Figures released by ASAP and STR Global revealed increased occupancy and revPAR both in London and in the regions in the first quarter of 2014.
In regional UK, serviced apartments leveraged on corporate demand with a 10.2 per cent year-on-year hike in average daily rate (ADR), as well as 2.7 per cent occupancy growth, reaching 72.2 per cent.
In London, occupancy went up to 77.8 per cent, and despite a 7.4 per cent drop in ADR, revPAR grew by 2.2 per cent.
Joyce Cawthorpe, marketing consultant at ASAP, explained the reasons of the sector’s success. “It’s two things: greater availability and ever-increasing consumer demand. More people are waking up to the benefits of serviced apartments and in the past five years there has been exponential growth. All the things we offer - more flexibility, more space, a home away from home and great value - tick all the boxes for customers,” she told BigHospitality.
Between them, ASAP’s 73 members have opened 809 units so far this year - Cawthorpe expects this to reach nearly 1,000 by the end of 2014 - and everything points to even more growth in the coming years.
While London is leading the way, serviced apartment growth is happening everywhere in the country. Staycity recently signed a £17m deal to build 170 apartments in Birmingham’s Jewelry Quarter, while Apple Apartments has announced expansion plans in Belfast.
Serviced apartments in Edinburgh achieved first quarter occupancy levels of 68.5 per cent, up 15.5 per cent on the same period in 2013, while revPAR reached an average of £57.48.
Joe Stather, business development manager at STR Global, said: “With the Scottish vote for independence looming, and the largest line-up ever announced for the Fringe Festival, Edinburgh is a city set to make waves beyond the Lothians in 2014. [Q1 results have left] many confident that Edinburgh operators will have no trouble capitalising on a packed events calendar, including the Ryder Cup at nearby Gleneagles in September.”
Big hotel names are also joining the momentum in an effort to grow extended stays - IHG opened its first Staybridge Suite for the London Olympics and has plans to keep expanding the brand.
And while serviced apartments appeal to a broad audience, international guests seem to form the bulk of the sector’s trade. “It’s a mix of UK and international customers. Traditionally the longer stays are from international customers coming to work on a three-month project in the UK for example. So a significant percentage of the business is from overseas, but it depends on the location.” said Cawthorpe.