The European serviced apartment sector recorded a solid performance in 2024, supported by robust leisure demand and a recovering corporate segment.

In spite of above-average increases in supply in this asset class, the occupancy levels observed amongst the serviced apartments surveyed exceeded expectations.

While traditional hotels mostly capitalised on average rate growth, serviced apartments saw performance improvements primarily led by rising occupancy. Our analysis of approximately 6,000 units across the continent provides a comprehensive snapshot of the sentiment surrounding serviced apartment operations across Europe, highlighting the strengths and challenges faced by this increasingly competitive asset class.

Performance Review

Our performance analysis indicates that occupancy increased by 3.8% between 2023 and 2024. However, average rates remained broadly flat over the same period, resulting in a 4.4% increase in RevPAR. Over the same period, traditional hotels’ performance in Europe showed a lesser increase in occupancy and capitalised on average rate growth overall.

These figures for serviced apartments appear to be more in line with their typical operating model, where occupancy tends to take precedence over average rate. They may also suggest that the sector is shifting back toward a more traditional booking pattern, moving away from the shorter-stay model that had become more common in recent years.

Chart 1: 2024 Serviced Apartment Performance Led by Occupancy Rates (%)

Source: HVS Research

The responses to our Serviced Apartment Operators Survey indicate that occupancy levels in most European markets have increased, with the exception of properties in the Netherlands.

Our analysis shows that occupancy rates marginally decreased in the Dutch market, alongside static average rates, leading to a decrease in RevPAR. This performance reflects a similar trend to traditional hotels, with the market plateauing in 2024. Serviced apartments in other markets recorded healthy increases in occupancy levels.

Overall, hotel performance across the UK remains stable, with occupancy holding steady and average rates showing inflationary growth. However, it’s important to note that currency exchange effects are inflating the achieved rate by 3.5%. Performance trends vary regionally. 

In London, properties continue to build demand, reaching very high occupancy levels. However, this has come with some softening of the average rate, a pattern consistent with broader trends observed in the capital’s hotel sector. In contrast, other UK destinations are demonstrating healthier average rate growth, indicating a more balanced performance dynamic outside of London.

Paris outperformed the French national average in terms of occupancy growth in 2024, largely driven by the Summer Olympics and Paralympics, which provided a significant boost to the local hospitality market during the events. The occupancy growth came at the expense of average rates, but the city still achieved year-on-year growth in RevPAR.

Operators’ Sentiment

In 2024, the serviced apartment sector demonstrated strong resilience and adaptability amid shifting travel behaviours and rising operational pressures.

Our operator sentiment survey explores some of the main challenges faced by operators over the year, while also highlighting the potential of technology and its growing adoption to enhance efficiency. Looking ahead, confidence in the sector remains high, with expansion plans focused on core European markets and continued alignment with the modern traveller’s needs.

In 2024, corporate demand emerged as the fastest-growing segment, fuelled by a slightly delayed post-pandemic rebound and the continued normalisation of business travel. Looking ahead, just over half of respondents expect the corporate segment to remain the primary growth driver in 2025, highlighting its resilience and challenging the perception that the pandemic had permanently reduced the importance of corporate travel.

By contrast, only a quarter of those surveyed believe that the MICE or leisure segments will see the most growth in 2025, reinforcing the current strength of the corporate market.

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