The hotel consultancy explained that the increase in demand for serviced apartments was driven by an increasingly mobile workforce driving business travel and relocation activity, but that leisure travellers were also seeking the extra space provided by this type of accommodation.
However, the report found that a lack of standardisation across Europe is hindering the sector’s growth, despite the progress made in the UK, France and Germany to define and classify it.
“The development of a classification system or a specific ‘serviced apartment’ certification in the UK is crucial to foster industry-wide understanding, security and transparency,” said report co-author Veronica Waldthausen, associate, HVS London.
Definition
In the UK, definitions have been agreed upon and a charter is due to be signed off by most serviced apartment operators and developers at the Serviced Apartment Summit next week.
International brand have shown interest in entering the UK market or joining existing operators, added the report.
The UK serviced apartment sector has recorded healthy growth in RevPAR over the past three years, reaching £120 and 79 per cent occupancy in 2013.
“Over the next few years, London will see significant increases in supply, primarily in the eastern and southern parts of the city,” predicted report co-author and HVS director Arlett Oehmichen.
Europe
According to the report, the German sector is also showing growth with about 1.3m overnight stays in serviced apartments recorded in 2013. In the same year, average occupancy was 81 per cent with an average rate of €110 and a RevPAR of €89.
The more mature French market, dominated by brands like Adagio, Ascott and ResidHome, reached an average occupancy of around 75 per cent.
“Performance in the serviced apartment sector has been one of relatively resilient growth,” added Oehmichen. “The market is also attracting investors, although financing for development is more difficult to source, making expansion slow.”