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With 56,700 serviced apartments and a market value of £1.7 billion, the UK serviced apartment sector is an increasingly mature market. This growing maturity not only attracts well-known hospitality brands and generates loyal customer bases but also fuels the development of serviced apartment software, underlining the importance of industry trends.
Tracking and acting on serviced apartment trends is vital for your short-term and long-term strategy planning. Here are 10 serviced apartment trends to watch in 2024.
1. Extended stays
Extended stays are great for guests (better value, less travel) and operators (higher occupancies, less admin). They’re also increasingly popular – in 2022, 17% of serviced apartment guests booked their stay for more than 30 days. The following year, 87% of serviced apartment operators noted an increase in the average length of stay. From simplifying the management of extended stay bookings with specialist tools and automated processes to delivering an impeccable extended stay experience with seamless communication and responsive housekeeping, leverage the power of PropTech software to take advantage of the extended stay trend.
2. Blended stays
An increasing proportion of the serviced apartment sector is offering a range of stay lengths in the same property - be it one week, one month or one year. Noted as one of the key trends in the Serviced Apartment News 2024 trends webinar (featuring res:harmonics CEO Giles Horwitch-Smith), these ‘blended stays’ are made possible by the latest developments in PropTech software, enabling operators to accommodate the nuances of different stay lengths, such as flexible billing options and customised booking journeys. If you’re focusing on revenue growth in 2024, diversify your units across stay lengths to minimise booking gaps and broaden your customer base.
3. Substantial ESG initiatives
From advances in carbon accounting software to controlling property heating through your PMS, merging PropTech software with sustainability tech opens new ESG avenues for operators. For example, SilverDoor’s carbon calculator estimates CO2 emissions per night and building, so corporate guests can track and hit their ESG targets. Given both serviced apartment guests (i.e. 47% of renters view green building management as a ‘deal-breaker’) and regulators (i.e. in 2023, the EU launched its Corporate Sustainability Reporting Directive, which mandates large organisations to publish regular social and environmental reports) demand a greater ESG focus, embedding substantial sustainability initiatives makes sure you’re ahead of the curve.
4. London still leads the way
Last year, Savills noted an “increased operator appetite to expand into new, relatively underserved markets”. The UK’s regional serviced apartment sector is growing, but London is still the top dog having 45% of the total serviced apartment supply (Manchester comes next with 6.3%), the highest average occupancy (81%) and the highest average daily rate of £208.80 among UK serviced apartments. In addition, Union Investment analysis found that London not only has more existing serviced apartment stock than any other European city but also has the highest development potential (more than double Paris and Madrid). If you’re looking to run properties in the capital, as well as in the regions and Europe, choose a PMS that caters for seamless remote management.
5. Blurred hospitality lines
With serviced apartments outperforming hotels in terms of occupancy (80.8% compared to 77.3% for hotels) and rates (£160 average per night compared to £120 for hotels), it’s no surprise that big hotel chains have decided to take an ‘if you can’t beat ‘em, join ‘em’ approach (i.e. StayCity now has 32 aparthotel sites in Europe). But serviced apartments are also merging with other hospitality segments. From mixed BTR-serviced apartment properties to buildings with a heavy focus on community, communal areas and co-working (i.e. like a coliving development), mixed-use residential is meeting the needs of guests outside the usual corporate travel persona. With property management software simplifying mixed-use management, enabling flexible stays that switch between short, medium, and long stays, you no longer need to stay solely in the serviced apartment lane.
6. Widespread automation
In 2024, it’s the spread of automation to almost all serviced apartment processes that are becoming a game-changer. Now, you can automate your check-in process with pre-arrival emails, digital keys, online verification checks and payment portals – all within one centralised property management system. Automate operational schedules, send housekeepers a daily list of units to clean, and oversee maintenance tasks remotely. Automate billing processes, and link to payment portals and electronic invoices to different guest types at different times. With a serviced apartment specific PMS, automation is coming to replace all your tedious manual processes.
7. Personalised guest experience
Automation, however, will not standardise the guest experience. It frees up your property managers’ time to curate more personalised experiences and provides various ways to tailor each guest’s stay to their individual needs. For instance, send guests personalised pre-arrival emails based on their booking preferences. Use PMS data to create welcome baskets and suggest in-stay activities around the local area. Use a guest app to inform guests of events they might be interested in (i.e. film nights in the cinema room). Given that 93% of customers read reviews before booking their stay, elevating the guest experience is paramount.
8. Changing business traveller needs
According to 2024 research by the Association of Serviced Apartment Providers (ASAP), business travel accounts for 45% of UK serviced apartment guests with tourists (27%) and relocating professionals (23%) making up the podium. What’s more, the 2023 GSAIR report found that 53% of corporations are using serviced apartments more than in 2022 and 89% plan to stay longer or the same this year. Given Gen Z - who will make up 27% of the workforce by 2025 - are looking for a seamless digital journey and greater sustainability when travelling for business, make sure your corporate stay offer suits their needs.
9. Health and wellness focus
Health and wellness is more than a fad - it’s now cemented in serviced apartment guest expectations. In fact, 31% of serviced apartments offer a gym and 62% have green outdoor areas. From state-of-the-art gyms to in-room fitness equipment, onsite health cafes to curated wellness events – ‘bleisure’ (business and leisure) travellers look for health-centric features integrated into their stay. Harness the power of PropTech software to make your wellness offer stand out from the crowd by, for example, organising wellness activities (i.e. dawn yoga on the roof) and inviting guests with a Guest Portal.
10. Increased investment
The solid performance of the serviced apartment sector during the pandemic brought the sector to the attention of institutional investors. Now, thanks to the sector’s increasing popularity and enhanced revenue potential (i.e. diversifying the sector towards short and long stays), serviced apartments are an even more attractive proposition for private equity investors, large hotel chains and institutional players. For instance, JLL claimed that serviced apartments are a ‘safe bet’ for investors, Union Investment hailed the sector’s ‘huge potential’ and Savills claimed ‘serviced apartments have a very positive outlook.’ To take advantage of this promising position, and scale up your portfolio along the way, you need a flexible property management system specifically designed for serviced apartments.
Download the Ultimate Guide to Serviced Apartment Management Software 2024 to learn how property management software supports serviced apartment operators.
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