The Rise of Aparthotels

December 30, 2021 Mihaela Lica Butler

Hotel chains and OTAs that want to compete with Airbnb, Homestay, and other similar services now invest extensively in aparthotels, but they are not the only ones. Private initiatives follow suit offering apartments with hotel-like experiences: premium amenities, complimentary toiletries, in-room entertainment, facilities like pools, and fitness and spa access.

Although the COVID-19 pandemic almost crippled the hospitality industry last year, Airbnb remained profitable, generating $3.5 billion in commissions vs. $5.2 billion in 2019. The company even increased the number of active listings to 7.9 million in December 2020 from 7.7 million active listings in 2019 (Source: alltherooms.com).

Hotels and resorts around the world suffered revenue and occupancy losses in 2020. Statista reported that the global hotel industry's revenue plunged to $198.6bn in 2020, a 46% drop compared to 2019 (Source: traveldailynews.com).

It will take years for the hospitality industry to recover from the coronavirus pandemic hit, and innovation may be the only way to accelerate the process.

In this context, aparthotels make sense. Businesses usually book them for remote workers, freelance workers from all industries for business or bleasure (business and pleasure). In addition, students may use such apartments as temporary residences during probation periods or internships, while private travelers may have other purposes, like extended stays while visiting family and friends or temporary living arrangements during a change of residence.

Aparthotels - longe stays

Source: guesty.com

Growth in extended-stay and serviced-apartment accommodation is accelerating according to the GSAIR – The Global Serviced Apartments Industry Report 2020-21. There was a 24% increase in capacity over the past two years – compared to 10.5% growth in the preceding two-year period.

The GSAIR report revealed other statistics for serviced apartments and aparthotels:

  • Inventory has grown by 14.76% and locations by 17.47% since 2018/19.
  • Serviced apartment usage for assignment/ project working is increasing in 52% of corporates and relocation in 30.77% of corporates.
  • Indirect channels are now the most popular way to book serviced apartments, with 53.85% booked via a TMC, specialist agent (e.g., The Apartment Service), and online booking tool. OBT usage has risen from 19.05% of bookings in 2016/17 to 42.3%
  • On average, corporates spend up to 10% of their annual accommodation budgets on serviced apartments.

The Deloitte Micro-living apartments 2019 study puts things in perspective: the demand is here and rising, but interested parties must plan investments with care as serviced apartments are still a “niche product on the international commercial real estate market.”

Benefits of Aparthotels

  • Aparthotels offer the comfort of residential living with a hotel design. Apartments are fully furnished and have everything a resident may need for added comfort: pillows, blankets, etc.
  • Occupants of aparthotels usually book them because they enjoy a certain level of self-sufficiency. This is why aparthotels have fully-equipped and functional kitchens.
  • In aparthotels, many additional services like laundry service or shopping service are available at an extra cost.
  • Travelers book apartments for short stays or extended stays, depending on their needs. Sometimes, stays in serviced apartments can last months.
  • Businesses can reduce costs for business travelers by booking aparthotels. These are usually more affordable than hotel rooms and give occupants a more homey feeling.
  • Many aparthotels occupy central locations in tourist cities, prime locations in business districts, and near university campuses.
  • Some aparthotels offer room service and concierge.

Examples of Aparthotel Brands

Master Collections by Leonardo Hotels offers serviced apartments in Israel. The collection combines inspired design and luxury with the convenience of a home. They all have kitchens, high-speed Wi-Fi, in-room entertainment, 24/7 customer support, and top-level concierge services, among other perks.

Aparthotels Master Collections

Adagio Aparthotel is a network of aparthotels owned by AccorHotels and Pierre & Vacances. The essentials offered by each property in the network include free Wi-Fi and fully-equipped kitchens. Additional services include breakfast buffet, weekly cleaning, and pets welcome.

Adina Apartment Hotels by TFE Hotels offer serviced apartments with 24-hour reception, room service, gyms, and meeting facilities in New Zeeland, Australia, and Europe.

SMARTments business offer serviced apartments with kitchenettes equipped with a dishwasher and coffee machine, as well as cooking and serving items. In-room amenities include a modern flat-screen TV and high-speed Wi-Fi. Washing machines and dryers are shared by the occupants of the aparthotel building but are a standard extra useful for extended stays.

Forenom operates a chain of aparthotels in the Nordic regions of Europe. They have a growing network of serviced apartments and aparthotels in all major Scandinavian cities. Their serviced apartments have kitchenettes, while smaller aparthotel rooms have essentials like tables, utensils, refrigerators, microwaves, coffee makers, and electric kettles. Breakfast options are available for guests at local cafes.

Wrapping Up

The aparthotel industry will continue to grow as hotels and private investors identify new opportunities for expansion to satisfy business travelers, seasonal workers, students, interns, and even leisure travelers. In addition, extended stays are a new travel trend after the COVID-19 pandemic, and travelers understand their benefits: the comfort and self-sufficiency of a home with the added convenience of some hotel services like reception or free Wi-Fi.