With a surge in market growth, we explore why now is the time to invest in Serviced Accommodation
. Serviced apartments are typically 1, 2 or 3 bedroom apartments in prime locations, with fully-equipped kitchens and well appointed living areas. These properties are ideal if you are looking for a low entry level and great income generating property investment that is hands-off and hassle free.
Hotels are no longer the default choice
Technology has totally transformed the way we choose our travel and accommodation. Specialist travel websites, such as Airbnb and Booking.com have opened up a huge range of options to suit all budgets, lifestyles and tastes so we no longer have to feel restricted by the traditional hotel set-up.
Business and leisure travellers alike appreciate the ‘home-from-home’ environment that serviced apartments 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 accommodation is growing
According to The Apartment Service, there are now over one million serviced apartments worldwide – an increase of 80% in just 8 years. In the UK, the sector was forecast to double in size between 2016 and the end of 2017, making it the fastest growing in hospitality (Savills). Further to this the outlook for 2018 and 2019 is just as positive.
Significantly, this growth isn’t just concentrated to the larger UK cities, 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”.
Over the past three years we have 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.
Record visitor levels across the UK
2017 was another record breaking year for inbound tourism to the UK in terms of both visits and spend. There were 39.2 million overseas visits to the UK in 2017, up 4.3% on 2016, with these visitors spending £24.5 billion, an 8.7% increase on 2016.
Locals were exploring too – with more than half of us taking our summer holiday in the UK this year. Since referendum vote to leave the EU and the decrease in the value of the pound the UK was more appealing and better value for money to over seas visitors than it had been for generations. Since 2016 the average foreign holiday for a UK family of four has also dramatically increased which 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 or our countryside.
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.
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