Skip to main content Skip to footer

Hospitality Bites | Serviced Apartments and Residences: Extended Visits to Prevail

blog CVAS hospitality bites serviced apartments and residences extended visits_1536x1040

The extended-stay market across Asia proved surprisingly resilient despite effects from COVID-19 to the travel sector, with demand likely to return to pre-2019 levels as more restrictions ease and outbound travel increases.

Prior to the onset of COVID-19, the extended stay market across Asia had progressively evolved as an accommodation and investment option driven by prolonged regional economic growth.

No longer typically perceived as a "dull version of a hotel for a corporate assignment,” occupational demand was increasingly generated via the leisure market, in addition to the foundational business travel sector.

This was especially prevalent in a key economic powerhouse such as Singapore, which caters for a wide variety of extended stay users. Along with a mixture of business travel, staff on placements or training, temporary accommodation following relocation, or international students, Singapore’s extended stay providers also catered for a significant family segment.

Despite this clientele variety, the primary influences for the selection of extended stay projects remained convenience, the length of the booking, the room and project quality, and the price. Standard facilities sought after included the provision of a kitchenette, superior connectivity, and other amenities to create that ‘home away from home’ feeling. Historically, one-bedroom units were in the highest demand, although recently the ability to accommodate a family or a separate office are increasingly becoming key considerations.

Despite the seismic impact on travel conditions brought on by COVID-19, the extended stay market in Singapore, and wider afield, proved surprisingly resilient in 2020 and 2021.

In Singapore, extended stay units continued to provide sanctuary for long-term occupants seeing out the crisis in the relative stability and safety of the country. As the banking and technology epicentre of Southeast Asia, Singapore maintains a community of C-suite and executive personnel (and often their families) for whom flexibility and quality of accommodation are as important as avoiding the potential pitfalls and complications of a highly competitive premium residential market, with its minimum two-year requirement clause in most cases.

Recently, as Hong Kong and China deepened their COVID-19 restrictions, Singapore witnessed an influx of expats seeking shelter. Therefore, in taking a holistic view of the market of the preceding two years, while the impact of COVID-19 on all forms of accommodation was challenging for owners and operators, the Singapore extended stay market bore the brunt of it well, and performance was not as dire as may have been reasonably expected when this unprecedented global event emerged in early-2020.

Singapore’s extended stay properties achieved occupancy well-in-excess of 80% annually pre-2019, in addition to strong average daily rate (ADR) at approximately S$280 per night, driven by premium brands such as Ascott, Frasers and Shangri-La. Despite the stark impact on 2020 performance by restrictions on business travel and the relocations of long-term occupants, occupancy across the market remained higher than 75%.

2021 witnessed a recovery of occupancy to circa 85% as the demands of the extensive government quarantine program generated patronage for the industry, and expatriates remained in-country as international borders remained closed. The effect on ADR was a significant decrease to S$180 per night across the market, but this is expected to recover rapidly by H2 2022 as operators aggressively push rates on the return of open international travel and as sector benefits from those seeking COVID-19 induced shelter in the near term.

We envisage average occupancy should remain at circa 85% in 2022, with unit rates driven by the return of business travel and an anticipated influx of expatriate relocations from Hong Kong and Mainland China. Whilst the unusual situation of the migration trends will likely taper off in 2023, the ADR level should hold, if not exceed pre-2019 levels.

Looking ahead, the need for extended stay units is likely to return to pre-2019 levels around H1 2024, with key factors in play such as the return of Mainland China's outbound travel, and wider global economic conditions considering rising inflation and energy costs. Extended stay project supply within the Singapore market will remain consistent at circa 7,000 units, with currently no confirmed new additions to the market beyond 2023 providing security for existing owners.

The full recovery in demand for extended stay should occur around 2024 when Singapore’s international visitations return to circa 20 million. The demand for accommodation relies upon consistent visitation numbers and the projected increase in supply of units into the market by the end of 2022.

Notwithstanding, the outlook for the sector in the mid-term is positive as Singapore looks to reinforce its status as the region’s economic power, and benefits from Hong Kong’s perceived decline as a preferred base for international entities and executive expatriates.

In terms of investment, with wider yields (circa 25 to 75bps) to traditional hotels, combined with more stable income and an efficient operating model, the sector is rapidly becoming desirable by funds and private equity players. This is exacerbated by the continued decline in yields for traditional hotel assets, with serviced apartments set to become the new ‘data centre’ of the hospitality sector.


Liked what you read? Check out more insights on the hospitality, travel and leisure sector in our Hospitality Bites series.


Article enquiries

Contact us here.

Related Experts

Greg Condon

Associate Director

Hotels & Leisure


Greg has over 15 years in providing hospitality, commercial and residential property valuation and advisory services across three international regions, and is a member of RICS and Associate of the Australian Property Institute. 

After completing his Bachelor of Business (Property) studies and initial professional valuation training in Melbourne, Greg moved to London in 2004.

After eight years of reporting valuations and assisting with asset management initiatives across the entire UK market to a  range of instritutional-grade clients, he sought to continue his career development in South East Asia by moving to Bangkok in 2012. 

During his time with Knight Frank Thailand, Greg became a senior member of the largest internationally-branded valuation firm in the country, and intrinsically involved in client relationship reporting and management to a variety of clients from the hospitality, banking, corporate and private sectors. 

With his extensive involvement in the valuation and advisory of regional hospitality-led assets, Greg joined Savills in 2018 to focus his advisory and business development skills on the entire South East Asia hospitality market. As the Head of Hotel Valuations for the region, Greg continued to complete assignments in Thailand and Vietnam, together with wider market-leading destinations such as the South Pacific and the Marianas Islands.

Despite an unprecedented change in the global marketplace as a result of the pandemic, Greg relocated to Singapore in late-2020 and through his appointment at Colliers will strive to continue to  provide his extensive expertise for the benefit of a broad and prudent client base.  

View expert