Staybridge Suites, the serviced apartment brand of InterContinental Hotels, has now signed contracts to open four of its properties in the UK by 2008.
The company says that 18 more will follow in the next four years.
At the same time, VisitLondon, the tourist board for the UK capital, reports that with around 4,300 rooms the number of serviced apartments in the city has grown by 20% since 2002.
A briefing paper by PricewaterhouseCoopers (PWC), Hospitality Directions Europe, reported in BTE last month, said that while serviced apartments in the US were big business, they had made little impact in Europe – but this was about to change.
But players in the serviced partment sector say this change is already well under way with huge growth in the UK over the last 18 months. One claimed the "tipping point" had already been reached.
Jo Layton, director of sales and marketing, EMEA for BridgeStreet Worldwide, who previously worked for Marriott and Hilton, said: "When I joined BridgeStreet two years ago, I did not know what serviced apartments were.
"But with Staybridge then looking at coming into the UK market, I thought it would be an interesting market to be in.
"Now I think we have reached the tipping point and they are seen as an alternative to a hotel stay."
She said BridgeStreet, the biggest player in the UK market, had doubled its inventory in the last two years to more than 1000 properties and now had a presence in Manchester, Birmingham, Leeds and Heathrow as well as London.
She counted among her clients PWC, banks, finance houses and manufacturing companies with many signing corporate deals. A lot of companies which were re-locating staff or, in the case of banks, training or recruiting staff, made great use of apartments.
She said that procurement managers were now anxious to give their travellers more choice and apartments offered both more privacy and more space. She said a one-bedroomed apartment also came with a kitchen, bathroom and lounge.
Ms Layton said demand in London was high with occupancy around 85-90% - "occupancies you would pray for as an hotelier."
Jo Redman, sales director for SACO Apartments, which runs a worldwide network of apartments, said not only were travellers "fed up" with using hotels, but TMCs were now "waking up" to serviced apartments where in the past they had been reluctant to push them.
Like Ms Layton, she said that apartments were much cheaper than hotels, between 25-30% less.
Her clients, besides banks, included Rolls-Royce and currently an IT company which was doing a major nine-moth job in Bath and was accommodating its workers in apartments during the week.
"Occupancy varies from location to location,” she said. “It can be 95% in one location in one month but 60-70% elsewhere in the same month. It does vary."
Lorna Keene, business development manager for Clarendon Serviced Apartments and chair of the Association of Serviced Apartment Providers (ASAP), said the market had "grown hugely in the last one and a half years."
Her company had gone from no apartments to 125 in the Canary Wharf area of London in just 18 months. Again the clients were banks and oil companies.
Her explanation for the growth was that apartments provided more benefits for travellers. "I think people using them are more and more culturally diverse, like people training to work for banks – and they like to cook their own food. If they are away for six weeks, they can have their families to stay.
“For the companies, there are cost savings, no restaurant or bar bills. Most apartments have broadband connections and the telephone charges are standard BT prices. There are a lot of financial benefits while the residents have a home from home lifestyle," she said.
SACO already has apartments available in 90 cities around the world, including Barcelona, Amsterdam and Copenhagen.
BridgeStreet is also looking to expand. It has an office in Paris and plans to move into continental Europe as well as the Far and Middle East. Staybridge too has said sit will expand onto the continent if the UK properties go well.
With hotel rates rising in London by around 10% compared with a year ago without any major rise in occupancy, this may just be the time when apartments do become a serious alternative to hotels.
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