…or just another flash in the pan?
SA are the new Buzz words in the industry but before we jump on in we need to do some DD and number crunching.
The Association of Serviced Accommodation Providers (ASAP) has just released the findings of a unique survey, jointly with Savills, which confirms that the sector is on track to double in size in the UK in the next 2 years.
The sector, as of today, has a relatively small market share of 3.1% of all hospitality sectors ie 19,000 units. However the survey confirms that both national and regional operators in the UK are on track to increase the number of Serviced Accommodation units they operate by some 122.3% and 82.2% respectively, effectively doubling the total number of units across the UK.
The sector is actually expanding rapidly across the whole of the UK, not just in London, with Scotland and the Midlands in particular set for very significant growth.
James Foice, Managing Director of ASAP commented: “This is the breakthrough moment for the UK Serviced Accommodation sector, a complete game-changer! Our joint report with Savills confirms the sector will be the UK’s fastest growing hospitality segment to end 2017, with average annual growth of 8.4% for both 2016 and 2017. This growth will position the Serviced Accommodation sector as a mainstream accommodation choice, a key player within the hospitality industry as a whole. We will have the critical mass of stock to ensure the consumer will have the option of booking a serviced apartment wherever they choose to travel in the UK.
The expansion to every corner of the UK is particularly exciting: so while the most significant new developments are in our largest cities – London, Birmingham, Liverpool, Manchester, Edinburgh, Glasgow, it’s great to see new openings in 2016 in secondary cities including Reading, York, Chester, and Aberdeen.”
There is concrete evidence to suggest that this increase in supply, is also helping to achieve much greater consumer awareness, due also in part to AIRBnB raising the profile of alternative accommodation including Serviced Accommodation. SA’s are really hitting the right note with the increasingly independent business or leisure traveller, who now demands more flexible lodgings, including the ability to cook and enjoy more living space, while offering more of a ‘home-from- home’ experience.
See what some of the key operators with the most significant new developments in the next 2 years have planned:
Staycity: on track to treble their estate from 1,000 to 3,500 units; opening in 2016 in London, York, Birmingham in the UK as well as Marseille, France.
Go Native: expanding right across the UK, their portfolio will ‘more than double’ to over 3,000 units including new locations in Manchester, Bristol, Newcastle, Glasgow and Reading.
SACO: doubling in size with 6 new openings planned in the UK & Ireland including London, Edinburgh and Aberdeen.
Lamington UK: a 10 fold growth to 1,000 rental units by 2020.
PREM Group: set to open in 12 new locations in the next 3 years starting with a new opening in Glasgow (Jan 2016) and further new developments planned for Antwerp, Gent, Rotterdam, Amsterdam and the Hague as they strengthen their presence in mainland Europe.
Globally the outlook is equally exciting with the Savills/ASAP survey confirming the larger global brands will increase by an average of 47.2% by the end of 2018 delivering a total 112,500 new units. ASAP’s major global players have confirmed their future pipeline:
The Ascott Limited – the world’s largest owner-operator – is forecasting it will double its portfolio to 80,000 units by 2020, and many people are expecting 2016 to be the ‘year of Serviced Accommodation’ worldwide.
Marie Hickey, Associate Director, Savills commented:
‘There is clearly the capacity to absorb this projected expansion. Operational performance continues to improve and with overseas business visitor numbers to the UK also reporting an upwards trend, the outlook for underlying demand remains extremely positive.
So to the question “Should we be thinking about Serviced Accommodation as a long term investing strategy?” We would say a resounding YES! But get educated first …. and we can help you there!