Serviced Apartments are typically high quality individual units with 1, 2 or 3 bedrooms, fully-equipped kitchens and well-appointed living areas.
They’re called ‘serviced’ apartments because they usually offer hotel-like benefits, such as maid service, 24-hour reception/concierge facilities and unrestricted access to onsite amenities, like pools, gyms, restaurants and bars.
Hotels are no longer the default choice
Technology has totally transformed the way we choose our leisure travel and accommodation. Specialist sites, such as Airbnb, have opened up a huge range of options to suit all budgets, lifestyles and tastes and have changed travel accommodation expectations. The internet is a massive forum where travellers share their accommodation experiences, good and bad.
Decades of foreign travel have set a benchmark for customer expectations; standards of the whole travel experience are high and continue to rise.
To those on average incomes paying their own way, hotel room rates often come as something of a shock. Even business travellers today tend to seek out more budget-friendly options.
And many of us feel restricted by the traditional hotel set-up; away from the major resorts, how many hotel rooms can comfortably accommodate large, multigenerational families for instance? Small wonder, then, that Serviced Apartments are finding enormous favour worldwide.
Business and leisure travellers alike appreciate the ‘home-from-home’ environment they offer; total independence to come and go, eat, drink and sleep as you please, but with a degree of service included that you won’t find in a private rental.
Demand for Serviced Apartment leisure accommodation is growing
According to The Apartment Service, there are now about 750,000 Serviced Apartments worldwide – an increase of 80% in just 8 years. In the UK, the sector is set to double in size between now and the end of 2017, making it the fastest growing in hospitality (Savills).
Significantly, this growth will not be concentrated in the obvious commercial centres, such as London, Manchester and Glasgow. James Foice, managing director of the Association of Serviced Apartment Providers, finds that “the expansion to every corner of the UK is particularly exciting”.
Already 2016 has seen new developments in secondary city tourist hubs, such as York and Chester and, with record tourist numbers in the UK along with post-Brexit staycationers, the leisure demand for Serviced Apartments would appear to be set for a boom.
Foice certainly believes they have a major role to play in the future of the UK hospitality industry – “We will have the critical mass of stock to ensure consumers will have the option of booking a Serviced Apartment wherever they choose to travel in the UK,” he says.
Record visitor levels across the UK
Over 36 million overseas visitors came to Britain in 2015 – an increase of 50% over the previous 12 years. Up until the end of May 2016, before the start of the high season, a further 14 million had been welcomed – up 3% on the previous year.
Locals were exploring too – 7.3 million UK residents took a holiday at home during the first quarter of 2016, representing a year on year increase of 10%.
And since then, the referendum vote to leave the EU meant that the pound dropped to its lowest level against the $US for 30 years, meaning that the UK was better value to overseas visitors than it had been for generations. By the same token, the average foreign holiday for a UK family of four went up by £245.
This would suggest a long term boom for the British tourism industry, and an unprecedented demand for overnight accommodation.
Locations and facilities – crucial for visitor numbers
As ever, a great location is absolutely essential. An investment property needs large, regular visitor numbers to sustain demand.
There is no doubt that the UK is blessed with stunning locations that are the equal to any – be it our cities, our countryside, our historic houses or, especially, our spectacular cliffs and beaches.
The South West, with over 600 miles of breathtaking coastline, has been voted the UK’s best visitor regions for four years in a row and accounts for 23% of all English domestic tourism and 40% of seaside holidays (which, considering that 58% of Brits will take a full holiday or minibreak by the coast this year, is a considerable number).
The more visitor attractions there are in close proximity, the greater the likelihood of consistent, extended occupancy.
Accessibility is important too; good road and rail links encourage tourism, and private parking is a big plus.
Ideally, there’ll be a variety of bars, restaurants and cafes within walking distance of the apartment. A shopping area is always appealing – a small supermarket to stock up the apartment’s fridge along with general browsing and souvenir outlets will prove popular.
A Serviced Apartment is the ideal base for a beach holiday – the multi-bedroom concept makes it perfect for family and/or friends to stay together, and there’s plenty of space for all the snorkels, lilos and associated seaside paraphernalia. Nobody on holiday wants to be told that breakfast finishes at 9.30 or to be woken by housekeeping when they’re having a lie-in; in a Serviced Apartment, guests can set their own timetable and totally relax.
The apartment itself will be comfortable, spacious, well-furnished and presented in first-class condition, ideally by an onsite management team who look after the investor’s property and guests’ needs 24/7.
Fully equipped kitchens and inviting lounge areas are a must and allow visitors to feel truly at home.
The most successful properties will be those with guest facilities to keep residents and their children occupied in the event of bad weather. State of the art flat screen TVs and Wi-Fi in the apartment should come as standard, and other facilities, such as indoor pools, spas and gyms, will all help create a memorable holiday experience.
Obviously, nobody is forecasting the imminent demise of the hotel industry or the private rental accommodation sector as a whole; but anybody with an eye for a property investment with a generous long-term fixed yield income could do a lot worse than investigate the emerging Serviced Apartment sector.