Serviced apartments are increasing their foothold in the UK market, according to new research published today.
The Hotel Bulletin: Q2 2015, drawn up by AM:PM, HVS and AlixPartners, states that the segment is on the cusp of maturing from niche to mainstream.
It said the shift is "not only in the eyes of consumers but the brains of investors, developers and operators".
"The serviced apartment model is best suited to high population, metropolitan areas with a deep pool of large employees, strong public transportation links and a readily accessible range of nearby amenities and services," the report said.
London dominates the supply of serviced apartments with more than 55% of the UK total - compared to 23% of the total of UK hotel bedrooms.
The report also showed the majority of cities reviewed recorded revpar (revenue per available room) growth, albeit at a slower rate than experienced in the previous eight quarters.
Ten of the 12 cities recorded revpar growth; however, the average growth of 4% was the lowest recorded since Q1 2013.
London's revpar decreased by 3% in Q2 2015, but the report said performance trends historically lag 12 to 18 months behind supply trends. The contraction could be partially due to a significant increase in supply from January 2012 to December 2013, according to the report.
In Q2 2015, the 11 regional cities showed average revpar growth of 5%, although signs of the market slowing which were identified in the previous quarter continued in Q2 2015.
The top performer in this quarter was Glasgow with 14% revpar growth, while the worst performer was Aberdeen - which, for the second consecutive quarter, was the only regional city to record a decline.
Other cities considered in the report were Liverpool, Birmingham, Cardiff, Leeds, Manchester, Bath, Newcastle, Edinburgh and Belfast.
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