The Apartment Service, a serviced apartment booking agency, has released its seventh addition of The Global Serviced Apartment Industry Report (GSAIR), announcing that there are now 1,022,984 serviced apartments in over 160 countries.
The report revealed some very encouraging numbers for European tourism, with an expected 57% more visitors by 2030, and a 200% increase in Chinese arrivals. AirBnB continues to raise awareness for alternative types of accommodation across Europe, which can only further support the serviced apartment sector.
In 2017, almost every European country experienced growth in their hospitality sectors and the same is anticipated for 2018. In the UK, serviced apartments hold a 4% share in total overnight accommodation and in 2017, the sector achieved an occupancy level of 81.7% and an average daily rate (ADR) of £148.48, an increase of 5.4%. London accounts for much of the sector’s growth and around 55% of the UK’s serviced apartment supply. Over 2017, London’s occupancy rose to 83.8% (a 2.2% increase), and ADRs achieved £198.74 (a 9.8% increase).
The Chief Executive of The ASAP, James Foice, commented: “We are very excited about the many new developments opening right across the UK in 2018, which includes properties in Southampton, Manchester, Edinburgh, Glasgow, London and Brighton, and reflects the undaunted confidence in our sector as operators continue to accelerate their expansion plans”
The report also mentioned the results from a 2017 poll by the Business Travel Show, which found that 80% of companies believe that business will remain as usual after the UK leaves the European Union. Shaun Hinds, former MD of EMEA & APAC at BridgeStreet Global Hospitality, even regards Brexit as an opportunity and told Serviced Apartment News that the extended stay sector “was built on, among other things, projects as a mainstay of its customer base. Brexit is the biggest project we are likely to see in a generation and so can only be an opportunity - some reports cite up to 30,000 jobs being required to deliver Brexit. The chief Brexit officers and their teams will need somewhere to stay.”
The GSAIR stated that the UK should expect the largest proportion of openings in 2019, representing 41% of European supply pipeline. This pipeline continues to be dominated by the UK’s largest operators, with Staycity looking to improve its position as the UK’s largest operator with 680 units in the pipeline, increasing current stock levels by 57.9% by the end of 2019.
New and planned serviced apartment developments across Europe include:
- UK: SACO will add 1,000 new units to its Locke lifestyle aparthotel concept. Launched in London’s Whitechapel, the brand already has a presence in Manchester and Edinburgh and has secured additional sites in London, Berlin, Cambridge, Manchester, Dublin and Paris.
- Germany: Staycity will open a Wilde Aparthotel in 2019 as part of Charlie Living at the former Checkpoint Charlie on the Friedrichstrasse in Central Berlin. The 48-apartment building is one of two Staycity properties opening in the German capital.
- France: Cycas Hospitality will manage the first dual-branded Hyatt property in Europe. The Hyatt Place and Hyatt House hotels, close to Paris Charles De Gaulle airport. The hotels will open in the second half of 2020.
- Ireland: Staycity will open in Dublin’s Chancery Lane with 50 apartments. Adding a further 142 apartment building on Mark Street in 2020. By 2021, the company expects to have 1,500 keys operating in Dublin.
- Spain: Amsterdam-based operator Yays has opened its first property outside Amsterdam with the launch of Yays La Sagrera in Barcelona.
The report also highlighted the ambiguity over planning classifications and regulation of serviced apartments. Smaller UK operators are facing difficulties in adding inventory when competing with properties in the same buildings which are run as short-term rental lettings. As a specialist serviced apartment real estate agent, we focus on helping these small operators expand their portfolio by helping them secure leases across the country.
Overall, it comes as no surprise to hear that the serviced apartment sector is thriving across Europe and the World and continues to present many opportunities for real estate landlords, developers and investors. If you’d like to find out more about this fast-moving sector or are seeking representation, contact Saxbury for your next move.