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  • Writer's pictureRobin Lawson

Serviced Accommodation Growth: £1.7bn Sector Proves Popular with UK Business Travellers

Updated: 2 days ago

Serviced Accommodation Growth in the UK


In recent years, the serviced accommodation sector has experienced substantial growth, particularly among UK business travellers. A recent report commissioned by the Association of Serviced Apartment Providers (ASAP) and conducted by BONARD highlights that the sector's market value reached £1.7 billion in 2022. This growth has been driven by the increasing demand for flexible, all-inclusive accommodation that combines the comfort of home with the convenience of hotel services​​.



Key Findings from the Report


Market Supply and Economic Impact


The report provides an in-depth analysis of current market supply, revealing that there are over 56,700 serviced apartments spread across the UK. Professionally run serviced apartments, which account for approximately half of the market, generated £1.2 billion in turnover in 2022. Including independent and single-key operators, the total market value extends to £1.7 billion​​. The serviced accommodation growth has supported over 6,050 jobs, highlighting its significant contribution to the UK economy​​.


The report also indicates that serviced apartments have shown a remarkable recovery from the impact of the Covid-19 pandemic. By the end of 2022, bookings were 44% above pre-pandemic levels, showcasing the sector's resilience and adaptability​​.


Customer Profile and Demand


Serviced apartments cater to a diverse range of clientele, with business travellers making up the largest share at 45%, followed by tourists (27%) and professionals relocating to the UK (23%). The average length of stay is three days, but a notable portion of guests stays for extended periods, reflecting the flexibility and convenience that serviced apartments offer. The sector attracts both domestic and international guests, with a nearly equal distribution​​.


The report highlights that business travellers prefer serviced apartments for their spaciousness and home-like amenities, which include fully equipped kitchens, laundry facilities, and separate living areas. These features make serviced apartments ideal for longer stays, providing a comfortable environment for work and relaxation​​.


Regional Growth and Potential


The report identifies key regions where serviced accommodation growth is particularly strong. London leads with the highest market supply, accounting for 45% of the UK's serviced apartments. Other significant markets include Manchester, Liverpool, and Edinburgh, which have shown substantial growth in recent years​​.


The North East, including Newcastle, is emerging as a promising area for serviced apartment development. The region's vibrant business environment and growing professional population drive the demand for high-quality, flexible accommodation options. Investors are increasingly looking at the North East as a viable market for serviced apartments, attracted by the region's potential for growth and development​​.


Compliance and Regulation


Regulatory compliance is a critical aspect of the serviced apartment sector. According to the research, 71% of properties operate under the C1 use class, while 26% fall under C3. Ensuring that all properties adhere to these standards is essential for maintaining the sector's reputation and reliability​​.


The report calls for further professionalisation of the sector to enhance transparency and ensure that all operators meet the required standards. Recommendations include the establishment of a mandatory light-touch property registration scheme to level the playing field for all operators and promote consistent quality across the sector​​.


The Role of Clarice Carr & Co


Clarice Carr & Co, a leading residential investment consultancy, plays a supportive role in this expanding market, focused on Newcastle and the North East. While not directly managing serviced accommodation, we excel in property sourcing, project management, and consultancy, helping investors navigate the complexities of this lucrative sector. Our expertise ensures that properties meet the high standards required for successful serviced apartments, thereby contributing to the sector's overall growth.


By identifying prime investment opportunities and facilitating developments in regions like Newcastle and the North East, Clarice Carr & Co helps investors capitalise on the burgeoning demand for serviced accommodation.


Clarice Carr & Co's role extends beyond mere consultancy; we are instrumental in ensuring that the properties sourced and managed are well-suited to the serviced apartment market. Our insights into market trends and regulatory requirements help investors make informed decisions, thereby fostering a robust and sustainable growth in the serviced accommodation sector.


Serviced Accommodation Growth Potential


The serviced accommodation sector's impressive growth trajectory is a testament to its

ability to meet the evolving needs of business travellers. The findings from the recent report underscore the sector's economic significance and its potential for further expansion.


With companies like Clarice Carr & Co providing essential support through property sourcing and investment consultancy, the sector is well-positioned to continue its expansion, particularly in burgeoning markets like Newcastle and the North East. As the sector grows, it will not only enhance the travel experience for business professionals but also contribute significantly to the UK's economic landscape.


Want to know more? Check out our website or get in touch.

 

Frequently Asked Questions

What is the current market value of the serviced apartment sector in the UK?

How many serviced apartments are there in the UK, and where are they primarily located?

What are the main reasons for the rising popularity of serviced apartments among business travellers?

How has the serviced apartment sector recovered from the Covid-19 pandemic?

What regulatory standards do serviced apartments need to comply with in the UK?

What are the key recommendations for ensuring sustainable growth in the serviced accommodation sector?



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