They are not hotels, they are not Airbnb type accommodations. It is an idea of recent years and a particularly dynamic perspective in the field of hospitality as shown by recent studies.
They are the so-called Service Apartments (serviced apartments) a sector that has been particularly developing in recent years and in which they are investing in addition to “independent” investors and large hotel chains as they see an increased demand mainly from workers who combine work and holidays
According to the consulting company HVS, which carried out an analysis of the course of the sector, more and more people are looking for something bigger than a hotel room such as. a small apartment with the services however that can be enjoyed in the hotel. Also the concept of Bleisure travel, trips that combine business and leisure are at the center of interest.
More and more guests are choosing to extend their stay to enjoy a destination after working hours or at the weekend and are therefore looking for the convenience that serviced apartments offer.
Brands emphasize concepts of coexistence, the existence of spaces for social interaction, in order to appeal to digital nomads who see an attractive solution in serviced apartments, having access to more space, a sense of community and amenities such as gyms, etc. .
The chains with… apartments
It is therefore no coincidence that large hotel chains are also expanding into the sector. Marriott, with the Marriott Executive Apartments and Residence Inns brands, which has doubled its property portfolio since 2019 and today has 31 properties across Europe.
Hilton with the Home2 Suites brand, and a portfolio of 670 hotels, which will open its first unit in Europe in Dublin in 2025,
Intercontinental Hotels Group (IHG) with the Staybridge Suites brand has a portfolio of ten properties in Europe and 324 worldwide with expansion expected in Malaga, Antwerp, Budapest and Belfast.
Accor with the brands Adagio, Mövenpick Living, Novotel Living, and SLS Residences, is expected to operate 2,300 units in the next 4 years.
Growth in the sector is significant according to HVS which, among other things, notes that in addition to the growth of existing brands, it is also seeing the creation of new brands on larger operating platforms and a number of independent contenders such as The July and The Other House.
HVS’s analysis of the performance of around 9,000 serviced apartments across Europe reveals that occupancy increased by 2% between 2022 and 2023 to 78%, along with a 13% increase in the average price to €162 which resulted in the increase of the average revenue per room (RevPAR) by 15% to 126 euros in 2023.
Over 12,600 rooms
Impressive momentum is expected as more than 12,600 rooms are expected to open over the next four years, reflecting the high level of serviced apartment activity in the industry.
Of these, 33% of units (approximately 4,100) are set to open in the second half of 2024, with 45% opening in 2025, 12% in 2026 and 10% in 2027. The size of the planned projects ranges from 7 up to 370 units, with an average of 98 units.
Germany and the United Kingdom, according to HVS, lead the way, with 27% and 17% of total programming units, respectively. Despite being the city with the most branded serviced apartments, London is still the top development location with 27% of the country’s pipeline, followed by around 16% in Belfast, 12% in Glasgow and 10% in Cambridge. In Germany, Frankfurt ranks first with around 19% of the country’s pipeline, followed by Stuttgart with 12%. These two cities are ahead of the capital, Berlin, which is expected to host only around 9% of the country’s pipeline in the coming years.
In Greece and specifically in Athens, HVS “locates” two companies with investment plans. Limehome, which plans to operate until 2025, around 15 units and Zoia, which is preparing 83 units by the end of next year.
In general, the interest from the sector is concentrated in southern Europe, with Italy, Spain and Portugal as the main targets. Western Europe also remains an attractive market, including France, Germany, the Netherlands and the United Kingdom.
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