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The serviced apartments sector is set to double in the next four years, according to a new industry report.
Currently there are around 750,000 serviced apartments in the world but this is set to grow dramatically due to demand from corporate clients.
The Apartment Service’s Global Serviced Apartments Report 2015/16 found that the number of apartments globally increased by 14 per cent since the last report in 2013. The overall market has grown by 80.1 per cent since 2008.
This has been driven by higher demand from companies with 72.7 per cent booking more apartments for staff on assignment or doing project work.
Charlie McCrow, CEO of The Apartment Service, said that he expected growth to continue in the next few years as property investors continue to show “significant interest” in the sector.
The report found that 69 per cent of serviced apartment operators planned to increase their portfolio of apartments in the next two years, with the majority of this growth coming in Europe and Asia.
“Our world is getting more exciting by the month, with continued and growing interest both from those that want to use and those that want to provide serviced apartments,” said McCrow.
“This increased interest has also raised questions for the sector but is also helping to clarify what customers and suppliers want from each other.”
The report predicts that demand for serviced apartments would be driven by “millennial” travellers who will be “enthusiastic adopters” of this kind of accommodation.
Overall, 81.5 per cent of survey respondents said they preferred to stay in apartments rather than hotels – this was up from a figure 78 per cent in 2013’s survey. The biggest reason for this preference was the ability to cook or entertain, followed by privacy and then the overall apartment environment.
McCrow added that the serviced apartment sector needed to “bring more clarity to the disparate products” offered by suppliers.
“The theory is that greater product consistency and growing brands will drive consumers to base their purchasing choices on points of difference between operators’ brands,” he said.
“However, we believe that part of the appeal of serviced apartments is that no two products are ever completely identical.”