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Europe: The serviced apartment sector in Europe is set to expand by almost 20,000 new units over the next five years, according to HVS.
HVS has released the findings of its Serviced Apartment Sector in Europe 2026 report. Research draws on a dataset of around 13,000 units across the continent.
Occupancy remained steady around 80 per cent across all markets, while average rate softened to €145, leading to a 3.5 per cent RevPAR decline year-on-year.
Performance across the UK varied between London and the rest of the country. Occupancy increased in London but average rates declined, while areas outside of London saw a pull-back in occupancy with a more contained rate decline. Similar RevPAR declines were recorded in and outside of the capital.
In Paris, occupancy increased in 2025 as corporate demand recovered after the 2024 summer Olympics and Paralympics. However, average rates in the capital corrected from the effect of the 2024 games. Areas outside of Paris saw occupancy plateau and, coupled with a softening of average rates, this led to a stronger RevPAR decline.
Cost per key
At the upscale end, costs per key of serviced apartments run 10-20 per cent below a comparable full-service hotel to 10-20 per cent above, depending on asset type and geography. At the midscale level, costs are broadly comparable to a midscale select-service hotel in most scenarios, though with a moderate premium flagged in countries such as France.
Quantity surveyors noted that serviced apartments can show a cost advantage in office conversion schemes, particularly where the existing structure, grid, façade and core arrangement support efficient apartment layouts without major structural alteration. Conversely, heritage buildings, constrained floor plates and hotel-to-serviced-apartment conversions were cited as scenarios where costs can escalate materially.
FF&E costs were consistently highlighted by multiple operators as a significant pressure, with several noting that the level of furnishing, fixtures, equipment and operational setup required to meet guest expectations can be higher than initially budgeted, including IT systems, access control, Wi-Fi infrastructure and back-of-the-house facilities.
Profitability
GOP trajectories were broadly in line with or better than hotels over the past three years, and several operators reported outperforming hotels “significantly”.
Although achieved room rates tend to run below those of comparable full-service hotels, the savings available on staffing and food and beverage operations mean that GOP margins can exceed those of equivalent hotel assets, in some cases by a meaningful margin.
Pipeline
Around 19,800 rooms are expected to enter operation in the next five years. Germany accounts for 23 per cent of supply, mainly concentrated in Berlin, Munich and Hamburg, followed by the UK with 22 per cent. The majority of activity in the UK is focussed in London, which represents 57 per cent of new supply within the country.
25 per cent of new units will be branded. Staycity Group has the largest pipeline with around 5,000 units expected to open over the next five years. Around 70 per cent of these openings will be opened under the Wilde brand, with the remainder under the Staycity brand.
Limehome is the second most active group within the sector, with a 43-property pipeline comprising around 2,200 units. The group has a strong focus on Spain with more than 70 per cent of its serviced apartments due to open in the country.
Marriott holds the third largest pipeline in Europe. Residence Inn accounts for many openings with a smaller number of StudioRes, Apartments by Marriott Bonvoy and other extended-stay concepts.
Home2 Suites by Hilton is also continuing its European expansion. Following the brand’s first opening in Europe in Dublin in May 2026, a second property is planned for 2028: a 128-unit hotel is currently under construction at Schiphol Airport in Amsterdam.
Transactions
Between July 2025 and June 2026, 12 serviced apartment transactions were recorded across Europe, comprising a total of approximately 900 units across seven markets. The UK and Spain were the most active markets in transactions recorded.
To read the full Serviced Apartment Sector Europe 2026 report, click here.
Highlights:
- The Serviced Apartment Sector Europe 2026 report found occupancy remained stable at around 80 per cent across approximately 13,000 serviced apartment units, while average daily rate fell to €145, driving a 3.5 per cent RevPAR decline.
- The European serviced apartment pipeline is expected to add around 19,800 units over the next five years, with Germany accounting for 23 per cent of new supply and the UK 22 per cent, led by London.
- Staycity Group has Europe’s largest serviced apartment development pipeline with around 5,000 units, followed by Limehome with approximately 2,200 units and Marriott International expanding its extended-stay brands.
- Serviced apartment operators reported gross operating profit margins matching or exceeding comparable hotels, supported by lower staffing and food and beverage costs despite softer average room rates.
- European investment activity recorded 12 serviced apartment transactions totalling approximately 900 units between July 2025 and June 2026, with the UK and Spain emerging as the most active real estate markets.
