The UK serviced apartment sector has seen a slight fall in optimism regarding future trading.
In the Operator Sentiment Tracker Survey undertaken by the Association of Serviced Apartment Providers (ASAP), 38.5% respondents said they were slightly to significantly more optimistic about business prospects than six months ago, down from 47.7% in November 2017.
Despite this, expansion plans remain robust in the industry with 37.7% of respondents reporting an acceleration in progress.
The majority of respondents believed year-end performance would be broadly in line with 2017 in terms of both occupancy and average daily rate.
Demand over the next six months is expected to come primarily from the UK market, although operators do expect to see increases from both Europe and the Middle East.
Business rates were named as the biggest concern for operators, highlighted by 60.4% of respondents, followed by increased competition.
Marie Hickey, commercial director of research at Savills, said: "Following a significantly strong year of growth for the serviced apartment sector in 2017, it is particularly encouraging to see from our Sentiment Survey that the vast majority of operators expect year-end performance to be in line with last year, despite increasing competition and wider economic conditions with the potential to create headwinds."
James Foice, chief executive of the ASAP added: "Whilst the current economic environment is presenting our sector with some challenges, it is encouraging to see the majority of our members remaining optimistic about their business prospects for the next 12 months. And it's very positive to see over one third of operators (37.7%) state that they are accelerating their expansion plans, which confirms the confidence in the future prospects for our vibrant industry."