Service Apartments the New Norm
Service Apartments have done very well and are continuing to do very well. With what is happening due to Covid-19 the model is becoming more attractive as people are looking for longer stays, more privacy and no public spaces. Investors have already started to turn to longer-stay offerings with both Blackstone and Starwood Capital buying into Extended Stay America. The Serviced apartments are an interesting category, the model is a hybrid between residential and hotels and as we see the demand for hotel stays of seven-plus nights up nearly 20% and only 9% of that being supplied by the extended-stay segment hotel investors are setting out to capture the unmet demand. Service apartments in the past were seen as very corporate and not well designed but with companies like Yay coming into the market we are seeing spaces that are well designed and well thought out. Expect the Service Apartment sector to continue to grow well after Covid-19.