The European Serviced Apartment Market is Growing – The Major Brands

The European serviced apartment market recorded strong performance in 2024, with occupancy increasing by 3.8% year-on-year and, despite stagnant prices, revenue per available room (RevPAR) rising by 4.4%.

While traditional hotels capitalized on higher average room rates, serviced apartments improved their performance, with occupancy reaching 83% compared to 82.5% in 2023, and RevPAR rising to €134 from €133 the previous year.

Prices remained relatively stable, with a 0.6% increase, reaching €162 compared to €161 in 2023.

These figures come from the latest report by consultancy firm HVS, titled “The Serviced Apartment Sector in Europe 2025”, which is based on an analysis of 6,000 units across Europe.

In London, demand continues to grow, reaching very high occupancy levels. However, this is accompanied by some slowing in the average growth rate – a pattern consistent with broader trends in the capital’s hotel sector. In contrast, other UK destinations show healthier average growth, indicating a more balanced performance dynamic outside London.

Paris exceeded the French national average in occupancy growth in 2024, mainly due to the Summer Olympic and Paralympic Games, which gave a significant boost to the local hospitality market during the events.

Stronger Demand from the Business Travel Market

The most notable trend in Europe’s serviced apartment market is the resurgence of corporate travel. The HVS report notes that this segment was the fastest-growing in 2024, with most operators expecting it to continue leading in 2025.

The top visitor source markets in 2024 remained stable compared to 2023: the United Kingdom, the United States, the Netherlands, Germany, and France.

Longer Stays, Flexible and Last-Minute Bookings

Long-stay bookings are making a comeback, whether for business assignments or “bleisure” – combining work and leisure. According to the report, this is a positive sign that the serviced apartment model fits the needs of the modern traveler, and that the sector is moving away from the shorter-stay pattern that had become the norm in recent years, returning to a more traditional booking profile. This trend enhances the operational viability of the model, which benefits from longer occupancy periods and lower costs compared to traditional hotels.

Changes are also evident in booking habits, with a clear trend toward flexible cancellation policies and shorter booking windows. This reflects a broader traveler caution and demand for flexibility – initially triggered by the pandemic and reinforced by ongoing economic uncertainty and geopolitical instability.

Challenges Remain Despite Positive Momentum

Operators highlighted significant challenges, such as:

Rising labor costs due to inflationary pressures and workforce shortages. However, serviced apartments have much lower labor costs than traditional hotels and were therefore less affected than other accommodation types.

Energy and raw material costs impacting operating margins, mainly due to environmental taxes and supply chain disruptions.

To address these challenges, the sector is turning to technological solutions: automated guest communication, smart energy management systems, contactless check-in, and personalized guest experience platforms.

16,500 New Units in Europe Over the Next 5 Years

The report identifies Spain, Portugal, Italy, the United Kingdom, Germany, and France as the most attractive markets for future serviced apartment expansion, thanks to strong tourism infrastructure and growing demand for flexible accommodation models.

The biggest growth opportunities are expected to come from renovations and building conversions rather than new builds, due to rising costs and increasing global uncertainty. Renovation projects also align more closely with sustainability goals and urban regeneration policies.

According to the report, the supply of new branded apartments is expected to grow by 16,500 units over the next five years. The UK leads with a 30% share of planned development, followed by Germany (20%), Spain, and France.

The companies with the largest investment plans for serviced apartments are:

Staycity – 4,500 units in the next five years, focusing on the UK (50%), Germany (11%), Portugal, Spain, Austria, the Netherlands, and Poland. 75% of projects will be under the Wilde brand.

Marriott International – 2,500 units by 2027, with brands such as Residence Inn, Apartments by Marriott, Marriott Executive Apartments, and Sonder, strategically targeting Turkey (32%).

Accor and Limehome – pursuing diversified approaches across the continent.