The Association of Serviced Apartment Providers (ASAP) and STR have confirmed that average occupancy for the UK serviced apartment sector was down in the first quarter of 2018, but operators remain positive for the rest of the year.
In a challenging start to the year, occupancy for the whole of the UK was down 1.5 per cent year on year to 74.9 per cent.
Meanwhile, average daily rate (ADR) rose 3.5 per cent to £133.87, resulting in a 1.9 per cent growth in revenue per available room (revpar) to £100.31.
After coming off a record-breaking year, Edinburgh serviced apartments recorded the sharpest occupancy decline of any UK city to 65.1 per cent (down 10.4 per cent year on year). On the other hand, Birmingham saw the biggest Revenue per available room: A common metric used by the hotel industry to indicate performance. growth (9.1 per cent), with occupancy up 6.9 per cent and ADR up 2 per cent to £85.50.
In London, Revenue per available room: A common metric used by the hotel industry to indicate performance. fell slightly to £134.25 (down 0.4 per cent) due to a 1.4 per cent growth in ADR.
Thomas Emanuel, director of business development for STR, commented: “To put these Q1 2018 results into context, 2017 was a landmark year for growth in the UK’s accommodation sector. There was a spike in arrivals after the devaluation of pound sterling following the 2016 Brexit referendum, but this started to level out toward the end of 2017 as the pound recovered in value. Despite the recent decline in demand, it is encouraging to see that serviced apartment operators have managed to maintain steady rate growth, which is important considering there are many new supply developments in the pipeline.”
James Foice, CEO of the ASAP, added: “We know that Q1 of this year has proved to be more challenging for some operators, following on from the strong growth last year. One of the reasons behind this is that inbound leisure business is slightly down on last year largely due to the pound having strengthened against the euro, the US dollar and the Chinese yuan in recent months, but it’s good to report that the majority of operators in our rapidly expanding sector remain upbeat regarding prospects for the rest of this year. The sector’s expansion continues as planned with over 2,000 new apartments set to open in 2018 and further new developments expected to be announced later in the year.”