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Europe: Research from international real estate advisor Savills shows that the European serviced apartment sector recorded approximately €1.2 billion of transaction volumes in 2025, accounting for around five per cent of total hospitality investment.
Savills analysed 26 European gateway cities, finding that serviced apartments account for eight per cent of existing accommodation stock, and 12 per cent of the development pipeline.
The team also reports that operators which were historically focused on single domestic markets are increasingly pursuing cross‑border expansion strategies across Europe, supported by institutional capital and “highly replicable operating models”.
Across Europe, regulations such as night caps, licensing regimes and stricter enforcement are “reducing the viability of informal short term rentals” which Savills believes will redirect demand towards “compliant formats”. Serviced apartments are expected to “benefit materially” from the interventions.
Richard Dawes, director of hotel capital markets at Savills, said: “The investment case for serviced apartments is no longer solely about demand growth; it is increasingly about market structure. Regulation is accelerating a shift away from informal supply, while fragmentation across Europe creates clear opportunities for scale, consolidation and professionalisation. For capital seeking resilient income with growth potential, serviced apartments are becoming a strategically important segment within European hospitality.”
Regarding performance, the European serviced apartment sector achieved 79 per cent occupancy and an ADR of €136 according to CoStar. Since 2019, underlying demand has grown at a compound annual growth rate of 5.9 per cent compared with one per cent across the broader hotel sector.
Thomas Emanuel, head of hospitality thought leadership EMEA at Savills, said: “This growth in demand is being driven by a combination of longer travel durations, increased flexibility in working patterns and Europe’s continued position as the world’s largest tourism region. In 2025, Europe welcomed an estimated 800 million international visitors, with forward indicators suggesting sustained mid‑single‑digit growth supported by intra‑European mobility, improving Asia‑Pacific connectivity and continued prioritisation of travel expenditure by consumers.”
The European Serviced Apartment Report can be read here.
Highlights:
- Savills reports European serviced apartment investment reached €1.2 billion in 2025, representing around five per cent of total hospitality real estate transaction volumes.
- Analysis across 26 European gateway cities shows serviced apartments account for eight per cent of existing accommodation stock and 12 per cent of the development pipeline.
- Institutional capital is driving cross-border expansion among serviced apartment operators, shifting from domestic-focused portfolios to scalable European platforms with replicable operating models.
- Regulatory changes limiting short-term rentals, including licensing and night caps, are expected to redirect demand towards compliant serviced apartment and aparthotel accommodation formats.
- Performance data from CoStar shows the sector achieved 79 per cent occupancy and €136 ADR, with demand growing at 5.9 per cent CAGR since 2019.
