A new report from student.com and student housing advisory specialist Bonard suggests that the changes seen in 2020 may have longer term implications for the industry, with delayed booking and single-occupancy rooms amongst the main trends.
With international travel currently limited, the number of domestically mobile students is expected to grow and so is the overall number of students worldwide. While booking volume by international students has decreased across the board, the extent of the decline has varied massively across destination countries.
Booking data from student.com suggests that Ireland (-11.74%), the UK (-29%) and Spain (-20%) have fared best, with Germany (-75%), the US (-75%) and France (-73%) seeing the greatest drop in demand year-on-year.
'As expected, there has been a decline in the preference for shared rooms, which could be down to students wanting to self-isolate. There is also a growing trend of groups wanting to switch to single rooms, rather than their usual shared rooms,' said Dan Baker, general manager, EMEA at student.com.
International students’ purchasing behaviour points to a 71% decrease in lower-cost bookings (below $4,000 in value), which are mostly short-term which is in line with the decrease in summer study due to Covid-19 travel restrictions. A higher proportion of students are choosing to pay extra money for a private room.
Decision making
International students are tending to prolong their decision-making process. The market has seen an 11% increase y-o-y in students taking 6 months or more to book a room.
'This could be because lots of international students wanted to study abroad but took longer to confirm their bookings due to extra research because of concerns around Covid-19,' added Baker.
Bonard’s B2B perspectives, which complement this joint market assessment initiative, were based on demand/supply dynamics in more than 120 cities globally, spanning 5,600 purpose-built student accommodation establishments.
No divestments have been witnessed in the market, said Bonard’s CEO Samuel Vetrak. 'The sector has not lost its head after initial uncertainty. We closely monitor the global student housing pipeline. In Europe alone, we are tracking some 185 projects that are due to be completed in 2021, with an additional 95 projects set to open in 2022.
What we see is that approximately 80% of these are likely to be delivered on time.'
Vertrak added: 'In parallel, we have already received an increased number of enquiries about opportunistic assignments, mostly aimed at finding distressed properties, although not many student accommodation establishments fit the bill. It’s usually former hotels that are available for this type of repurposing at the moment.'
What injects another layer of confidence into long-term prospects for the sector is a general understanding that even though the asset class is not fully pandemic-resilient, it is recession-resilient – meaning that times of economic downturn fuel study abroad mobility and result in a growing number of students pursuing their courses abroad, Bonard insights suggest.
'This is what happened in the early 90s, after 9/11 and during the GFC of 2008-2009 and we have every reason to believe that the market will bounce back stronger once the pandemic is over,' Vetrak concluded.
