The growth of serviced apartments in Europe is set to outpace the expansion of traditional hotels over the next three years.
A new report from global hotel consultancy HVS found that 23,600 apartments are set to be added in Europe by 2022, with the UK accounting for 32 per cent (around 7,500 apartments) of this pipeline.
London will account for around 39 per cent of the UK’s new inventory with just under 3,000 apartments, followed by Manchester (16 per cent) and then Edinburgh and Cambridge (both with around 10 per cent of the UK total).
Germany will see the second largest number of new apartments with around 25 per cent of the growth over the next three-and-a-half years – Frankfurt will lead the way with 20 per cent of the new stock, followed by Berlin, Hamburg, Dusseldorf and Munich.
HVS associate Simon Hulten, who is co-author of The Serviced Apartment Sector in Europe: Poised to Outperform report, said: “As the sector becomes more mainstream, we are seeing operators push for further expansion into key destinations.
“In the UK and Germany they are moving into secondary and tertiary cities as sites become more difficult to secure in leading cities.”
The report also found serviced apartments have been enjoying higher growth in revenue than hotels across the continent – revenue per available room (Revenue per available room: A common metric used by the hotel industry to indicate performance.) rose by 7 per cent for the sector last year, compared with a rise of 5 per cent for hotels.
In the UK, Revenue per available room: A common metric used by the hotel industry to indicate performance. rose by 3.5 per cent for apartments – well ahead of an increase of 1.5 per cent for hotels. In London, apartments saw Revenue per available room: A common metric used by the hotel industry to indicate performance. go up by 4 per cent compared with hotels, which only experienced a 3 per cent increase.
Brands set to see the largest increases in their portfolio in Europe including Accor’s Adagio with 6,100 apartments across 50 projects in Europe, followed by Staycity (4,800 apartments). Saco, Adina and Marriott’s Residence Inn brands are set to open another 1,000 units up to 2022.