UK: A survey from the Association of Serviced Apartment Providers (ASAP) and Savills predicts the UK serviced apartment sector will double in size over the next two years.
The sector currently has a total of around 19,000 units. The
survey found that both national and regional operators in the UK
are on track to increase the number of serviced apartment units
they operate by 122.3 per cent and 82.2 per cent respectively,
effectively doubling the total number of units across the UK.
The sector is expanding rapidly across the UK, not just in London, with Scotland and the Midlands in particular set for "very significant growth", the report found.
James Foice, managing director of the ASAP, said: "This is the breakthrough moment for the UK serviced apartment sector, a complete game-changer. Our joint report with Savills confirms the sector will be the UK's fastest growing hospitality segment to end 2017 with average annual growth of 8.4 per cent for both 2016 and 2017. This growth will position the serviced apartment sector as a mainstream accommodation choice, a key player within the hospitality industry as a whole. We will have the critical mass of stock to ensure the consumer will have the option of booking a serviced apartment wherever they choose to travel in the UK. The expansion to every corner of the UK is particularly exciting: so while the most significant new developments are in our largest cities - London, Birmingham, Liverpool, Manchester, Edinburgh, Glasgow, it's great to see new openings in 2016 in secondary cities including Reading, York, Chester, and Aberdeen."
Among the UK operators with significant expansion plans is Lamington UK, which currently operate 50 serviced apartments in London. Managing director Robert Godwin said: "Under Lamington's 'Vision 2020', a 10 fold growth to 1000 rental units by 2020 is planned for Lamington and its new design-led apartment hotel brand, Room 2. A combined 200 Room 2 units are already in the development pipeline, of which 100 are set to open across London and Southampton in 2016, with a further 100 serviced apartments to operate under the Lamington brand.
In Scotland, Lateral City operates 58 serviced apartments at Old Town Chambers in Edinburgh and is planning to more than double its stock. Gavin MacLennan, general manager of Old Town Chambers, said: "We completely believe in the serviced apartment sector and want to be at the forefront of setting new standards in this expanding market. We have plans to develop a further 50 serviced apartments in the city centre here in Edinburgh, along with plans to expand into Glasgow for the first time. It's all about setting the highest of standards and being innovative when it comes to pushing this sector even further forward, something we are proud to deliver throughout each of our projects."
The report also found that globally, the larger brands will deliver 112,500 new units across the world by 2018.
Marie Hickey, associate director at Savills said: "There is clearly the capacity to absorb this projected expansion. Operational performance continues to improve and with overseas business visitor numbers to the UK also reporting an upwards trend, the outlook for underlying demand remains positive. The real challenge will be the ability to capitalise on this growing demand through greater concept and brand awareness, however, in light of the stock expansion planned this will naturally improve."