11 December 2015
Serviced apartments set to expand faster than any other hospitality sector
Serviced apartments are expected to expand faster than any other sectors in the UK hospitality industry over the next two years.
New research from The Association of Serviced Apartment Providers (ASAP) and Savills, has confirmed that the sector is on track to double in size in the UK in the next 2 years. The sector has a relatively small share of the market at 3.1% however, the survey shows that both national and regional operators in the UK are on track to increase the number of serviced apartment units they operate by between 82.2% and 122.3%, effectively doubling the total numbers across the UK. The sector is expanding rapidly right across the UK, not just in London, with Scotland and the Midlands in particular set for very significant growth.
James Foice, Managing Director of the ASAP commented: ‘This is the breakthrough moment for the UK Serviced Apartment sector, a complete game-changer. Our joint report with Savills confirms the sector will be the UK’s fastest growing hospitality segment to end 2017 with average annual growth of 8.4% for both 2016 and 2017. This growth will position the serviced apartment sector as a mainstream accommodation choice, a key player within the hospitality industry as a whole. We will have the critical mass of stock to ensure the consumer will have the option of booking a serviced apartment wherever they choose to travel in the UK. The expansion to every corner of the UK is particularly exciting: so while the most significant new developments are in our largest cities – London, Birmingham, Liverpool, Manchester, Edinburgh, Glasgow, it’s great to see new openings in 2016 in secondary cities including Reading, York, Chester, and Aberdeen.’
There is concrete evidence to suggest that this increase in supply is also helping to achieve much greater consumer awareness, due also in part to Airbnb raising the profile of alternative accommodation including serviced apartments. They are hitting the right note with the increasingly independent business or leisure traveller who wants a more flexible way to stay including the ability to cook and enjoy more living space, offering more of a ‘home-from- home’ experience.
Savills commented ‘There is clearly the capacity to absorb this projected expansion. Operational performance continues to improve and with overseas business visitor numbers to the UK also reporting an upwards trend, the outlook for underlying demand remains positive. The real challenge will be the ability to capitalise on this growing demand through greater concept and brand awareness, however, in light of the stock expansion planned this will naturally improve.’