ASAP Supplier Member Savills has released the latest Serviced Apartment Spotlight, with highlights including:
- Average annual RevPAR rates between 2021 and 2023 for the UK extended stay sector were 27.5% higher than the hotel average.
- The sector typically enjoys higher profit margins. Central London properties can achieve net operating profit margins between 45–55%, compared to 30–40% for hotels.
- The sector recorded nearly €700 million in transactions in 2023, representing 4.7% of total hospitality volumes.
- Increased consumer awareness, the rise of digital nomads, and the curb on Airbnb in some markets will support demand and operational performance.
- Extended stay currently represents a small portion of the total European hospitality market, averaging 6.1% of the total accommodation supply in major cities: there are significant opportunities for development and expansion.
Outlook
- Investment activity is expected to pick up pace in 2025, supported by an increase in stock and continued investor interest.
- Global hotel groups, such as Hilton and Marriott, are looking to accelerate the rollout of their extended stay concepts, further helping to legitimise the sector.
- Blurring with co-living and student to become more common, albeit expansion will continue to be dominated by specialist extended stay operators/brands.
