What's Happening?
Serviced apartments are increasingly becoming a preferred choice for institutional investors in Europe, as regulatory changes in short-term rentals and evolving travel demand reshape the accommodation landscape. According to new research from Savills,
the European serviced apartment sector recorded approximately €1.2 billion in transaction volume in 2025, representing about 5% of total hospitality investment. This growth is driven by a combination of demand for longer-stay formats and regulatory measures aimed at controlling short-term rentals, such as night caps and licensing requirements. These regulations are reducing the availability of informal accommodation supply in cities like Amsterdam, Edinburgh, and Paris, redirecting travel demand towards regulated formats like serviced apartments.
Why It's Important?
The rise of serviced apartments signifies a significant shift in accommodation preferences and investment strategies within the hospitality sector. For hotel operators, this trend may necessitate adjustments in product development to cater to the growing demand for flexibility and extended stays. Investors are attracted to the segment due to its potential for demand growth and the structural tailwinds provided by regulatory changes. The increasing institutional interest and the sector's expansion suggest that serviced apartments will play a larger role in shaping accommodation supply across European markets, potentially influencing global hospitality trends.
What's Next?
As the serviced apartment sector continues to expand, it is likely to undergo further consolidation and professionalization. Operators that previously focused on single markets are now expanding across borders, supported by institutional capital and scalable operating models. This trend reflects the sector's fragmented nature, where many markets are dominated by smaller, local operators, creating opportunities for platform growth and consolidation. The ongoing evolution of regulatory frameworks and shifting traveler behavior will likely continue to influence the sector's growth and its role in the broader accommodation landscape.
