The serviced apartments sector in Europe has gained further momentum during the last 12 months, with major activity in development, branding and transactions, according to a new report from hospitality consulting firm HVS.
The findings in the report, Serviced Apartments in Europe – At the Crossroads Between Niche and Mainstream, echo those presented by Thomas Emanuel, STY Global's director of business, at the Serviced Apartment Summit in London in July, where Sean Worker, CEO of BridgeStreet Global Hospitality, also highlighted the huge demand for serviced apartments among business and leisure travellers.
The UK's Association of Serviced Apartment Providers (ASAP) expects to double in size by the end of 2015, and, in its UK Serviced Apartment Report Q4 2014, property consultant Savills predicts 50 per cent growth in Europe's serviced apartments sector over the next two years.
The Serviced Apartment Summit saw the launch of the BridgeStreet IQ Report: Digital Nomads
, which features insights from more than 30,000 professionals into global professionals' preferences around living and working remotely.
Discussing the report's findings with Re:locate
, Mr Worker felt that the industry had been distracted by the idea of serviced apartments being the favoured choice of Millennials – young mobile workers who are highly sophisticated in their use of technology.
"I've come across plenty of Millennials who are anything but technologically savvy," he said, "and, these days, anyone who is successful in doing business around the world has to have a certain level of technical competence.
"Many of our clients are at the senior level, and it is interesting to see that they are choosing to stay in a serviced apartment – one that offers a high degree of luxury and service, but nevertheless, they are opting for a serviced apartment over and above a luxury hotel.
"We have to ask, why should that be? I think it is partly because these people are used to creating their own agendas. They travel and do business at all hours of the day, and business travel can be unpredictable. Flights can be delayed, meetings protracted, and so once these people reach their accommodation, they don't want to be bound by the rules of a hotel. They may want to eat late, or early, and they want privacy."
The BridgeStreet report highlights how working habits and aspirations are changing. While more than half of respondents were tethered to an office, an overwhelming 75 per cent would choose to embark on a 'digital nomad' lifestyle, choosing a well-equipped home office in a chic, downtown apartment as their dream workspace.
An overwhelming 83 per cent of those questioned preferred serviced apartments as their digital nomad headquarters, so that they could enjoy the benefits of home with the amenities of a hotel. The ideal length of stay was from one to six months.
Another element that seemed to influence respondents' views was that of 'bleisure' – the blending of business and leisure travel previously explored by Re:locate.
"Many business travellers no longer want to be disconnected with their location in a hotel; they want to feel part of a place," said Sean Worker. "Europe is the hotspot at the moment, and London is the hottest destination.
"Serviced apartments can offer flexibility and a genuine sense of freedom, but with security, so that companies who send their employees abroad know that they are fulfilling their duty of care. This real experience of a place is also good for morale."
A changing landscape
Industry buyers, suppliers, consultants and trade association representatives were interviewed for the 2015/16 Global Serviced Apartments Industry Report, published by The Apartment Service (TAS). Their input provides insights into local, regional and worldwide supply trends, plus insider perspectives on variations in different regions.
It's clear that much has changed in the two years since the previous edition of the report. The latest research reveals that there are now 105,818 serviced apartments in 1,723 locations in Europe, compared with 57,856 apartments in 593 locations in 2013/14. This represents an 82 per cent rise in units and a threefold increase in locations.
Based on TAS's estimate, Europe now accounts for 14 per cent of the global serviced apartments market in 17.3 per cent of the world's serviced apartment locations.
Says the report, "In terms of supply, Europe is the second-largest global region for serviced apartments, although the relative maturity of individual country markets varies considerably. Investment hotspots include Berlin, Munich, Frankfurt, Paris, Amsterdam, Barcelona and Rome."
According to the report, serviced apartment units in Zurich and Brussels account for 17 per cent of global supply. In Zurich, local players dominate the market, whereas Brussels has a mixture of local and international branded operators.
The report goes on to say that, despite the impressive numbers, the sector is still relatively new in Europe. The UK, France and Germany lead the way, with other countries, such as Belgium, Switzerland and Spain, seeing demand and supply concentrated in their major cities.
Building global alliances
A key trend across the serviced accommodation sector is the formation of global networks of providers, which aim to offer greater choice of locations and products for corporate clients and their relocating employees.
In June, BridgeStreet announced its global network membership programme, designed to expand benefits for guests and strengthen serviced apartment offerings internationally. The network currently has 13 partners, representing 26 cities and more than 6,000 apartments, with new members joining across the globe.
The Apartment Service's TAS Alliance, one of the first global networks of independently owned and operated serviced apartments, was launched in February 2014. It is attracting growing numbers of members and partners, who work co-operatively under a single brand, distribution, and sales and marketing umbrella, powered by a common technology platform.
The network's latest partners are Belgian serviced apartment company BBF and Visionapartments, headquartered in Switzerland. BBF has 1,500 corporate apartments in Brussels and a growing portfolio in the Hungarian capital, Budapest.
"Brussels is an important European business hub for our clients", said Jo Layton, MD of group commercial sales at The Apartment Service. "Following the acquisition of a number of large corporate accounts in recent months, we have seen increased demand for the city, and we are delighted to be working alongside BBF in this location."
Visionapartments currently offers 24 properties in seven European cities, including Zurich, Vienna, Berlin and Munich. The group has further projects in development, in locations that include Geneva and Frankfurt.
Since the launch of the TAS Alliance, the Apartment Service has seen growing demand for temporary corporate accommodation both into and out of the Americas, leading to the expansion of its New York office, which covers North America and Latin America.For more Re:locate news and features about serviced apartments, click here