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The UK’s serviced accommodation sector is thriving with high demand and strong growth. CasaCity helps investors maximise returns with tailored support and management services.
Introduction
The UK’s serviced accommodation sector has emerged as one of the most dynamic segments in the hospitality industry. Despite economic uncertainties and the lingering effects of the pandemic, this sector has demonstrated remarkable growth and adaptability. Valued at £1.7 billion as of 2023, serviced accommodations are now an integral part of the UK’s hospitality landscape. This blog explores the factors driving the sector’s growth, its performance metrics, and the opportunities it presents for investors and operators alike.
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Key Takeaways
- The UK’s serviced accommodation sector was valued at £1.7 billion in 2023, with projections for continued growth.
- Occupancy rates reached 80% nationwide in 2023, with London leading at 81% and daily rates averaging £208.80.
- Long-stay accommodations are increasingly popular among corporate travelers, digital nomads, and relocation clients.
- CasaCity provides tailored services to help investors capitalise on the thriving serviced accommodation market.
UK Property Market Trends
The resilience and growth of the UK’s serviced accommodation sector are underpinned by several key performance indicators and market trends:
- Occupancy Rates: Nationwide, serviced apartments achieved an impressive 80% occupancy in 2023, with some providers like Address Apartments reaching 84%.
- RevPAR Growth: Revenue per Available Room (RevPAR) for serviced apartments in the UK remained 19% above 2019 levels in the first half of 2024, showcasing sustained demand and robust pricing strategies.
- Regional Dominance: London continues to dominate the sector, accounting for 45% of the total supply and achieving the highest average daily rate (£208.80).
- Future Pipeline: London’s serviced apartment supply is projected to grow by 21% by 2028, surpassing Paris as Europe’s largest serviced accommodation market.
Factors Driving Growth in UK Serviced Accommodation
Several factors contribute to the surging demand for serviced accommodations across the UK:
- Changing Traveler Preferences: Today’s leisure and business travelers value flexibility, comfort, and the home-like amenities that serviced apartments offer.
- Rise of Remote Work: The growth of remote work and digital nomadism has led to increased demand for accommodations that blend living and working spaces seamlessly.
- Cost Efficiency: Serviced accommodations often prove more economical for extended stays, offering savings on nightly rates and the ability to self-cater.
- Corporate and Relocation Clients: Companies are increasingly opting for serviced apartments to house employees on extended assignments or relocations.
UK Serviced Accommodation Regional Highlights
- London: Achieving the highest average occupancy at 81% and the highest average daily rate at £208.80.
- Manchester: The city accounts for 6.3% of the UK’s serviced apartment supply and benefits from strong demand driven by business travelers and students.
- Leeds, Birmingham, and Edinburgh: These cities are emerging as regional hubs, supported by increased domestic tourism and corporate travel.
- Gorton and Levenshulme: These up-and-coming neighborhoods in Manchester offer affordable entry points for investors seeking high rental yields.
How CasaCity Can Assist
At CasaCity, we provide tailored solutions to help investors achieve success in the UK’s serviced accommodation market. Our end-to-end services include assisting with property furnishing to create inviting and guest-ready spaces, as well as offering expert property management to handle bookings, guest communication, and maintenance. By leveraging our market insights and operational expertise, we simplify the investment process, allowing you to focus on your goals while we ensure your property performs at its best. Let CasaCity be your partner in maximising returns and building a thriving portfolio in this dynamic sector.
Looking for an investment property in the UK?
As a sister company of CasaCity, Rothmore Property brings over 20 years of experience and access to over 60 property developments across the UK. Whether you're seeking investment opportunities in major UK cities like Manchester, London, or Birmingham, Rothmore’s extensive network and expertise provide a wealth of investment options. With a multi-award-winning team, Rothmore is perfectly positioned to help you identify high-potential properties and make informed decisions to build your portfolio.
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Conclusion
The UK’s serviced accommodation sector continues to thrive, driven by evolving traveler preferences, robust occupancy rates, and a strong pipeline of new developments. Whether you are an investor or an operator, the sector offers exciting opportunities to tap into a lucrative and growing segment of the hospitality industry.
FAQs
What is the average occupancy rate for serviced apartments in the UK?
The average occupancy rate for serviced apartments nationwide reached 80% in 2023, with London achieving the highest rate of 81%.
How do serviced apartments compare to traditional hotels?
Serviced apartments offer more flexibility, home-like amenities, and cost savings for extended stays, making them a preferred choice for long-term travelers.
Which cities are best for investing in serviced accommodations?
London and Manchester are top choices, with emerging opportunities in cities like Leeds, Birmingham, and Edinburgh, as well as neighborhoods like Gorton and Levenshulme.
How can CasaCity support serviced accommodation investments?
CasaCity provides end-to-end services, including property sourcing, market analysis, financial forecasting, and property management, ensuring investors achieve optimal returns.
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