Editor: With Savills predicting an increase in UK hotel market activity this year, perceived stability in the market and the continued growth of the international tourist and staycation market, hotels are not alone in recognising the opportunities current market conditions offer.
We have seen a noticeable rise in serviced accommodation, be it aparthotels, serviced apartments or co-living developments.
A few years ago, some predicted that the increase in these accommodation models would erode traditional hotel market share. As the Savills research shows, this has not been the immediate case and the latter have continued to thrive. Hotels are not only learning from these newer models but, in many cases, co-opting them either as a fully integrated offer or creating a dual-branded concept. They are offering more immersive experiences, using design to help tell the ‘neighbourhood story’ and opening up spaces such as bars, restaurants and gyms to non-guests.
At the same time, aparthotels have steadily been reducing their key size to compete in urban locations with a more traditional hotel offering. In London, the UK’s biggest market, rising land values and changing consumer demand have also driven a reduction in room size to a comparable level.
While hotels have seized every opportunity to evolve by incorporating elements from serviced models into their offer, they perhaps need to keep an eye on the challenge from co-living as the year progresses.
In recent years, we have seen an explosion in the growth of co-living accommodation as companies look to service the rental market with a well-marketed, service-led offer. Residents typically have their own bed and bathroom but share other facilities such as kitchens and workspaces.
Co-living has previously been a longer-term option, but many providers such as The Collective are incorporating more flexible, shorter-term offers. In this way, it could be said that while hotels are co-opting serviced apartments or aparthotels into their offer, co-living providers are now servicing the extended-stay market.
Paul Wells, partner, Dexter Moren Associates