Serviced Accommodation Is Growing in Europe. Should STR Property Managers Be Paying Attention?

Serviced accommodation is expanding across Europe. New brands are entering the market, established hospitality groups are growing their extended-stay portfolios, and almost 20,000 additional rooms are expected to open over the next five years.

For professional short-term rental property managers, this raises an interesting question: could serviced accommodation offer another way to use existing expertise and inventory, reach new guest segments, and reduce reliance on seasonal leisure demand?

The overlap with short-term rentals is easy to see. Guests stay in furnished apartments with kitchens and living space. Operations can be relatively lean and technology-led. Stays are generally longer than those in hotels, but considerably shorter than a conventional residential tenancy.

Yet serviced accommodation is not simply short-term rental management with longer bookings. The guests, distribution channels, commercial relationships and service expectations can be very different.

Understanding those differences is the first step towards deciding whether the sector represents a genuine diversification opportunity.

First, what is serviced accommodation?

There is no single definition used consistently across every European market. The terms serviced accommodation, serviced apartment, aparthotel and extended stay are sometimes used interchangeably, despite describing slightly different operating models.

Broadly speaking, serviced accommodation sits somewhere between a traditional short-term rental and a hotel. It offers guests the independence and facilities of an apartment, usually including a kitchen or kitchenette, alongside professional hospitality services such as housekeeping, maintenance support and guest assistance.

An aparthotel generally operates multiple units within one building and may include a reception or shared facilities. Serviced apartments can also be distributed across several buildings or locations. The differences are not always visible from the property itself.

	Short-term rental	Serviced accommodation	Hotel
Typical stay	A few nights to several weeks	Several nights to weeks or months	Primarily shorter stays
Core demand	Leisure or mixed	Corporate, relocation, project work and extended leisure	Leisure and business
Kitchen facilities	Usually	Usually	Not always
Housekeeping	Usually between stays	Periodic and during longer stays	Commonly daily
Operating model	Property management-led	Accommodation and service-led	Full-service hospitality
Food and beverage	Rare	Limited or none	Often available
Distribution	OTAs and direct bookings	Corporate channels, specialist agents, TMCs, GDS and direct	OTAs, GDS, TMCs and direct

These are broad characteristics rather than hard dividing lines. A professionally managed urban STR portfolio may already resemble a serviced accommodation operation in several important ways. But the guest might be booking it for a very different reason.

Why is the sector attracting attention?

The HVS European Serviced Apartment Sector 2026 report examines data from approximately 13,000 units across Europe.

It found that occupancy remained at around 80% during 2025. Average rates softened across most markets, however, resulting in an overall decline in revenue per available room. In the UK, London recorded modest occupancy growth but lower rates, while areas outside the capital experienced a sharper reduction in occupancy.

The immediate performance picture, therefore, is not one of uninterrupted growth. The development pipeline tells a different story.

HVS expects approximately 19,800 serviced apartment rooms to enter operation across Europe over the next five years. Germany accounts for 23% of that pipeline and the UK for 22%, with London representing 57% of anticipated UK supply.

Staycity has the largest pipeline, with around 5,000 units expected to open. Limehome follows with approximately 2,200 units across 43 properties, more than 70% of which are planned for Spain. Marriott and Hilton are also expanding their extended-stay presence in Europe.

Separate research from Savills found that underlying European serviced apartment demand grew at an average annual rate of 5.9% between 2019 and 2025, compared with 1.1% for overall hotel demand. It also points to a forecast 8.1% rise in UK corporate travel spending during 2026.

Perhaps most relevant to professional STR operators is the range of developments coming to market. The HVS pipeline includes properties with around ten apartments as well as aparthotels with more than 460 units.

This is not one fixed model reserved for international hotel groups and large institutional developments. It can take very different forms depending on the location, building and demand profile.

The real difference is the reason for the stay

A leisure guest is often choosing a destination first and a property second. The booking is driven by the holiday, event or experience they want to have. The operator is selling the location, accommodation and overall stay.

Serviced accommodation is more commonly expected to solve a practical need. That demand can come from:

• employees travelling for business
• consultants and project teams working temporarily in a location
• people relocating for work
• contractors and mobile workforces
• production crews
• guests displaced from their homes by insurance claims
• people receiving medical treatment away from home
• employees on training programmes
• families between house moves
• travellers combining business with a longer leisure stay

For the operator, diversification may not necessarily mean acquiring or onboarding more properties. It could mean bringing different sources of demand into suitable parts of the existing portfolio.

That distinction matters. A property manager may be able to test the opportunity with a limited number of appropriate units rather than repositioning the whole business.

Longer stays can change the economics

One of the most relevant findings in the HVS report concerns profitability.

HVS found that gross operating profit margins for serviced apartments were broadly comparable with or better than those achieved by hotels over the previous three years. Although room rates can be lower than those of full-service hotels, serviced accommodation generally carries fewer staffing, food and beverage and shared-facility costs.

Longer average stays can also reduce three of the largest operating expenses: marketing, cleaning and staffing. An apartment occupied by one corporate guest for 14 nights requires a very different level of operational activity from the same apartment accommodating seven separate two-night bookings.

There may be:

• fewer changeovers and cleans
• fewer check-ins and check-outs
• less guest communication
• fewer gaps between bookings
• lower acquisition costs per occupied night
• greater forward visibility of occupancy

However, longer does not automatically mean more profitable.

Operators need to compare the net value of the booking after length-of-stay discounts, agent or distribution fees, utilities, interim housekeeping, maintenance and payment terms. A lower nightly rate only works if the operational savings and occupancy benefits outweigh the revenue being given up.

The owner agreement also matters. Owners accustomed to strong peak-season leisure rates may not immediately see the value of a lower-rate extended stay, even if it delivers fewer void nights and lower operating costs across the month.

The opportunity has to work for the guest, operator and owner.

Corporate demand is not simply another OTA channel

This is where diversification becomes more complicated.

Professional STR managers are generally accustomed to generating bookings through Airbnb, Booking.com, Vrbo and their own direct-booking channels. Corporate and relocation demand may come through a very different network.

This can include travel management companies, relocation management companies, specialist serviced apartment agents, corporate housing providers, global distribution systems and negotiated relationships with employers.

The importance of these channels should not be underestimated.

Research reported by Business Travel News Europe found that corporate buyers were increasingly booking serviced apartments through travel management companies. Policy compliance had also become their most important selection factor, ahead of location and traveller safety.

That means a suitable apartment and competitive rate may not be enough. Corporate buyers may expect:

• centralised billing and compliant invoices
• agreed payment terms
• duty-of-care and traveller-safety information
• documented cancellation policies
• consistent standards across multiple units
• data protection and security assurances
• sustainability information
• negotiated company rates
• 24-hour guest support
• inventory that can be booked through an approved system

Distribution remains one of the sector’s difficulties. Traditional serviced apartment inventory is not always readily bookable through the systems used by corporate travel programmes, while hotel groups benefit from established GDS connections and existing corporate relationships.

In other words, finding the demand is only part of the challenge. The operator also has to make the inventory accessible and bookable in the way corporate clients require.

The property may look familiar. The operation can be very different.

A property manager entering serviced accommodation may need to rethink parts of the business that currently work perfectly well for leisure stays.

Pricing, for example, needs to account for different lengths of stay rather than applying one standard nightly rate. Housekeeping becomes a scheduled service during the booking, not simply a turnover task at the end of it.

Guest support may involve coordination with an employer, travel manager or relocation agent rather than only the person staying in the apartment. Payments might arrive on corporate terms rather than being collected before check-in.

Technology also needs to support the model. An operator may require:

• flexible length-of-stay pricing
• recurring or staged payments
• company profiles and negotiated rates
• corporate invoicing
• extended-stay agreements
• scheduled housekeeping
• occupant changes within one company booking
• reporting for corporate clients and property owners

The essentials inside the apartment can change too. Reliable high-speed Wi-Fi, a proper workspace, laundry facilities, sufficient storage, cooking equipment and straightforward access become fundamental rather than optional extras.

A guest staying for six weeks will notice operational weaknesses that a weekend visitor might never encounter.

Not every STR property will be suitable

A rural villa built around family holidays may perform brilliantly as a short-term rental but have very little weekday corporate or relocation demand.

An urban apartment near a business district, hospital, transport hub, infrastructure project or large employer may have considerably more potential.

Operators considering the sector should assess individual properties against several factors:

• Is there year-round business or extended-stay demand in the area?
• What organisations generate that demand?
• Is the property well connected to workplaces and transport?
• Does it provide suitable work, storage, cooking and laundry facilities?
• Can it accommodate longer stays comfortably?
• Will the owner accept a different rate and booking pattern?
• Can the operation deliver consistent service throughout the stay?

Demand cannot be created simply by relabelling an STR listing as serviced accommodation. The location and property must solve a real need.

Regulation needs to be assessed market by market

One particularly dangerous assumption is that a longer stay, corporate guest or different description automatically takes a property outside short-term rental regulation. It does not.

Planning, licensing, registration, tax, fire safety and tenancy rules vary between countries, regions and municipalities. They may depend on the use of the property, the services provided, the length and frequency of stays, the building type and how the accommodation is marketed.

Even within the UK, there is no single regulatory framework covering every nation or local authority.

In England, current government guidance confirms that local planning authorities determine whether permission is required based on the use of the property and its local impact. A national registration scheme for short-term lets is also expected, while the former Furnished Holiday Lettings tax regime was abolished in April 2025.

Across Europe, the distinctions can be even more localised.

Operators should take professional advice before changing the use, booking structure or operating model of any property. “Serviced accommodation” is a commercial description, not a regulatory escape hatch.

Diversification, not replacement

The HVS findings do not suggest that every STR property manager should become a serviced accommodation operator.

They do suggest that the sector is becoming too significant to dismiss as a niche corner of hospitality.

For some operators, the best model will remain entirely leisure-led. For others, serviced accommodation could offer a way to build a more balanced demand mix, particularly during weekdays, shoulder seasons or periods of weaker leisure demand.

It could also create new opportunities in markets shaped by major employers, infrastructure projects, universities, healthcare facilities, film production, insurance demand and employee relocation.

But success depends on more than accepting longer bookings. The operator has to understand the customer, develop the right distribution relationships, adapt operational processes and prove that the economics outperform the demand already available to that property.

Should your business explore serviced accommodation?

Before making any move, property managers should be able to answer five questions:

1. Where would the demand come from? Identify the companies, projects, hospitals, universities, relocation activity or other demand generators in the market.
2. Which properties could genuinely serve it? Assess location, access, facilities and owner flexibility at property level.
3. How would those guests find and book the accommodation? Determine whether the opportunity requires specialist agents, corporate partnerships, travel management companies or additional distribution technology.
4. Can the operation meet corporate expectations? Review invoicing, payments, safety, compliance, support, housekeeping and reporting.
5. Do the numbers work? Compare net revenue and operating costs with the leisure bookings those dates could otherwise generate.

Serviced accommodation is not necessarily the next step for every professional STR operator. But as hotels, aparthotels, extended-stay brands and professionally managed rentals move closer together, the ability to serve more than one type of guest could become increasingly valuable.

For property managers with the right inventory, local demand and operational capability, serviced accommodation may not require an entirely new business. It may represent another market for the hospitality business they have already built.