UK sees rate growth but occupancy decline in H1

George Sell George Sell Uploaded 26 July 2018

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UK: H1 2018 performance data for the serviced apartment sector showed a 0.6 per cent decline in occupancy and a 1.2 per cent rise in ADR.

Figures from STR show that occupancy was down to an average of 79 per cent, with ADR at £140.28, resulting in a 0.6 per cent increase in RevPAR to £110.84.

In terms of individual city performance, London's occupancy was down 1.1 per cent to an actual level of 81.1 per cent, impacted by significant supply growth. The capital also recorded a 2.3 per cent drop in ADR, bringing RevPAR down 3.3 per cent to an actual level of £146.73. Edinburgh experienced more significant declines, with occupancy down 8.5 per cent and ADR down 3.5 per cent, resulting in an 11.8 per cent decline in RevPAR to £77.86.

Birmingham saw occupancy up 4.7 per cent to an actual level of 83.1 per cent and ADR up 1.5 per cent to £86.80, bringing RevPAR up 6.3 per cent to £72.13. Manchester also posted increases, with occupancy up 1.9 per cent to 79.4 per cent, ADR up 0.8 per cent to £97.52, and RevPAR up 2.7 per cent to £77.44.

Thomas Emanuel, director of business development for STR, said: "Despite the slight decline, the UK serviced apartment sector is still seeing strong actual occupancy levels. However, new supply at the levels we are seeing in this sector are bound to make an impact, and those markets with the highest supply increases are seeing the highest impact on occupancy performance. Operator confidence remains strong, and rates are growing accordingly. These occupancy challenges are likely to continue in the future due to a very robust pipeline across the sector, although demand should also continue to grow."

James Foice, chief executive of ASAP, said: "While the new supply is creating some challenges this year for our sector, especially in London, it's really encouraging to see that operators remain confident about the future.  This was also borne out by our June 2018 ASAP/Savills Sentiment Survey where operators confirmed that their future expansion plans remain robust."

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