.

The global top 20 cities for expat costs in 2023 (2022 ranking in brackets) are as follows:

1. New York (2)
2. Hong Kong (1)
3. Geneva (3)
4. London (4)
5. Singapore (13)
6. Zurich (7)
7. San Francisco (11)
8. Tel Aviv (6)
9. Seoul (10)
10. Tokyo (5)
11. Bern (16)
12. Dubai (23)
13. Shanghai (8)
14. Guangzhou (9)
15. Los Angeles (21)
16. Shenzhen (12)
17. Beijing (14)
18. Copenhagen (18)
19. Abu Dhabi (22)
20. Chicago (25)

In the ever-evolving world of travel and accommodation, one of the significant shifts we’ve witnessed in recent years is the growing popularity of serviced apartments. Traditionally, hotels have been the go-to choice for travelers, but serviced apartments have been making their mark as a formidable competitor in the accommodation industry. As we step into 2023, it’s essential to examine the key differences and advantages of serviced apartments versus hotels.

Serviced Apartments The Rising Star

The Concept

Serviced apartments are fully furnished apartments equipped with all the amenities and services you’d expect from a hotel. These include daily or weekly housekeeping, concierge services, and often, a kitchen or kitchenette. They cater to both short-term and long-term stays, making them an appealing choice for a wide range of travelers.

Flexibility and Space

One of the significant advantages of serviced apartments is the generous space they offer. These accommodations come in various sizes, from studios to multiple bedrooms, providing ample room for families, business travelers, and anyone seeking a more home-like experience. The presence of a kitchen or kitchenette allows guests to prepare their meals, adding a touch of homeliness to their stay.

Cost-Effective

Serviced apartments often prove to be more cost-effective than hotels, especially for longer stays. With the ability to cook your meals, you can cut down on dining expenses. Additionally, many serviced apartments offer competitive rates and discounts for extended bookings.

Privacy and Comfort

Privacy is a key selling point for serviced apartments. You can come and go as you please, and there’s a sense of independence that’s hard to find in a hotel. This factor is especially appealing for those who value a quiet and peaceful environment.

Local Experience

For those looking to immerse themselves in the local culture and lifestyle, serviced apartments are often situated in residential areas, offering a more authentic experience. You’ll find yourself living among locals, exploring neighborhood markets, and getting a genuine taste of the destination.

Hotels: The Time-Tested Choice

Consistency and Amenities

Hotels have long been the standard for travelers worldwide, and for a good reason. They offer consistency and a wide array of amenities, from room service to fitness centers, swimming pools, and on-site dining. You know what to expect when you book a hotel room.

Service and Convenience

Hotels have a dedicated staff available around the clock to cater to your needs. Whether it’s arranging transportation, providing concierge services, or handling room service requests, hotels excel in ensuring guests’ convenience.

Brand Loyalty

Many travelers are loyal to specific hotel chains due to the reliability and quality they offer. Frequent guests often receive rewards, discounts, and loyalty program benefits, making hotels an attractive option for repeat visitors.

Market Overview

In 2023, the choice between serviced apartments and hotels remains a matter of personal preference and travel goals. However, there are some noticeable trends to consider:

• Blurred Lines: Some hotels have started to incorporate serviced apartment-like features, such as kitchenettes and extended-stay options, while serviced apartment providers are enhancing their services to compete with hotels.
• The Rise of Hybrid Models: Hybrid models, offering the best of both worlds, are emerging. These accommodations combine the spaciousness and convenience of serviced apartments with the amenities and services of hotels.
• Evolving Customer Demands: Travelers in 2023 are seeking more than just a place to sleep. They want experiences, local immersion, and the ability to adapt their accommodation to their unique needs.

In conclusion, whether you opt for a serviced apartment or a hotel in 2023, you have a plethora of options to choose from. Your decision should be guided by the purpose of your trip, your personal preferences, and your budget. The travel and accommodation industry continues to adapt to meet the ever-changing demands of travelers, offering a diverse range of choices for your next journey.

Remember, it’s not about whether one is superior to the other, but about finding the right fit for your specific travel needs and desires. The future of accommodation is exciting, as the industry continues to evolve and diversify to cater to the diverse preferences of modern travelers.