Although the global picture is favourable, collectively the debt-laden Eurozone’s
economic prospects are uncertain. The EU27 is made up of the biggest economies amongst
the European Union’s 47 member countries and accounts for 80% of the Europe’s total
population. Collectively the EU27’s gross domestic product (GDP) is comparable to
that of the US. Within the EU27, the largest economies are Germany, followed by
the UK, France, Italy and Spain.
The Apartment Service estimates that the European serviced accommodation sector
(including hotels) was worth ˆ150 billion in 2009, a fall of 18.9% on the previous
year. In the same period the extended stay sector increased its market share by
over 6% whilst average hotel room rates fell by 13%.
However one of the most striking differences between the serviced accommodation
sectors in Europe and the US is the lack of brands. 75% of US hotels belong to a
brand; in Europe it is 25%, and most are independently operated. This is reflected
in the serviced apartments sector too.
Despite the EU27 and the US being evenly matched at GDP level, Europe has around
15% of the stock of serviced apartments available in America. That stock is mainly
in the extended stay category, with corporate housing being quite rare by comparison.
Properties offering serviced apartments tend to be permanent operations with a wide
range of service levels provided. This is mainly due to the types of leases and
rental terms demanded by property owners, Typically rental agreements are for 1
– 5 years, often without a break clause. Unlike the US there are few apartment communities.
Despite the gloomy economic outlook and shortages of finance, serviced apartments
supply in Europe is still growing.
In 2011 Oakwood announced the addition of 48 units to their London portfolio to
meet rising demand for corporate housing in the United Kingdom. Meanwhile Adagio
has acquired Citéa to become European no.1 in the extended stay segment, with almost
10,000 apartments and revenues of around ˆ160 million. The group aims to manage
130 aparthotels by 2015, generating ˆ330 million in revenues.
London is Europe’s most expensive city for serviced apartments, ahead of Paris and
Moscow. Based on rates for studio apartments, the major locations for serviced apartments
in the region are as follows (in descending order of average weekly rate).
Most expensive European cities for serviced apartments