The growing popularity of alternative accommodations, such as serviced apartments and vacation rentals has been driven by travellers seeking more space and flexibility, as well as a more authentic local experience. This has proven to be a more resilient business model even during the pandemic years of and has opened up new opportunities for investors within the hospitality asset class.
Extended stay products in particular have huge potential to grow in Europe, with a successful track record in the US, Asia and Australia. Its appeal is driven by a wider customer demand base and resilience during periods of economic volatility.
Extended stay hotel products have also consistently generated higher profit margins underpinned by leaner operating models.
Resorts have also been thrust into the limelight recently, as European investors have pivoted their interest from large corporate hotels catering to mostly international corporate clients to resort locations that are easily accessible and attract a wide range of guest segments. As the leisure market in Europe continues to grow, resort hotels have shown to be a stable investment, especially post-pandemic with increased travel demands. With the majority of resorts in Europe still unbranded, there is a growing demand for investors to bring in a brand as value-add, as it makes securing funding easier.
