Occupancy level UK Serviced Apartment sector remains strong
The serviced apartment sector in the UK continued with a strong occupancy rate in 2017, with London remaining at the centre of serviced apartment growth in the UK.
1 February 2018
The UK serviced apartment sector posted strong performance growth in 2017, according to research from the Association of Serviced Apartment Providers (ASAP) and STR, who track supply and demand data for the global hotel market sector.
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Performance was mixed across key UK cities. Manchester experienced a strong increase in supply over the course of 2017, and saw a 6.3 per cent decline in occupancy. Although the city’s actual occupancy level remained considerably high at 80.5 per cent, ADR dropped 3.4 per cent to GBP100.09, confirming the impact supply growth has had on Manchester’s overall performance.Meanwhile, Edinburgh recorded a 0.4 per cent growth in occupancy to 84.4 per cent and a 7.3 per cent growth in ADR to GBP119.21.“Results were quite mixed across UK markets, it is encouraging to see that overall performance levels in the serviced apartment sector continued to grow in 2017,” commented Thomas Emanuel, director of business development for STR.He added, “Supply growth has been considerable, which confirms the high level of investment interest in further developing this sector, but strong demand growth and the ability of operators to drive rate growth in several markets are positive indicators for how the sector will continue to adapt as its inventory expands.”
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Regional variation in serviced apartment growth
Based on STR’s year-end performance figures, UK serviced apartments recorded an actual occupancy level of 81.7 per cent, a 0.2 per cent increase over 2016. Meanwhile, the average daily rate (ADR) rose 5.4 per cent to GBP148.48. London accounted for much of the sector’s growth in 2017, posting a 2.2 per cent increase in occupancy to 83.8 per cent and a 9.8 per cent increase in ADR to GBP198.74.Across the rest of the UK (excluding London), serviced apartment occupancy dropped 1.7 per cent to an actual level of 79.7 per cent, while rates rose modestly (+1.0 per cent to GBP93.71).Related stories:
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Performance was mixed across key UK cities. Manchester experienced a strong increase in supply over the course of 2017, and saw a 6.3 per cent decline in occupancy. Although the city’s actual occupancy level remained considerably high at 80.5 per cent, ADR dropped 3.4 per cent to GBP100.09, confirming the impact supply growth has had on Manchester’s overall performance.Meanwhile, Edinburgh recorded a 0.4 per cent growth in occupancy to 84.4 per cent and a 7.3 per cent growth in ADR to GBP119.21.“Results were quite mixed across UK markets, it is encouraging to see that overall performance levels in the serviced apartment sector continued to grow in 2017,” commented Thomas Emanuel, director of business development for STR.He added, “Supply growth has been considerable, which confirms the high level of investment interest in further developing this sector, but strong demand growth and the ability of operators to drive rate growth in several markets are positive indicators for how the sector will continue to adapt as its inventory expands.”
Growth despite economic uncertainty
James Foice, chief executive of the ASAP, comments, “It’s really fantastic to see our serviced apartment sector continuing to perform very strongly in 2017, in spite of the economic uncertainty and the significant increase in supply, which proves that the consumer demand for this alternative way to stay continues to grow at a very impressive rate, year on year.“We are very excited about the many new developments opening right across the UK in 2018 which includes properties in Southampton, Manchester, Edinburgh, Glasgow, London and Brighton which reflects the undaunted confidence in our sector as operators continue to accelerate their expansion plans.”For related news and features, visit our Serviced Apartments section. Look out for the launch of 2018’s Relocate Awards, entry is now open. Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.
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