Established and emerging locations across APAC including Taiwan, Taipei, Hong Kong, Japan, Malaysia, Vietnam, India and Indonesia are experiencing increasing demand from corporates as investment across the region grows.
This level of demand is expected to remain high throughout the coming quarter and beyond as companies continue to diversify supply chains. These are some of the findings from the latest Quarterly Market Update report published today by SilverDoor, the world’s leading provider of serviced accommodation.
More specifically SilverDoor reports a noticeable uptick in demand across Taiwan and in Taipei. Tertiary locations like Tainan and Hsinchu are welcoming a growing number of corporates, whilst the average length of stay in Taichung is currently just over four months, at 122 nights, suggesting that long stay demand in these locations is also strong and set to continue.
Further positive news for corporates is the decline in average daily rates (ADR) across APAC last quarter to S$219, down 9.1% QOQ. Ongoing changes to trade agreements and tariffs are cited as one of the reasons behind this increase in demand with many global technology companies including Apple, Google and Nintendo taking steps to diversify their supply chain and shift focus from China to other APAC locations.
It has also been accelerated by the recently signed UK-India Free Trade Agreement which will see cuts to tariffs for UK businesses exporting to India and vice versa. This is welcome news for corporates looking to expand operations across India.
Mumbai in particular has seen growth in demand from across the oil and gas sector in addition to growing demand and inventory for a number of hubs including New Delhi, Hyderabad, Gurgaon, Mumbai, Chennai, Noida and Pune. As investment into these markets grows, corporate travel volumes to tier-one and tier-two tech cities are also expected to follow suit. However, this demand has been tempered by the India-Pakistan conflict with corporates advised to keep a close eye on travel advice in the coming weeks and months.
Commenting on the report, Amy Pammenter, Senior Client Programme Manager, SilverDoor said, “Corporates are taking proactive, strategic approaches to realising their own ambitions for growth against a backdrop of shifting geopolitical and economic landscapes. The increased investment in APAC, coupled with the decline in ADR will be welcome news for corporate clients and travel managers who are keen to manage costs whilst at the same time diversify across their own supply chains. Whilst emerging markets continue to be a key strategy for growth, global trade conversations are evolving rapidly and corporates need to keep up to ensure they have an accurate and current understanding of where the opportunities and potential barriers lie, from both an operational perspective as well as a corporate travel perspective. Maintaining a consultative approach to corporate travel particularly within APAC will be critical in the months ahead as investment continues and the travel supply chain and infrastructure expands and diversifies further.”