A Growing Market

A Growing market with Serviced Apartments ?

The hospitality industry constantly evolves to accommodate (and provide accommodation for) new market segments and trends in travel. Two of these trends in recent years have been the need for longer-term stays and the desire to experience local culture.

The resulting evolution for the hospitality industry has been an influx of serviced apartments.

This week's newsletter looks at the need for serviced apartments and the advantages for travelers and properties.

Extended solutions

Over the past decade, serviced apartments have risen from being an outlier in the hospitality industry to one of the fastest growing sectors, with properties like Marriott, Accor, and Hyatt moving to maintain their share of the market.

Well-known and trusted global hotel brands are incorporating the serviced apartment model in their offering, giving the sector greater credibility. Real estate and property investors are becoming more interested in the industry because of the higher ROI of apartment models compared to traditional hotels.

Why does this happen?

IMAGE: LUXURY SERVICED APARTMENTS . HONG KONG . RIGHTS RESERVED

While there are many advantages for properties to invest in the growing sector, one of the most significant advantages would be the increased interest from travelers. The benefits of serviced apartments for guests range from space and family-friendly options to more leisurely, healthier, and less costly dining.

This solution provide enough space to separate your working life and your downtime, and that's crucial for the new travelers.

Two key trends are emerging in the market – a focus on lifestyle and community to enhance the quality of the experience for guests, and a move towards luxury, driven by the growth of Branded Residences at the top end.

The traditional branded residence concept is a hotel development with integrated or linked residences. They benefit from the hotel brand, management, and services, combining the comfort, space, and permanence of a home with a five-star hotel's full benefits and luxury.

One of the greatest examples is London's Four Seasons Residences at Ten Trinity Square. These luxury apartments include views overlooking the Tower of London and Tower Bridge from their private terraces, with interiors featuring the capital's top designers.

IMAGE: LONDON'S FOUR SEASONS RESIDENCES, TEN TRINITY SQUARE

No 41 is the most oversized apartment, with an internal area of 447 square meters over two floors and an external area of 175 square meters. Aimed at the corporate sector, high-net-worth individuals, the entertainment industry, and diplomatic staff, the residences show that London is in demand.

The trend shows little sign of abating. Marriott alone has more than 60 branded residential projects in the pipeline and plans to open 19 in nine countries.

Together Marriott, Four Seasons, and Accor Hotels represent over half of all hotel branded residences, with Marriot alone accounting for three-quarters of these.

North America is the most developed market, followed by Asia.

Dubai and London are showing strong growth. Since One Hyde Park, the first European residence at the Mandarin Oriental, the London market has seen an increase in branded residences at the top end of the market.

IMAGE: LUXURY SERVICED APARTMENTS. HONG KONG. RIGHTS RESERVED

The average length of stay for all bookings over the past two years is 50 nights.

2023: ON OUR WAY

Market trends for next year include new offerings and technologies to cater to different demographics, with options for millennial families, more experiences such as wellness facilities, and a greater focus on eco-design and operation.

And you, what do you think about this growing market?

Leave your comment.

We hope you had enjoyed your reading of a?LETTER FROM EPOCA.

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