FEATURE SERVICED APARTMENTS
of hotel bed supply, expansion is rife. Around 50 new sites have opened over the last two years, compared to just five in 2005. Property firm Savills reports 3,200
new units in the development pipeline for completion by the end of 2017 and identifies the fastest growth markets in the country as Birmingham, Aberdeen, Edinburgh, London, Manchester, Liverpool and Newcastle. Cheval’s George Westwell believes that
2015 is the year that investors finally wake up to the opportunities for profit in London. “Serviced apartments are an attractive proposition as they are more profitable than hotels. The fact that major hotel groups are now developing a serviced apartment offering is a sign that this is a growth sector,” he says. Stuart Winstone, business partnerships
director at SilverDoor, says his company is regularly consulted by property partners when they’re looking at investing in new property. “We normally find that there are four
or five operators looking at the same opportunity because demand is still outstripping supply. That means that space for serviced apartments comes at a premium,” says Winstone. So how are independents competing
with the bigger players? Most are trying to find ways of adding value to their product in an attempt to differentiate their offerings. For example, Sky have created a bespoke television subscription for the serviced apartment sector that has seen strong take-up. There are new kids on the block too. The so-called sharing economy has
brought Airbnb,
9flats.com and others into the sector, although corporate enthusiasm has so far been limited. According to Bridgestreet, 15 per cent
of travellers have sampled these types of product. And a poll at a Business Travel Show session suggested that only a small minority can see beyond security and compliance concerns to include these providers in their travel programmes. Charlie McCrow of The Apartment Service believes this latter trend opens up a discussion about where the sector overlaps with holiday flats. “This is partly driven by a shortage of living space,” he says. “Owners are sweating their assets to generate income. In some ways these are a threat but demand is growing through greater global mobility. The arrival of Airbnb and others simply reflects a changing and wider range of consumers.”
Customer profiles Millennial travellers will make up more than half of the population by 2020. They have come into a workplace geared to
➔ Pictured Staycity Deptford; Premier Apartments
“The impact of guest reviews can be a differentiating factor and is definitely part of the decision making process”
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