Savills analysed 26 European gateway cities, finding that serviced apartments remain significantly under‑represented relative to broader accommodation supply. Across the cities reviewed, the sub-sector accounts for 8% of existing accommodation stock, and 12% of the development pipeline indicating a rising share of future supply.

The research shows that the sector continues to demonstrate resilient operational performance across the 26 European markets analysed. In 2025, serviced apartments achieved 79% occupancy and an ADR of €136 according to CoStar. Since 2019, underlying demand has grown at a compound annual growth rate of 5.9%, compared with 1.0% across the broader hotel sector.

Thomas Emanuel, Head of Hospitality Thought Leadership EMEA at Savills, says, “This growth in demand is being driven by a combination of longer travel durations, increased flexibility in working patterns and Europe’s continued position as the world’s largest tourism region. In 2025, Europe welcomed an estimated 800 million international visitors, with forward indicators suggesting sustained mid‑single‑digit growth supported by intra‑European mobility, improving Asia‑Pacific connectivity and continued prioritisation of travel expenditure by consumers.”

Savills states that consolidation and professionalisation are also fuelling growth in the sector. Operators that were historically focused on single domestic markets are increasingly pursuing cross‑border expansion strategies across Europe, supported by institutional capital and highly replicable operating models. Savills states that this expansion highlights the fragmented nature of the sector, where many markets remain dominated by small, localised operators, creating clear scope for platform growth, consolidation and professionalisation as capital and operating expertise scale.

Savills highlights that regulatory tightening across Europe, driven by housing affordability, liveability and sustainability concerns, is structurally reshaping accommodation demand. Measures such as night caps, licensing regimes and stricter enforcement are reducing the viability of informal short term rentals (STR), particularly entire home listings in central locations. In Amsterdam, STR guest nights fell by around 44% between 2019 and 2024, with a further reduction expected as new 15 night caps take effect in central districts in 2026, while cities including Edinburgh and Paris are also implementing stricter controls. Rather than reducing travel demand, Savills research shows that these interventions are redirecting it toward compliant formats, positioning serviced apartments to benefit materially through improved occupancy and average daily rate resilience.

Richard Dawes, Director, Hotel Capital Markets, Savills, says, “The investment case for serviced apartments is no longer solely about demand growth; it is increasingly about market structure. Regulation is accelerating a shift away from informal supply, while fragmentation across Europe creates clear opportunities for scale, consolidation and professionalisation. For capital seeking resilient income with growth potential, serviced apartments are becoming a strategically important segment within European hospitality.”