Netherlands: A new report from Horwath HTL says that the serviced apartment sector is the fastest growing segment of the hospitality industry in the Netherlands.
The number of branded serviced apartments providers has increased exponentially over the last three years, says the report. Stimulated by the increase of supply, the demand has also increased, with occupancies and average room rates for serviced apartments continuing to rise.
Despite the fast growth in supply in the sector, the occupancies and average room rates in the participating providers have increased in 2017. The average occupancy level increased from 73 per cent in 2016 to 79 per cent in 2017. Average room rates meanwhile increased from €119 in 2016 to €126 in 2017. As a result, the RevPAR for serviced apartments in the Netherlands increased by 15 per cent in one year, from €87 in 2016 to €100 in 2017.
Serviced apartment providers participating in the survey almost unanimously project increased occupancies and average room rates in 2018, resulting in a projected record high for the Revenue Per Available Room. On average, the RevPAR is projected to increase by another six per cent in 2018.
In 2017, approximately 60 per cent of all serviced apartments guests were business related, while 40 per cent were leisure guests. In Amsterdam, the market share of leisure guests is larger than in the other cities in the Netherlands.
Traditionally, serviced apartments in the Netherlands were primarily aimed at corporate or government staff and management staying for a number of months, during temporary or new assignments. Private guests would also use serviced apartments following a disaster or divorce, or during remodelling.
Recently, serviced apartments have moved closer to the hotel market and will allow for shorter stays of one to five nights, as well as longer stays. As a result, the apartments are also aimed at the tourism markets and are directly competing with hotels.
In 2017, 24 per cent of the serviced apartments market consisted of stays of less than three nights, while 20 per cent of guests stayed three to seven nights. The largest segment of guests, 35 per cent, stayed between seven and thirty nights. Still, almost 45% of guests has a stay of less than seven nights. Only 20 per cent of guests stay more than thirty nights, and only 1% has a length of stay of more than 180 nights. In Amsterdam, the average length of stay is notably longer, with over 46 per cent staying seven to thirty nights and only 35% staying less than seven nights. In other cities, over 54 per cent of guests stay less than seven nights.
The Dutch branded serviced apartment market is made up of 27 main providers offering a total of more than 3,500 serviced apartments. With more than 1,900 serviced apartments (16 providers), Amsterdam Metropolitan Area is responsible for 56 per cent of the total supply. Over the last three years, at least 17 new accommodations were opened in The Netherlands, offering a total of more than 2,000 apartments.
Recently opened serviced apartment providers include local independent companies (such as Yays, Cityden Up, Zoku and Hotel2Stay), hotel operated brands (such as Amrâth Apart-Hotel, Premier Suites Plus and Element) and international serviced apartments providers such as B-aparthotel and Eric Vökel.
The rapid expansion of the market for branded serviced apartments is expected to continue in the coming years. At least 12 new developments are planned, with a total of at least 1,100 new apartments by 2020.
On January 24th, Horwath HTL Netherlands director Ewout Hoogendoorn is hosting a panel on investment in the sector at Serviced Apartment Summit Europe: Recharge2018 at Zoku Amsterdam.</p
