New entrants into Europe’s serviced apartment sector are creating greater competition but also new demand.
Serviced apartments in Europe are under-represented relative to broader accommodation supply – a structural characteristic that underpins future growth potential, says Savills.
Tech-first platforms like limehome, Numa, Habyt, and Bob W, have increased the choice for developers and investors, while another new brand, B&B Home, is the brainchild of B&B Hotels, a fast‑growing group that already operates 950 economy hotels across Europe, UK, Brazil, and the US.
Sophie Donabedian, chief marketing officer, B&B Home, said: “We realised the growth potential of extended stay and decided to launch our first extended stay hotel in 2024 in Paris. Now we have eight B&B Home apart-hotels, plus another six opening by the end of 2026.”
Growing demand
The B&B Home product is midscale compared to the company’s economy hotels, but benefits from leveraging the same infrastructure. In locations where there is both a B&B Hotel and a B&B Home, demand has not been cannibalised, said Donabedian: “We increased the total revenue of the two properties.”
Underlying demand for serviced apartments has grown steadily since 2019, with a compound annual growth rate (CAGR) of 5.9%. This compares with a CAGR of 1.1% across the wider hotel sector, says Savills.
Donabedian added: “Of course, there are a lot of competitors out there, but we are leveraging the strength of our network and efficiency to grow fast.”
Demand is mainly corporate, but also leisure with B&B Homes in the mountains and at the coast, said Donabedian, appealing to leisure travellers who may have tried Airbnb and like the flexibility of staying somewhere that feels like a home, but also want the reassurance of a hotel brand. The average length of stay in a B&B Home is four nights, although this includes recurring corporates who stay three or four nights on a weekly basis.
Hybrid evolution
More competition, particularly from hybrid hospitality models, means traditional providers of long-stay accommodation have had to change their approach.
iapartment is a well-established German serviced‑apartment operator, founded in 2008 and now operating 1,300 apartments across 18 properties nationwide. The average length of stay in an iapartment used be 75 nights; it has since come down to 30 nights.
CEO Ralph Stock explained: “When we began, our guests could rent for a minimum of one month and only enter on the first day of the month and leave on the last. It was quite an easy business. But nowadays we're doing exactly the same as our competitors. We have to be able to receive every guest. You can stay in our apartments now from one night to a maximum of six months. Longer is not possible for legal reasons in Germany.”
The Ascott Limited is owned by CapitaLand, the largest lodging real estate trust in Asia Pacific. It was founded in 1984 in Singapore and in the 1990s took a 50% stake in the Europe-based Citadines serviced apartment chain. Thomas Lamson, VP development & PTS EMEA, The Ascott Limited, said that the company has around 1,000 assets (200,000 rooms) globally excluding the Americas, and is currently in the middle of a €100m project to renovate these properties.
Multiple demand segments
While the average age of a Citadines guest is 45 to 55 years old, Ascott has created new brands to target younger age groups, including lyf which is described as “an experience-driven social living solution designed for the next-generation traveller. Magnetic with bags of personality.”
Lamson said the beauty of having 14 brands globally is that each brand appeals to a core demographic and demand segment, but there is still the flexibility to achieve the best mix of leisure and corporate, short-medium-long stay, weekday and weekend stays within the same property.
“It's really getting more complex every day,” commented Stock of ipartment. His company traditionally relied on corporate guests for 90% of its demand, but the team recognised that this model won’t be sustainable forever. They recently joined Best Western to gain better access to leisure travellers and international guests, especially during periods when corporate clients are at home such as the Christmas holidays. Leisure travellers can fill these gaps, but because ipartment has always been positioned as a corporate brand, attracting leisure has been a challenge, hence the partnership with Best Western.
Flexible staff
At B&B Home and the Ascott brand lyf, employees do not have dedicated functions but are expected to multi-task. “We have very flexible and versatile staff so our people have to be able to work in different positions and that allows us to be as lean as possible,” said Donabedian.
This approach to staffing mitigates inflation and is a differentiator from the extended stay operators who do not employ any staff on site. Lamson commented: “Guests are coming for advice, for human interaction, so we’re happy to have staff.”
Stock said the digital contactless guest journey is, of course, there for those who want it but added: “Our DNA is still to have somebody on site, because we see ourselves still as really passionate hosts.”
Expansion
All three groups are in expansion mode with Ascott and B&B Home targeting franchisees.
Lamson said: “We are strongly targeting franchises. This is our key model today. However depending on the countries, especially in Germany, we have to sign leases. I’ve recently signed the lease for a lyf in Dublin because there was an opportunity.”
In March 2026, Ascott signed a long-lease agreement with real estate lender Maslow Capital for the €54.2m development of a 235-key Dublin property.
One third of B&B Homes will be franchises, said Donabedian: “We are in France and expanding in Belgium. We will primarily target European countries where we already have a B&B Hotel base so that we can benefit from that support.”
ipartment plans to double in size via management contracts or leases, whichever is appropriate and possible. Expansion outside Germany for the first time is earmarked for 2027.
Commenting on the future of the serviced apartment sector, Stock expected the blurring of accommodation categories to continue: “In the next few years, the differences between hotels and serviced apartments will slowly vanish. As I told you, our average length of stay has come down from 75 to 30 nights, and it will continue to come down.”
“Everything becomes more flexible and that's the future. It's tech, it's digitalisation but I think professional and flexible staff will help a lot to sharpen your brand and to attract the guest.”
All quotes taken from the session ‘Serviced apartments: Leveraging the rise of operated living in Europe’ at IHIF EMEA 2026 in Berlin. The panel was moderated by Alexander Trobitz, managing director, head of hotel services, BNP Paribas Real Estate.