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SERVICED APARTMENTS

PRICE SURVEY

ANNUAL UK AND IRELAND PRICE SURVEY
Benchmarking Rates
Sector Commentary

37 locations
153 operators
3000+ apartments
2006 UK and Ireland Serviced Apartment
Price Survey

We are delighted to present the 2006 Serviced Apartment Price Survey and Sector review.

Commissioned by Go Native and conducted during April and May 2006 by the independent
market and business research company, FreshMinds, this is the first UK-wide Benchmark
Price Survey for the Serviced Apartment sector.

These results will form the basis for an Annual Price Index showing changes in prices for
1 and 2 bedroom apartments across 37 locations - from Aberdeen to Plymouth and all major
points in-between.

We hope that this comprehensive analysis of London and Regional rates will assist you as
you plan your accommodation strategy and policies as well as providing you with an
introduction to the differing ways in which temporary housing can be sourced and managed.

Guy Nixon
Managing Director

CONTENTS
Page

• Defining Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

• Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

• Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

• Sector Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

• A Travel Industry Commentary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

• UK Prices - 1 Bed Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

• UK Prices - 2 Bed Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

• Pricing Trends & Sector Commentaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
What are Serviced Apartments?
For the purposes of this report and in line with industry We have specifically excluded Apart-Hotels from this
standards, Serviced Apartments are defined as being: survey on the basis that they are, as their name suggests, a
hybrid falling somewhere between a hotel and a serviced
“Fully-furnished, self-contained units where residents are apartment. Commonly, they are not fully equipped units,
provided with their own fully-equipped living, sleeping, requiring residents to utilise hotel style laundry and room
cooking, laundry and bathing facilities. Prices are fully services and therefore not comparable to Serviced
inclusive of utilities, management and at least a weekly Apartments.
cleaning, linen and towel change service. The apartments
will be part of a managed block typically with an on-site
porter/concierge service.”

What are Leased Apartments?
Leased Apartments are identical to Serviced Apartments in Given the growing popularity of this approach as a way of
terms of quality, comfort and service. They are leased to reducing costs and addressing limited supply of Serviced
order in the long term rental market and service provision Apartments in key UK business destinations, Leased
will be managed by a property management company. Apartments have been included in the 2006 Price Survey.
Leased Apartments are available on less flexible terms
than Serviced Apartments, typically for a minimum period
of 3-6 months.

Methodology
To gain an understanding of the UK market for Serviced All prices quoted are for standard four star apartments
Apartments, FreshMinds supplemented a review of (in the absence of a formal rating system we have rated
existing data, research and published reports on the apartments based on the quality of facilities and their
market with insights gleaned from conversations with location), within a mile of the stated town’s centre. Prices
industry experts. are inclusive of an assumed 10% commission rate (as is
standard throughout the industry), but exclusive of value
To ascertain the average weekly cost of 1 and 2 bed added tax. This is the basis on which clients are usually
Serviced Apartments across 37 areas throughout the UK quoted prices.
and Ireland, FreshMinds contacted an average of four
Serviced Apartment providers per area. Leased Apartment
prices quoted are an average across Go Native’s portfolio
in each area. All pricing data was collected during a three
week time frame starting April 10th 2006.
Executive Summary
SERVICED APARTMENTS

• The UK Serviced Apartment market is in its infancy - no nationwide supply chains exist,
nor is there a GDS equivalent booking system

• Apartment quality, minimum terms, amenities and inclusive services vary significantly
between Serviced Apartment operators

• A Serviced Apartment benchmark standard does not currently exist though the nascent
Association of Serviced Apartment Providers (ASAP) is developing the framework for a
nationally recognised standard

• There is a limited North - South divide. Pricing outside the Capital shows increasing
convergence

• The tourist market competes with the business community for Serviced Apartments
in key tourist destinations creating seasonal pricing spikes

• Serviced Apartments offer increasingly flexible terms with over 50% of those surveyed
offering 1 night minimum stays

• Prices of Serviced Apartments are comparable to hotel rates for short-term stays and
increasingly cost effective as the length of stay increases

LEASED APARTMENTS

• Leased Apartments are identical in terms of quality, size and amenity to Serviced
Apartments but are available for minimum periods of 3-6 months depending on location
and local market conditions

• Serviced in exactly the same way as a Serviced Apartment, Leased Apartments are an
option for corporates with a definite housing requirement of 3-6 months plus

• Leased Apartments are sourced from the long term rental market which, with continued
growth in UK-wide city centre developments, enjoys far greater supply across the UK
than Serviced Apartments

• The traditional 6 month minimum term of long term leases is being eroded as Landlords
compete to attract blue chip corporate tenants. 3 month terms are increasingly available
in a growing number of locations across the UK

• Savings of over 40% are achievable for the growing number of medium-long term
assignments for which Leased Apartments are a viable option

• Pricing of Leased Apartments outside the capital shows growing convergence

2–3
Sector Growth - what’s driving it?
Aside from sustained international and domestic economic
growth and corresponding growth in business travel over
the last 5 years, a number of other factors are also driving
the growth in demand for Serviced Apartments:

GROWTH OF PROJECT BASED ASSIGNMENTS CSR

As companies increasingly avoid permanent relocations As Corporate Social Responsibility becomes more
for reasons of cost and employee welfare, there has been important in determining corporate travel policy, Serviced
corresponding growth in short-medium term assignments and Leased Apartments are being increasingly offered as
for which Serviced and Leased Apartments are an ideal a housing option to employees on medium to long term
housing option. assignments.

OFF SHORING COST CONTROL

As consulting, technology and outsourcing companies Against average Hotel costs for the corporate sector of
continue to develop their offshore capabilities in India, £99 per night, Serviced Apartments offer average savings
Asia, South America and Eastern Europe, growing of 37% for those employees on assignments of one week
numbers of offshore personnel are entering the UK on or longer.
temporary working visas for whom Serviced and Leased
Apartments offer a cost effective housing solution.

THE PRICE AND FLEXIBILITY COMPROMISE

Hotels
FLEXIBILITY

Serviced apartments

Leased apartments

PRICE
A Travel Industry Commentary
Although Serviced Apartments have been around in the DISTRIBUTION
travel industry consciousness since the late 1980’s, the
sector has always suffered from Cinderella Syndrome. Distribution is key in 21st century business travel. Over half
Their appeal over traditional hotels has never been in of all business accommodation bookings in the UK are
doubt, yet those advantages have now been converted now handled by Travel Management Companies (TMCs)
into serious market share. and Hotel Booking Agencies (HBAs). This means that
apartments must not just be bookable on-line but via
The problem is not one of awareness. Most buyers know GDS, and be compatible with self booking tools.
what Serviced Apartments are and how they operate.
Many have quantified the benefits of apartments - CULTURE & CSR
serviced or leased - over hotels. But few have migrated
a significant proportion of their accommodation spend The old adage that ‘one size does not fit all’ was coined
away from hotels. by the business travel industry. Company culture is the
least scientific - yet most pronounced - influence on
PRICING corporate travel policy. Reducing travel and transaction
costs remain top of the procurement agenda, but there
The seemingly unstoppable spread of the procurement are other factors in the mix too.
function works in the sector’s favour. The price benefits,
confirmed by the 2006 Go Native Serviced Apartment Corporate Social Responsibility (CSR) and traveller security
Price Benchmark Survey are undeniable, especially when are now permanent fixtures on the corporate agenda, and
taken in the context of average hotel rates. Serviced and Leased Apartments can win big here. Apart-
ments answer corporates’ duty of care to their employees
Although in London the price differential between hotels far more effectively than hotels ever can. However the
and Serviced Apartments for stays up to 3 months is not buyer has to be convinced.
that great, outside the capital the gap is much wider.
So when will Serviced Apartments finally step out of the
In Manchester, a Serviced Apartment is 15% cheaper per shadows and into the mainstream of the corporate accomm-
night than the average four star hotel rate, whilst your odation market? This survey is a major step forward in
corporate hotel spend could go twice as far by leasing an demonstrating that using apartments can make expenditure
apartment in the city. If one considers that most business on long term stays and corporate re-location go much,
travellers staying away from home for long periods stay in much further. Now the other boxes need ticking too.
budget hotels, Serviced Apartments become an even
more attractive option.
Mark Harris
PRODUCT KNOWLEDGE Director, The Travel Intelligence Network

There are, however, a number of challenges facing the
sector. Improving the product knowledge of buyers,
agents and - crucially - travellers is paramount. Most
hotel chains have ensured that most interested parties
know what to expect from them, where they are located
and how to book them. The same is not yet true of
Serviced Apartments.

Most corporate hotel programmes begin life as an RFP
(Request For Proposal), compiled by a Travel Manager
or Procurement Specialist based on the number of room
nights and cost incurred by the organisation in the
preceding 12 months. For Serviced Apartments to be
included in RFP’s, buyers need to be educated that
- with some exceptions - the sector has excellent
coverage across the UK.

4–5
UK and Ireland prices 1 bed apartments
SERVICED LEASED
REGION 1-4 weeks 4-12 weeks >12 weeks >12 weeks % saving*
Aberdeen £632 £632 £632 £347 45%
Basingstoke £631 £631 £610 £327 46%
Belfast £504 £471 £442 £303 31%
Birmingham £571 £523 £499 £336 33%
Bracknell £554 £541 £522 £313 40%
Brighton £541 £499 £462 £335 28%
Bristol £611 £590 £574 £314 45%
Cambridge £705 £655 £655 £346 47%
Cardiff £488 £434 £432 £336 22%
Derby £732 £490 £480 £325 32%
Dublin £460 £407 £391 £368 6%
Edinburgh £610 £586 £586 £360 38%
Exeter £591 £537 £531 £292 45%
Gatwick and Crawley n/a n/a n/a £340 n/a
Glasgow £586 £567 £567 £328 42%
Guildford £740 £694 £641 £353 45%
Leeds £487 £418 £393 £324 18%
Liverpool £545 £491 £491 £319 35%
Manchester £636 £622 £585 £351 40%
Milton Keynes £411 £401 £401 £302 25%
Newcastle £501 £454 £454 £333 27%
Norwich £462 £418 £393 £331 16%
Oxford £598 £586 £540 £347 36%
Plymouth £259 n/a n/a £321 n/a
Reading £622 £606 £567 £369 35%
Sheffield £386 £354 £340 £326 4%
Slough £601 £590 £571 £361 37%
Southampton £646 £619 £568 £325 43%
Swindon n/a £523 £471 £315 33%
Telford n/a n/a n/a £311 n/a
Woking n/a n/a n/a £385 n/a
Averages £560 £531 £511 £334 35%

SERVICED LEASED
AREA 1-4 weeks 4-12 weeks >12 weeks >12 weeks % saving*
London Canary Wharf £878 £782 £751 £503 33%
London City £969 £878 £854 £520 39%
London North £875 £840 £728 £503 31%
London West £958 £919 £919 £583 37%
London South £829 £700 £676 £500 26%
London West End £1,320 £1,223 £1,130 £551 51%
Averages £971 £890 £843 £527 38%

*Saving is the % saving achieved by utilising a Leased Apartment in lieu of a Serviced Apartment where the
requirement is for >12 weeks.

6–7
UK and Ireland prices 2 bed apartments
SERVICED LEASED
REGION 1-4 weeks 4-12 weeks >12 weeks >12 weeks % saving*
Aberdeen £784 £768 £768 £410 47%
Basingstoke £777 £747 £717 £442 38%
Belfast £663 £613 £586 £398 32%
Birmingham £749 £698 £671 £411 39%
Bracknell £724 £697 £663 £400 40%
Brighton £686 £615 £584 £445 24%
Bristol £866 £814 £804 £450 44%
Cambridge £841 £787 £787 £467 41%
Cardiff £710 £616 £612 £410 33%
Derby £847 £605 £499 £435 13%
Dublin £544 £533 £516 £506 2%
Edinburgh £920 £883 £883 £420 52%
Exeter £633 £578 £567 £392 31%
Gatwick and Crawley £633 £619 £570 £423 26%
Glasgow £816 £793 £793 £418 47%
Guildford £910 £862 £775 £498 36%
Leeds £591 £514 £485 £429 11%
Liverpool £714 £660 £660 £397 40%
Manchester £847 £805 £772 £455 41%
Milton Keynes £576 £553 £553 £439 21%
Newcastle £649 £600 £600 £409 32%
Norwich £572 £517 £486 £405 17%
Oxford £761 £745 £686 £472 31%
Plymouth £415 n/a n/a £440 n/a
Reading £769 £761 £714 £473 34%
Sheffield £526 £471 £452 £410 9%
Slough £873 £835 £794 £514 35%
Southampton £936 £876 £813 £462 43%
Swindon n/a £638 £574 £415 28%
Telford n/a n/a n/a £429 n/a
Woking n/a n/a n/a £467 n/a
Averages £726 £686 £657 £437 33%

SERVICED LEASED
AREA 1-4 weeks 4-12 weeks >12 weeks >12 weeks % saving*
London Canary Wharf £1,064 £949 £909 £653 28%
London City £1,276 £1,177 £1,166 £687 41%
London North £1,195 £1,148 £1,052 £649 38%
London West £1,311 £1,255 £1,255 £769 39%
London South £1,100 £944 £887 £637 28%
London West End £2,134 £2,082 £1,827 £741 59%
Averages £1,347 £1,259 £1,183 £689 42%
Pricing Trends & Sector Commentaries

UK AND IRELAND 1 BEDROOM APARTMENT PRICING
£1,200

£1,000

Cost (per week)
£800

£600

£400

£200

£0

ABERDEEN

BASINGSTOKE

BELFAST

BIRMINGHAM

BRACKNELL

BRIGHTON

CAMBRIDGE

DUBLIN

EDINBURGH

GLASGOW

GUILDFORD

LIVERPOOL

MILTON KEYNES

NEWCASTLE

NORWICH

OXFORD

READING

SHEFFIELD

SLOUGH

SOUTHAMPTON

SWINDON

LONDON SOUTH

LONDON NORTH

LONDON CITY

LONDON WEST

LONDON WEST END
EXETER

MANCHESTER
BRISTOL

CARDIFF

CANARY WHARF
DERBY

LEEDS
LONDON 1 BEDROOM APARTMENT
REGIONAL 1 BEDROOM APARTMENT PRICING PRICING
£700 £1,200

£600 £1,000
Cost (per week)

Cost (per week)
£500
£800
£400
£600
£300
£400
£200

£100 £200

£0 £0
ABERDEEN
BASINGSTOKE
BELFAST
BIRMINGHAM
BRACKNELL
BRIGHTON

CAMBRIDGE

DUBLIN
EDINBURGH

GLASGOW
GUILDFORD

LIVERPOOL

MILTON KEYNES
NEWCASTLE
NORWICH
OXFORD
READING
SHEFFIELD
SLOUGH
SOUTHAMPTON
SWINDON

CANARY WHARF

LONDON CITY

LONDON NORTH

LONDON WEST

LONDON SOUTH

LONDON WEST END
EXETER

MANCHESTER
BRISTOL

CARDIFF
DERBY

SERVICED APARTMENT COMMENTARY LEEDS

LIMITED SUPPLY PRICE SPIKES IN TOURIST CENTRES

In 9 locations this survey found only 1 or 2 Serviced Prices for Serviced Apartments in locations such as Oxford,
Apartment operators and limited competition as a London and Edinburgh harden as business travellers
consequence. However, there are signs of growing supply compete with the tourist market. The result of this
in key business destinations, in particular, London, Leeds, competition is seasonal spikes in rates during periods of
Newcastle, Manchester and Reading. high tourist activity.

NO GROWTH IN OVERALL MARKET SHARE GROWING FLEXIBILITY - AT A PRICE

In London, Serviced Apartments account for less than 3.5% Achieving high occupancy levels is key to the success of
of total room supply across the Capital. Whilst supply is Serviced Apartment operators which becomes increasingly
expected to grow, any increase in overall market share is challenging as greater flexibility is offered. As 1 week plus
likely to be offset by the growth in hotel room numbers. minimum terms are being eroded, premium rates are being
charged for the shorter term stays bringing Serviced Apart-
ment pricing in line with equivalent standard hotel rates.

8–9
Serviced apartments Leased apartments
Mean Mean

UK AND IRELAND 2 BEDROOM APARTMENT PRICING
£2,000

Cost (per week)
£1,600

£1,200

£800

£400

£0

ABERDEEN

BASINGSTOKE

BELFAST

BIRMINGHAM

BRACKNELL

BRIGHTON

CAMBRIDGE

DUBLIN

EDINBURGH

GLASGOW

GUILDFORD

LIVERPOOL

MILTON KEYNES

NEWCASTLE

NORWICH

OXFORD

READING

SHEFFIELD

SLOUGH

SOUTHAMPTON

SWINDON

LONDON SOUTH

CANARY WHARF

LONDON CITY

LONDON WEST

LONDON WEST END
EXETER

MANCHESTER
BRISTOL

CARDIFF

LONDON NORTH
DERBY

LEEDS
LONDON 2 BEDROOM APARTMENT
REGIONAL 2 BEDROOM APARTMENT PRICING PRICING
£1,000 £2,000

Cost (per week)

Cost (per week)
£800 £1,600

£600 £1,200

£400 £800

£200 £400

£0 £0
ABERDEEN
BASINGSTOKE
BELFAST
BIRMINGHAM
BRACKNELL
BRIGHTON

CAMBRIDGE

DUBLIN
EDINBURGH

GLASGOW
GUILDFORD

LIVERPOOL

MILTON KEYNES
NEWCASTLE
NORWICH
OXFORD
READING
SHEFFIELD
SLOUGH
SOUTHAMPTON
SWINDON

CANARY WHARF

LONDON CITY

LONDON NORTH

LONDON WEST

LONDON SOUTH

LONDON WEST END
EXETER

MANCHESTER
BRISTOL

CARDIFF
DERBY

LEASED APARTMENT COMMENTARY LEEDS

GROWTH IN SUPPLY UNAFFECTED BY TOURIST DEMAND

Sourced as they are from the long term rental market, Since the tourist market does not look to the long term
there is rarely any tightness in supply of Leased rental market as a source of accommodation, there is no
Apartments. Apartments represent 20% of the UK property competitive effect on the pricing of Leased Apartments in
market of which a further 20% are available in the rental the key tourist destinations of Oxford, London and
market. Continued growth in the buy-to-let market and in Edinburgh.
city centre developments has added significantly to the
supply over the last 5 years. LONDON PRICING CONVERGENCE

EXTENSIVE UK COVERAGE Whilst the price of Serviced Apartments across London
varies significantly by location, there is far less variance in
Whilst the supply of Serviced Apartments is currently the cost of Leased Apartments. A maximum variance of
limited in a number of locations across the UK, Leased £454 was recorded for 1 bedroom Serviced Apartments
Apartments are available in all locations. The quality of against a variance of only £83 for Leased Apartments.
supply of rental properties does however impact the
quality of supply of Leased Apartments having the REGIONAL PRICING CONVERGENCE
greatest impact in areas of low investment.
This is mirrored in the Regions - with a difference of only £93
across 1 bedroom Leased Apartment pricing in all locations.
ABOUT GO NATIVE

Go Native is a UK wide accommodation services company Go Native has a 10 year track record of providing innovative
providing a comprehensive range of temporary and long term and cost effective temporary and long term housing solutions
housing solutions including Serviced Apartment Reservations, to national and multi-national clients throughout the UK.
Leased Apartment Procurement and Management, bespoke
Tenancy Management Services and Relocation Support Services. In 2006, Go Native won the Business Travel World award for
“Best Travel Product”.
Go Native maintains a comprehensive database of Serviced
Apartment operators throughout the UK. Go Native is a Carbon Neutral company.

ABOUT FRESHMINDS

FreshMinds is a research consultancy. The company has built a The firm’s fresh approach to research has resulted in FreshMinds’
team of Minds – a network of the sharpest analysts in Europe. Managing Director, Caroline Plumb, twice being included in
Working with FreshMinds’ research managers, they help Management Today’s list of top female achievers, the UK’s ’35
companies analyse their customers, competitors and markets. women under 35.’

Clients include leading consultancies, financial service firms and FreshMinds also provides clients direct access to their Mind pool
multinational blue chips. through their temporary and permanent recruitment services.

T: 020 7692 4508 E: info@freshminds.co.uk
W: www.freshminds.co.uk

ABOUT TRAVEL INTELLIGENCE NETWORK

Travel Intelligence Network - TIN for short - is a specialist trade PR campaigns. We help organisations develop databases
communications & business development company. Our for prospecting and qualifying leads. We also help organisations
knowledge and expertise helps organisations to communicate to create, implement and manage effective travel management
effectively with buyers, suppliers and consumers of travel, programmes.
accommodation, meetings and associated services.
Our extensive network of industry contacts enables us to
We write and publish customer magazines, newsletters and share professional knowledge & expertise, provide reliable
e-zines. We secure sponsorship for conferences, conventions recommendations, and harness industry intelligence to develop
and events; help companies to undertake research and work bespoke communications solutions that meet each client’s
closely with industry experts and writers to develop effective business objectives.

Contact: Mark Harris mark.harris@the-tin.com
Maggy Sainsbury maggy.sainsbury@the-tin.com

ABOUT ASAP

Founded in 2005 as a division of the Association of Relocation The establishment of an independent quality grading system
Professionals (ARP), the Association of Serviced Apartment for the apartments themselves is at the top of ASAP’s agenda,
Providers (ASAP) was born out of a desire amongst the major with strenuous efforts being made in 2006 to establish objective
players in the UK serviced apartment industry to see a regulatory assessment criteria with an independent and nationally
body formed to establish common standards and best practice. recognised quality assessment body. The long term goal is for
all ASAP members to have had 100% of their portfolios assessed
and graded by the end of 2009.

020 7221 2028 www.gonative.co.uk

DISCLAIMER – This price survey and market commentary has been prepared by Go Native and FreshMinds for general guidance only
and does not constitute professional advice. No representation or warranty is given as to the accuracy or completeness of the information
contained in this survey and commentary.
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