Occupancy in the UK serviced apartment sector was 75.9% in Q1 2017, up 2% year-on-year, despite a mixed regional performance.
Figures published by the Association of Serviced Apartment Providers (ASAP) and benchmarking firm STR show that London recorded the highest occupancy for the period at 78.3%, up 4.3% on 2016.
Average daily rate (ADR) in the capital also saw healthy growth of 7.7% to £170.97.
But Birmingham and Manchester both reported a fall in Q1 occupancy.
Birmingham saw occupancy decrease by 6.6% year-on-year to 77.2%, while Manchester was down 5.8% to 76.6%. ADR in both cities grew by 3.1% to £84.23 and 0.7% to £95.32 respectively.
Edinburgh's occupancy was flat at 72.9% but with a 3.2% rise in ADR to £90.66. Liverpool reported a 3% increase in occupancy to 71.9% as well as a slight rise (0.6%) in ADR to £81.99.
STR director of business development Thomas Emanuel commented: "As we've seen in the hotel industry, the UK serviced apartment sector is currently benefiting from strong demand as the pound devaluation makes travel to the UK more affordable.
"As a major world hub with a wide variety of accommodation options, it is quite encouraging to see that this uplift in business has extended to serviced apartments, confirming that there is definitely strong consumer interest for this sector."
James Foice, chief executive of ASAP welcomed the broadly positive figures in a challenging period, which he warned is set to continue.
He said: "It's good to see our sector achieving stronger quarter one occupancy compared to the first quarter in 2016 which was particularly challenging. Anecdotal evidence from a cross-section of our members across the UK suggests many operators are cautious about the coming months against the backdrop of the uncertain economic outlook.
"But it's encouraging to see stronger leisure business particularly in London as the appeal of our serviced apartment product broadens to leisure travellers with the increase in supply, particularly in the aparthotel segment."
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