What's Happening?
Serviced apartments are emerging as a preferred choice for institutional investors in Europe, driven by regulatory changes in short-term rentals and evolving travel demand. According to Savills, the European serviced apartment sector recorded approximately
€1.2 billion in transaction volume in 2025, reflecting growing institutional interest. Serviced apartments currently account for about 8% of the total accommodation stock across 26 major European gateway cities, but they represent 12% of the development pipeline, indicating a growing share of future supply. The segment has seen a compound annual growth rate of 5.9% since 2019, compared to 1.0% for the broader hotel sector. Regulatory changes, such as night caps and licensing requirements, are reducing the availability of informal accommodation supply, redirecting demand toward regulated formats like serviced apartments.
Why It's Important?
The growth of serviced apartments highlights a broader shift in accommodation preferences and investment strategies. For hotel operators, the rise of longer-stay formats may influence product development, particularly as demand for flexibility and extended stays continues to increase. For investors, the segment offers a combination of demand growth and structural tailwinds, including regulatory changes that are reshaping the competitive landscape. The continued expansion of serviced apartments suggests that the boundary between traditional hotels and alternative accommodation is becoming increasingly blurred, with the sector likely to play a larger role in shaping accommodation supply across European markets.
