“European serviced-apartment capacity is on the cusp of a major expansion. Consolidation in the sector is likely to continue, as it creates economies of scale and offers a way to rapidly expand a group’s network. The leisure market for branded long-stay accommodation will be increasingly targeted as a growth segment by operators. Multi-branded developments, including serviced apartments and extended-stay hotels, constitute an ongoing trend, which is set to continue. Stricter segmentation of long-stay accommodation is likely to take hold more markedly in regions outside the mature US market. And finally the serviced-apartment sector is going to take on the characteristics of the conventional hotel sector in terms of distribution and asset management structures.”
Serviced apartments and extended-stay accommodation is one of the fastest-growing segments of the transient accommodation market. Currently, there are an estimated 1,022,984 serviced apartments and extended-stay units worldwide, as well as an additional 73,563 corporate housing units in 13,164 locations, according to The Apartment Service, who note that two years previously, there were 826,759 apartments (with 70,300 corporate housing units) in 10,777 locations. These figures represent a 24% increase in capacity, more than double the 10.5% growth rate recorded for the preceding two-year period. At the same time, the number of destinations where serviced apartments are located has grown at almost the same pace over the past two years – by 22% – which demonstrates that operators are expanding their inventories in both new and existing locations.
A question of vocabulary?
Extended-stay, aparthotel, serviced apartment, or corporate housing – what’s the difference? In fact, the terms are overlapping but there are distinctions that can be made between them. Extended stay is a term used by the large US chains (including IHG) and the units are generally smaller than serviced apartments and the average length of stay shorter also. According to the Association of Serviced Apartment Providers (ASAP), a UK-based trade association for the sector, serviced apartments are:
“… self-contained apartments normally within a residential building. There may or may not be staff on site, so the operator may arrange to meet guests on arrival or make keys available via a safety deposit box. Some may even offer keyless entry access via smartphones or other technology. And guests will have access to a 24-hour helpline.”
Meanwhile, the group defines Aparthotel as:
“… serviced apartments within a dedicated building, offering hotel-like services with a 24-hour reception. These may also offer additional facilities like a communal lounge or an on-site gym. Some operators call their apartments ‘suites’ within an aparthotel.”
Corporate housing is defined as “a furnished apartment, condominium or house made available for rent or lease on a temporary basis, usually for 30 days or more.”
This report looks at the following areas:
Who are the main players in the serviced-apartment and extended-stay accommodation sector?
How is the market for serviced-apartment and extended-stay accommodation evolving by major world region?
What is the trend in distribution channels for serviced apartments and extended-stay accommodation?
How much impact does the sharing economy (such as Airbnb) have on the sector?
How segmented is the market for serviced apartment and extended-stay accommodation?
What is the impact of regulatory/planning controls on the sector?
