However, property agent Savills said consumer and brand awareness is still an issue that needs to be tackled by the sector if it wants to grow at a fast pace.
The firm’s research found that just 59 per cent of consumers were familiar with serviced apartments and 43 per cent with apart hotels (although slightly higher at 72 per cent and 52 per cent respectively among business travellers). More than three-quarters of those surveyed could not name a single serviced apartment or apart hotel operator.
However, Savills reports that Europe’s largest operators are already tackling this lack of awareness through the expansion pipeline. According to Savills spotlight report called the European Serviced Apartment Market: “The increasing preference of operators to develop their own purpose built stock, allowing them to 'brand' their properties both externally and internally, has been key to this. Expansion by international hotel operated brands in Europe, such as Accor's Adagio, IHG's Staybridge Suites and more recently Starwood's Element, is also aiding brand awareness across the Continent.”
Staycity is developing 800 new units in cities including Lyon and Edinburgh, Frasers Hospitality has 500 planned across Germany and Switzerland and Starwood’s Element is developing 200 in Amsterdam and London.
Marie Hickey, commercial research director at Savills, said: “Brand development and concept awareness in the serviced apartment sector has picked up pace in recent years but we believe that there is still some way to go. Strengthening both will make consumers more familiar with the product and its advantages over a hotel for certain types of trip, widening demand as a result.”
Savills also reported that the number of international visitors staying in paid accommodation across nine key European cities (Zurich, Frankfurt, London, Paris, Amsterdam, Brussels, Dublin, Edinburgh and Aberdeen) has risen consistently over the last three years.
However, business travel is yet to return to pre-recession levels suggesting the full upswing in serviced apartment demand is yet to be fully realised. In London, business visitor numbers are rising but still 10.5 per cent off their 2006 peak of 3.7m.