By Robert Alley, Brand Development Director, BWH Hotels GB
Robert Alley is Deputy Chair of the Association of Serviced Apartment Providers (ASAP), having previously held senior roles at Roomzzz Aparthotels and joined BWH Hotels GB in January 2024 as Business Development Director. His experience spans 30 years across various hospitality sectors, with a focus on flexible accommodations like aparthotels. His work in this area is supported by his leadership in the serviced apartment community, helping to shape industry standards and advocate for growth opportunities within this rapidly expanding segment.
The serviced apartment segment has rapidly evolved from a niche offering to a core component of modern hospitality. As preferences shift among both leisure and corporate travellers, this sector presents a compelling opportunity for hoteliers looking to diversify, innovate, and respond to changing market demands. The beauty of serviced apartments lies not only in their adaptability but also in the strong financial and operational benefits they provide to both hoteliers and investors.
For established hoteliers, entering the serviced apartment market is easier than ever, if the capital for investment is available. The flexible nature of serviced apartments means that hotels don’t have to overhaul their entire operation. Many properties are adding suites or apartment-style room types within their existing structures, which allows them to dip their toes into the segment without committing to an entirely new model. This adaptability allows hoteliers to offer a more versatile product to their guests, catering to longer stays, families, and business travellers who prefer more spacious accommodations. An example of this in our existing portfolio is the Best Western Premier Doncaster Mount Pleasant Hotel.
At BWH Hotels GB, we recently welcomed Dockside Aparthotel, BW Signature Collection by Best Western, a stunning new aparthotel, to our portfolio. It’s a prime example of how hoteliers can pivot to meet rising demand for flexible, apartment-style stays. The property boasts a mix of spacious suites, fully equipped kitchens, and a design that appeals to both leisure and corporate guests. The key takeaway here is that hoteliers don’t need to reinvent the wheel—by integrating serviced apartments into existing operations, they can enhance their value proposition while keeping operational changes manageable.
For hoteliers, this means serviced apartments offer a less complex, cost-controlled alternative to traditional hotels, particularly during times of rising inflation and operational costs. With 45% of UK serviced apartment guests being business travellers and 27% tourists the flexibility of the serviced apartment model caters to various demographics. Additionally, consumer preferences are shifting toward experiences that combine work and leisure, or wellness and sustainability—making serviced apartments a desirable option.
Source: http://www.resharmonics.com/blog/10-serviced-apartment-trends-to-watch-in-2024
One of the standout advantages of the serviced apartment model is the potential for significant cost control compared to traditional hotel operations. Serviced apartments tend to require less intensive daily servicing, with many guests staying for extended periods. This reduces housekeeping and maintenance demands, allowing hoteliers to streamline operations and lower costs. By catering to longer-stay guests, hoteliers also mitigate the constant churn of nightly check-ins and check-outs, which is resource-heavy.
For example, properties like this can offer reduced services, such as less frequent housekeeping rather than daily, and a reduced F&B offering, cutting down on operational costs while still meeting guest expectations. This operational flexibility means hoteliers can tailor services based on the guest demographic, helping to boost profitability without sacrificing guest satisfaction.
In terms of profitability, serviced apartments in the UK have outperformed traditional hotels in key financial metrics. The Gross Operating Profit Per Available Room (GOPPAR) for serviced apartments has seen a 20% uplift compared to the wider hotel sector. The operational efficiencies, especially through the adoption of technology and automation, have enabled these properties to maintain lower payroll costs, around 21.5% of total revenue, while regional UK hotels faced a 20% increase.
It’s no secret that investor interest in the serviced apartment market is surging. The growing demand for flexible, self-contained accommodations has caught the attention of real estate investors who recognize the long-term value in this segment. Unlike traditional hotels, serviced apartments can cater to a broader range of guests, including extended-stay business travellers, relocation clients, and even those seeking temporary housing during renovations or relocations.
The UK serviced apartment sector has seen significant growth in recent years, fuelled by both investor interest and consumer demand. By the end of 2024, the market is projected to expand by 5.7%, with over 27,000 units available, and London remaining the leader with 45% of the total supply. Manchester is the next biggest market but represents only 6.3% of the total UK stock.
Source: https://www.resharmonics.com/blog/10-serviced-apartment-trends-to-watch-in-2024
Investors are drawn to the serviced apartment model because it offers steady returns and relatively lower operational risks. As the sector continues to grow, particularly in cities like London, Manchester, and Liverpool, we’re seeing increasing inquiries from developers and investors eager to capitalize on the rising popularity of this hybrid accommodation.
Serviced apartments are perfectly positioned to cater to the increasing overlap between business and leisure travel. Today’s corporate travellers often extend their business trips into personal getaways, and serviced apartments provide the flexibility and amenities they need for these longer stays. With features like kitchens, living spaces, and on-site laundry, they offer a more home-like environment than traditional hotel rooms, which appeals to both corporate and leisure travellers alike.
Data from a recent STR Global report reveals that demand for serviced apartments increased by over 12% year-on-year, driven largely by corporate relocations, project-based work, and the growing remote work culture. Moreover, post-pandemic trends show a heightened interest in accommodations that provide more space and autonomy, further fuelling demand for this segment.
The serviced apartment segment is no longer a niche—it’s an integral part of the hospitality landscape, offering a flexible, cost-effective solution for hoteliers, investors, and guests. The growth of properties like Dockside Liverpool, signals a shift in how hoteliers are thinking about their product offering. Whether it’s through adapting existing spaces or launching new properties, hoteliers now have the opportunity to diversify their portfolio and tap into a booming market that shows no signs of slowing down.
As demand continues to rise across both the leisure and corporate sectors, hoteliers who embrace the serviced apartment model can expect to see robust returns, lower operational costs, and greater investor interest. This is the time to explore the potential of this thriving segment and position your property to meet the evolving needs of modern travellers.
Contact us today to discuss how BWH Hotels can help you on this journey and see how our portfolio of brands, including long stay, could impact your operations.