Although the sector currently holds a market share of around 3.1 per cent of all hospitality sectors, the body’s survey predicts growth of 122.3 per cent for national operators and 82.2 per cent for regionals, effectively doubling the total number of units across the UK.
The report also found that the sector’s growth is not just focused around London, with Scotland and the Midlands set for ‘very significant’ growth.
James Foice, managing director of the ASAP, described the results of the survey as being a ‘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% 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,” he said.
“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.”
Operators set for growth
Among the operators planning significant growth is Staycity who plan to add 125 apartments to its London Heathrow property in 2016 and open five other sites, bringing its total number of units scheduled to open next year to 843.
Staycity chief executive, Tom Walsh, said: “Heathrow is an important location for Staycity with strong corporate bookings from the surrounding business community.
“The original Heathrow property, which opened in May 2012, has consistently traded well and there is certainly demand for further rooms from both the corporate and the leisure market. London Heathrow is also the ideal site to trial a food and beverage offer, given the surrounding area and its guest profile.”
The operator is also looking to grow in York and Birmingham, as well as in Marseille, France.
The other operators who have announced plans to grow are:
- Go Native: plans to ‘more than double’ to over 3,000 apartments including in new locations in Manchester, Bristol, Newcastle, Glasgow and Reading.
- SACO: doubling in size with six new openings planned in the UK & Ireland including London, Edinburgh and Aberdeen.
- Lamington UK: a 10 fold growth to 1,000 rental units by 2020; starting with 100 set to open across London and Southampton in 2016.
- Lateral City, who operate Old Town Chambers Edinburgh, will more than double their units with a new opening in Edinburgh and a new property in Glasgow.
- Apple Apartments: adding 170 units to their portfolio, an 89% increase.
- PREM Group: set to open in 12 new locations in the next three years.
The ASAP/Savills survey confirmed that larger global brands will increase by an average of 47.2 per cent by the end of 2018, resulting in an additional 112,500 appartments.
- The Ascott Limited: aiming to double its portfolio to 80,000 units by 2020.
- Oakwood Worldwide: planning to triple the number of Oakwood-branded properties worldwide in 2016.
- Frasers Hospitality: expansion plans to increase its global portfolio by 9,000 units to 30,000 by 2020.
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.”