Serviced apartments: can the sector’s global growth be sustained?
The serviced apartment sector is expected to experience significant growth. Factors like hybrid working, a preference for home-like accommodations, and longer stays are reshaping the market, while technology and AI are improving the overall experience. Marianne Curphey examines how the sector is adapting to meet the needs of customers across various regions.
The rise of remote and flexible work models has significantly increased the demand for extended-stay accommodations. Today, traveler’s are looking for home-like comforts, such as kitchens and workspaces, in addition to traditional hotel amenities like gyms and on-site restaurants, according to Carrie Hartman, president of global corporate travel and relocation platform. She also notes a growing demand for pet-friendly accommodations.
“As companies face mounting cost pressures, employees are traveling less frequently but staying longer, making serviced apartments a more cost-effective option than traditional hotels,” she explains. “This is where ‘bleisure’—combining business trips with leisure activities—has gained significant momentum, driving demand for accommodations that offer a better work-life balance.”
The serviced apartment sector is expected to grow rapidly in the coming years, with the United States at a turning point. While historically slower than Europe, the US market is now seeing increased demand for personalized, home-like accommodations from business travelers seeking longer stays.
“The extended-stay market in the US is at a crucial juncture,” Hartman says. “The rise of digital nomads and bleisure travel is reshaping work patterns and travel behaviors, with travelers prioritizing flexibility and efficiency. As a result, serviced apartments are becoming more appealing compared to traditional lodging.”
The shift to hybrid work is benefiting some US cities, while others are seeing lower occupancy rates as employees work from home more often. “Cities like Austin, Miami, and Denver are becoming more attractive for extended stays,” Hartman adds. “Meanwhile, tier-one cities like New York are facing higher vacancy rates, with office spaces seeing 20% vacancies as companies shift towards decentralized work models, potentially long-term.” This shift is pushing companies to seek more cost-effective locations outside high-priced cities.
For the serviced apartment market, this shift indicates a longer-term trend where travelers seek comfort, work-life balance, and the convenience of remote work-friendly amenities. This includes flexible booking options, high-quality accommodations, and a seamless experience from booking to check-out. 3Sixty’s HomeMatch technology aims to meet these evolving needs by curating personalized housing options, each carefully vetted for safety and financial stability.
However, while the serviced apartment sector is adapting to rising demand, challenges around pricing, availability, and location persist. “Though many providers are enhancing their offerings, demand still outstrips supply, leading to price hikes and limited availability in prime locations,” Hartman notes. Ensuring compliance with safety and quality standards remains crucial, adding to operational costs. 3Sixty addresses these challenges through efficient sourcing and strict vetting processes, offering transparent pricing models.
