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UK serviced apartments sector continues to see growth in 2014

The first quarter of 2014 has shown that UK regional serviced apartments have seen a year-on-year increase in corporate demand of +10.2% and a +2.7% in occupancy growth to 72.2% according to STR Global and the Association of Serviced Apartment Providers. The report also shows that London based apartments have pushed occupancy to 77.8% over the quarter and revPAR (revenue per available room) has grown by +2.2%.

Corporate demand for serviced apartments has continued to grow throughout 2013 and into 2014 with many businesses focusing on cost control. Last year Savills reported that revPAA (revenue per available apartment) grew 16%, far exceeding that seen in the hotel market where REVPAR growth averaged 4.1% during the same period. Occupancy and rates also grew in the UK serviced apartment market in 2013 and is set to continue throughout 2014.

According to popular serviced apartments broker, Refresh Accommodation they have seen the number of corporate long stays (28+ nights) grow 4.99% to 17.59% year-on-year from January to June 2013 to the same period in 2014. Refresh Accommodation also revealed that London visitors preferred to stay in studio apartments (38.89%) with a silver star rating (54.8%). The top three locations being Chelsea and South Kensington (25%), City and East London (18.06%) and Central and West End (17.13%).

Chris Jerome, Business and Development Manager at Refresh Accommodation said: “2014 has proven to be an exciting year for us; occupancy has grown considerably year-on-year and I’m confident that this trend will continue in 2015. “I believe serviced accommodation offers businesses all they require from a corporate stay. From free Wi-Fi to a fully equipped kitchen, serviced accommodation provides all the home comforts you need away from home. ”

Serviced accommodation has been evolving since 2013 and has become a recognised sector in the UK. According to Savills the number of London units is expected to rise by 23.8% to 8,664 by 2015. The firm has reported that investment in serviced apartments in the UK totalled £123.5million, 5% of total UK hotel sales in 2013. From this, Savills predicts that UK investment in the market could triple by 2018.

The rise in popularity could largely come down to price. Hotel prices are set to increase by two percent after a flat growth rate in 2013, according to accounting firm Price Waterhouse Coopers (PWC) the popularity and growth of the UK serviced apartment market could increase further. The accounting firm continued to explain that the flat growth rate in the previous year was caused by the huge spike in hotel accommodation prices buoyed by the 2012 Olympics. 



London continues to be the main focus, with areas Chelsea and South Kensington, City and East London and Central and West End becoming the most sought-after locations for corporate stays.

www.refreshaccommodation.com's booking data shows that demand is rife and they predict that occupancy will continue to grow throughout the rest of the year.

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