The UK serviced apartment sector saw occupancy levels fall in the first quarter of 2018 with Edinburgh recording the sharpest decline.
The Association of Serviced Apartment Providers (ASAP) and STR reported a “challenging” start to the year with a 1.4% decrease in occupancy to 74.9% compared to Q1 2017.
However, the average daily rate (ADR) rose 3.5% to £133.87, resulting in a 1.9% growth in revenue per available room (revpar) to £100.31.
Following record-breaking results in 2017, Edinburgh serviced apartments experienced the biggest drop in occupancy levels of any UK city, down 10.4% year-on-year to 65.1%. ADR decline was more marginal at -0.5%.
Birmingham posted a strong performance. At 9.1%, it had highest growth in revpar, while occupancy increased by 6.9% to 82.2%, and ADR was up 2.0% to £85.50.
London’s occupancy performance was more in line with the national average, down 1.8% to 77.4%. Revpar fell marginally at 0.4% to £134.25 due to a 1.4% ADR growth to £173.39.
James Foice, ASAP chief executive, said: “We know that Q1 of this year has proved to be more challenging for some operators, following on from the strong growth last year.
“One of the reasons behind this is that inbound leisure business is slightly down on last year, largely due to the pound having strengthened against the euro, the US dollar and the Chinese yuan in recent months, but it’s good to report that the majority of operators in our rapidly expanding sector remain upbeat regarding prospects for the rest of this year.
“The sector’s expansion continues as planned with over 2,000 new apartments set to open in 2018 and further new developments expected to be announced later in the year.”