The latest Savills World Research report has named the serviced apartment and apart-hotel sectors as the ‘fastest growing’ hospitality segments in the UK.
The report which was produced in conjunction with The Association of Serviced Apartment Providers (ASAP), shows that the sector is expected to double over the next two years, with the purpose-built supply expected to expand by an average of 8.4% per year until 2017.
This forecast expansion is much greater than the 6% growth in the budget hotel sector and 2.6% for all hotels expected in the same time frame.
The rise of the serviced apartment
The future provision of the serviced apartment and apart-hotel sectors is set to outstrip previous expansion in the UK.
The report outlines improving sector awareness of extended stay options – helped by websites like Airbnb – as one reason behind the growth of the industry.
The 48 operators surveyed by ASAP plan to increase stock by 52% by 2018 (both nationally and globally).
Although London leads the way with over 1,200 additional units expected by 2017, it’s not the capital which is benefitting from a demand for extended-stay accommodation.
“While London previously dominated purpose built expansion, the future growth hotspots over the next two years are expected to be Scotland and the Midlands with average growth per annum of 21.1% and 13.4% respectively,” the report stated.
The report also outlines that supply constraints in the UK make it an ideal market for expansion. London, for example, has only one third of the amount of units as Hong Kong (relative to overseas business visitor numbers).
According to the report, despite an undersupply of units, the industry has been driven by ‘the evolution of customer preferences and improving concept and brand awareness.’
With travellers more open to less traditional types and styles of accommodation, the UK’s serviced apartment and apart-hotel markets are set to thrive over the next few years.
This article has been provided by London property specialist, Experience Invest.