#servaptsummit – Speaking at this month’s first-event Serviced Apartment Summit, HVS director Arlett Oechmichen and hospitality sector analyist said that growth in the European serviced apartment sector provided further strong evidence of continued growth in demand for the European serviced apartment sector’s products, despite the economic downturn.

The global economic crisis has “significantly changed the way we travel” as corporate travel budgets have shrunk, with value, simplicity and affordability the dominant factors in choosing business accommodation on the contintent. This is creating opportunities, although barriers to entry are still high for the sector in Europe, said Arlett Oechmichen.

The serviced apartment sector in Europe has benefited from the economic crisis, with business travellers switching to the serviced apartment sector at the expense of hotels, observed Arlett Oechmichen through HVS’s data. However, while its attractiveness to both investors and guests is evident from the ongoing demand, the sector’s potential is harder to tap than in more mature markets, like the US and Asia.

One of the first considerations is that the serviced accommodation concept is “relatively new in Europe”, making it hard for developers and franchises to expand through financial and franchise agreements.

“Distance also plays a key role in the slower growth of the serviced apartment market,” says Arlett Oechmichen. In Europe, it is relatively easy compared to the US to travel between business hubs and flight times and distances are short, say from London to Berlin, and can be achieved in one day or with mnimal overnight stays.

“Planning and zoning issues are another major hurdle for the extended stay market:, with some cities imposing minimum length of stay regulations on serviced apartments so they do not compete with hotels.”

A lack of understanding both from investors and financiers and guests’ confusion over product and service level and inconsistencies within the sector are also creating “profound challenges” that the passionate and informed debate during the day at the summit surely will go some way to resolve.

For Arlett Oechmichen, from HVS’s analysis, branding will play an ever more important role in the European market, creating an “exciting future” for the sector. Read more of Re:locate magazine’s coverage from the Serviced Apartment Summit 2013 and in the upcoming autumn issue.

Source: Re:locate Magazine

Subject: Serviced Apartments growth in Europe