Serviced apartments in the UK experienced a slight increase in revenue in the first half of 2018 despite a marginal drop in occupancy rates – with Edinburgh and London the hardest hit.
Data collected by the Association of Serviced Apartment Providers (ASAP) and market data experts STR found that while occupancy fell by 0.6% in the first half of 2018 to an actual level of 79%, increases in the average daily rate (ADR) rose along with revenue per available room (RevPar).
Across the UK ADR rose by 1.2% to £140.28, while RevPar increased by 0.6% to £110.84.
Chief executive of the ASAP James Foice said increased supply was creating challenges for the sector – particularly in London where occupancy was down 1.1% to an actual level of 81.1%.
ADR in London also fell by 2.3%, bringing RevPar down by 3.3% to £146.73.
However, Foice added that it was “really encouraging to see that operators remain confident about the future”, with robust expansion plans across the industry.
The decline was more significant in Edinburgh, where occupancy fell by 8.5% along with an ADR drop of 3.5%. RevPar declined by 11.85% to £77.86.
However the UK average was levelled out by Manchester and Birmingham, with occupancy rates rising and RevPar growing by 2.7% and 6.3% respectively in the cities.
Director of business development for STR Thomas Emanuel said: “Despite the slight decline, the UK serviced apartment sector is still seeing strong actual occupancy levels.
“However, new supply at the levels we are seeing in this sector are bound to make an impact, and those markets with the highest supply increases are seeing the highest impact on occupancy performance.
“Operator confidence remains strong, and rates are growing accordingly.
“These occupancy challenges are likely to continue in the future due to a very robust pipeline across the sector, although demand should also continue to grow”
Pictured: Aparthotel Native Bankside, London, which is due to launch in August