All About Serviced Apartments in 2020

For a rapidly growing industry like the vacation rentals industry, 2020 was a massive disruption. National lockdowns, travel bans, and closing borders were applied due to the COVID-19 spread, and the international business travels were cancelled by 98% of the Global Business Travel Association (GBTA) countries. Since social distancing was one of the critical protocols, sharing places were no longer in demand, and travellers were keener on staying in self-contained and serviced apartment units to minimise contact with other guests.

Like other vacation rental market sectors, serviced apartments were also affected by the situation. However, the rising demand for extended stays and emerging new market segments (e.g. local authorities and frontline workers in need of self-isolation) kept this market open during the pandemic. Also, it seems that the need for suburban apartments remained higher than that of cities during the pandemic.

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What Is a Serviced Apartment?

A serviced apartment (also known as an extended stay apartment and corporate housing) is a fully furnished accommodation suitable for short and long-term stays. The facilities that serviced apartments provide are almost similar to hotel apartments but with more room space. They provide private cooking amenities, sometimes with a dishwasher and washing machine; thus, they offer home convenience and privacy.

Serviced apartments are cost-effective accommodations available all around the world. They are economical for more extended stays and group/family travel by offering in-house entertainment and cooking facilities.

What to Expect From a Serviced Apartment

  • Equipped kitchen or kitchenette usually with washing machines
  • One or two separate rooms; or a specified sleeping area
  • Living room
  • Bathroom
  • In-room technologies, for example, TV and WiFi
  • Weekly housekeeping for extended stays

Serviced Apartment Overview

The serviced accommodations’ demand and supply have grown gradually yet rapidly across the world in recent years. Also, the instant improvement in the overall performance of serviced apartment operators was reported by GSAIR. Based on a survey with 700 participants in 2019, half of the serviced apartment managers claimed a 43% increase in their RevPAR (Revenue Per Available Room).

According to estimations, the global growth for serviced apartments supply has been between 3.1% and 6.4% from 2010 to 2019. This range for global demand growth has been assessed between 2.6% to 9.4%. The below figure shows the demand and supply growth for serviced apartments in some countries during the last ten years.

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Based on the GSAIR reports, the United Kingdom is one of the leading countries in increasing serviced apartment capacities. Between 2018 to 2019, the supply growth of serviced apartments in the UK has been estimated at around +6.5%, which is 4% more than the hotels’ supply growth. Currently, the UK is holding 24,637 serviced units in the country, including 11,565 in London.

In general, the number of serviced apartment units increased by 17.5% to 1,254,753 in over 160 countries from 2018 to 2020.

Serviced Apartments Market Trend in 2020

In the past year, despite the severe impact of the pandemic, the market trend was weighted towards more booking of serviced apartments for many reasons. As mentioned, avoiding unnecessary contact between guests and staff has become essential in the COVID-19 era. Therefore, serviced apartments got more popular due to providing a secure stay compared to other forms of accommodation such as hotels, B&Bs and HMOs.

The privacy provided by plenty of amenities in serviced apartments, such as equipped kitchens, decreases the dependence on room services or outdoor facilities, like restaurants. Moreover, the amount of space in a serviced apartment is approximately 30% more than that of a standard hotel room. It means that travellers don’t need to spend much time outside as long as they feel home comfort in their self-contained units.

Since the start of the pandemic, most of the demand has been for longer stays, thus serviced apartments came for more appropriate and affordable bookings. Furthermore, apartment complexes can be found easily in all cities as well as suburbs around the world. Easy accessibility and suitable locations have attracted more tourists to these accommodations.


More than half of the serviced apartment operators at the European pipeline (includes around 20,000 serviced apartments) claimed that approximately 75% of their rentals remained open during the lockdown. Also, Europe has seen a 25.84% and 35.96% growth in serviced apartment units and locations, respectively. However, the data shows that the occupancy rate decreased by 48% for the first three quarters of 2020 compared to 2019.

Data reveals that the outbreak of COVID-19 pandemic made serviced apartments more favourable than other forms of accommodation. According to STR data, UK serviced apartments witnessed 25% more occupancy than hotels over April and early May 2020. In London itself, serviced apartment occupancy in the first quarter (Q1) of 2019 was reported 21.5% lower than the same period in 2020. The RevPAR also fell by 54% until September 2020  in comparison with the same period in 2019.


Africa has come with the largest increase in the number of apartments and locations in 2020. The number of serviced apartment locations in Africa has increased by more than 45%, and it has experienced a 36% rise in the number of units.


The apartment units and locations have considerable growth in Asia, especially in China. Based on related reports, Asia has had a rise of 40% in the number of serviced apartment units and a 33% increase in sites.

USA and Canada

Staying on top of the serviced apartment market, the US and Canada reached more than 600,000 units and around 7,500 locations by the end of 2020 (50,000 apartments and 500 areas more than the previous year).


This continent recorded a slight increase in serviced apartment locations and units by 6.19% and 6.41%, respectively.

Serviced Apartment Performance in Cities vs Suburbs in 2020

A peaceful environment, fresh air, and the low renting cost all are some advantages of suburbanites. These features were the reasons that pulled travellers to such areas during COVID-19 since remote working made it easier to leave the city. From the psychological perspective, people preferred to escape the situation-raised mental pressures and spend time far from cities’ crowds.

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Following is a brief report provided by RealPage, around the US serviced apartment performances in cities and countrysides.

Occupancy Rate

Regarding travellers’ behaviour, it has been estimated that the demand for serviced apartments in the countrysides would be more than that of urban areas as a post-COVID impact. According to the RealPage report, the rise in serviced apartment occupancy rate in suburban areas has started for a while as people’s lifestyles have changed. This report shows that the transition began before the pandemic as suburban apartments have received higher occupancy than cities’ apartments since 2015. With the outbreak, serviced apartment occupancy decreased in both urban and suburban areas; however, the impacts on cities were more drastic.

Rent Growth

More robust rent growth has been witnessed in suburban areas than in cities in the US for the last seven years. The pandemic had adverse effects on both regions, but the rent growth remained positive (+0.4%) in suburbs while it decreased to -1.7% in urban areas. Besides the market recession, it also should be noted that the annual inventory growth has been higher in cities compared to suburbs, and this is another factor in keeping the rent growth lower for cities.

Vacancy Rate

In-city facilities, such as restaurants, entertainment, and workplaces’ vicinity, were no longer appealing during the pandemic. Therefore, the apartment vacancy rate in urban areas reached the highest level (6%) since 2009 in the US. The situation affected the suburban market as well, but with a less severe impact.


The data demonstrate a slight change in the demand pattern of the urban and suburban serviced apartments after nine years. But it is evidently seen that the suburban apartment market remained the largest by keeping 75% of the market shares.

Concluding Remarks

It seems that the total performance of serviced apartments in 2020 has been meaningfully affected by the pandemic across the world. But the market demand remained higher than in other sectors, such as hotels, due to serviced apartments’ convenient features and the privacy and safety they offer. Moreover, the suburban serviced apartment market stayed higher than cities by holding 75% of the share. It is clear that the COVID-19 pandemic accelerated the adoption of suburban living, but the shift toward suburban serviced apartments was already occurring.

Future travel behaviour is still unknown, but the global vaccination against COVID-19 has brought this hope that the hospitality industry will come back to its golden times and continue its growth. Meanwhile, the recovery process of the situation arisen from the pandemic won’t be fast and easy. The world may ultimately be released of the coronavirus, but the pandemic nightmare would stay with us for a while. Therefore, the dream of a sudden travel boom doesn’t seem realistic once the global pandemic is over. We assume the vacation rental trend would not accept a considerable change in the near future, which means there would be still more demand for serviced apartments, especially in suburban areas.

From another perspective, the COVID-19-driven disruption in the vacation rental business has made serviced apartments more favourable than other types of staycations. Therefore, it seems that the serviced apartment market holds a growing capacity for investment and could be more consolidated overtime regarding the instability of other hospitality sectors and also the possibility of arising new pandemics.

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