Serviced apartments outpacing traditional hotels in Europe: HVS

Staycity Aparthotels Paris, Marne-la-Vallée
The new-build Staycity Aparthotels Paris, Marne-la-Vallée is scheduled to open this August with studio and one-bedroom apartments. Photo credit: Staycity Group

Growth in the serviced-apartment sector across Europe continues to outpace that of traditional hotels. According to a new report from global hotel consultancy HVS, many of the segment's biggest operators are set to double their portfolios over the next three years.

Revenue per available room (RevPAR) growth for serviced apartments has outperformed traditional hotels with a 7 percent improvement across Europe for the sector last year, compared with 5 percent for hotels. In the U.K., RevPAR growth for serviced apartments was 3.5 percent, compared with 1.5 percent for hotels, and in London the sector saw RevPAR growth of 4 percent, compared with 3 percent for hotels, according to HVS.

The sector’s pipeline is set for further expansion across Europe, with 23,600 additional apartments due to be added to the inventory by 2022, making it one of the most active sub-sectors in the hotel industry. The U.K. represents a third of this development with 7,507 apartments planned over the next four years. London accounts for 39 percent of the total U.K. pipeline, followed by Manchester (16 percent), Edinburgh and Cambridge with around 10 percent each.


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Germany represents some 25 percent of the European pipeline, with Frankfurt representing 20 percent of the country’s expansion, with Berlin at 15 percent, Hamburg (11 percent), Düsseldorf (10 percent) and Munich (9 percent) as international brands mark their expansion and entry into the German market. Other destinations with high pipeline figures include Ireland (2,807 units), France (2,070), The Netherlands (872) and Poland (734).

“As the sector becomes more mainstream we are seeing operators push for further expansion into key destinations,” commented report co-author Simon Hultén, associate with HVS. “In the U.K. and Germany they are moving into secondary and tertiary cities as sites become more difficult to secure in leading cities. The lenders we surveyed continue to be happy to support further developments, particularly those in gateway cities, although brand and location are important requirements and some concern has been expressed about oversupply in some Western European markets.”

Top Brands

Serviced Apartments

Brands seeing the fastest growth across Europe over the next four years include Adagio, opening some 6,100 apartments across Europe; and Staycity, opening some 4,800 apartments in the U.K., Ireland, Germany, France and Italy. Saco, Adina and Residence Inn also have plans for more than 1,000 units each.

“It’s an innovative sector, with alternative concepts such as co-living, co-working, student accommodations and home-sharing merging with the serviced-apartment model creating fascinating hybrids that respond to changing demands,” said report co-author Sophie Perret, a director at HVS.