Serviced Apartments or Extended Stay Segment Market Size, Share, Growth, and Industry Analysis, By Type (Standard Serviced Apartments, Luxury Serviced Apartments), By Application (Business Travel, Relocation and Temporary Housing, Leisure and Tourism), and Regional Forecast to 2033

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SERVICED APARTMENTS OR EXTENDED STAY SEGMENT MARKET OVERVIEW

The serviced apartments or extended stay segment market, valued at USD 100 billion in 2024, is forecasted to increase to USD 105 billion in 2025 and surpass USD 160 billion by 2033, expanding at a CAGR of 5% from 2025 to 2033.

The Serviced Apartments or Extended Stay Segment Market is an expanding sub-industry of the hospitality sector, providing flexible, value-for-money accommodation for tourists, business travelers, and relocating professionals. These establishments provide hotel-like services with the comfort of home, including housekeeping, kitchens, laundry facilities, and internet access. Serviced apartments differ from conventional hotels in that they address the needs of visitors who stay for extended periods, i.e., more than seven days, making them particularly suited for long-term business trips, medical treatment, or temporary relocation. The segment is most sought after by corporate customers who need affordable but comfortable accommodations for personnel on long-term postings.

The market has grown remarkably over the last few years as a result of increased demand for alternative accommodation as well as the growing culture of remote work and corporate travel.

COVID-19 IMPACT

Serviced Apartments or Extended Stay Segment Market Had a Negative Effect Due to Supply Chain Disruption During COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

The pandemic caused by COVID-19 affected the Serviced Apartments or Extended Stay Segment Market heavily. Lockdowns, travel restrictions, and a dramatic decline in international and domestic mobility resulted in a sharp fall in bookings and occupancy levels worldwide. Business travel, which was one of the major drivers for this segment, stopped almost completely as companies implemented remote work patterns and cancelled long-term assignments and relocation strategies. Most serviced apartment operators experienced operational difficulties because of lower revenue and higher health and safety expenses. Hygiene measures, staff shortages, and the lack of certainty surrounding the reopening dates created further pressure on the industry. Hotels that relied mainly on international visitors and expatriates were impacted the most, with long-term bookings being cancelled or put on hold indefinitely.

In addition, the market also saw diminished investor confidence and slowed growth plans. New projects and pipeline schemes were pushed back or shelved owing to fiscal problems and demand shortfall. Operators were forced to temporarily shut down properties or move to short-stay formats to survive.

LATEST TRENDS

Integration of Smart Technology to Drive Market Growth

One key trend redefining the serviced apartments and extended stay market in 2024 is the adoption of smart technology to boost guest satisfaction. Operators are increasingly using AI-based property management systems and IoT-backed amenities like digital check-in, smart appliances, and virtual concierge services to automate operations and offer customized services. This technological innovation appeals to the tastes of contemporary travelers who demand efficient and hassle-free accommodations. Innovations such as mobile check-in, automated systems, and state-of-the-art entertainment facilities not only provide increased convenience but also enhance the overall attractiveness and usability of serviced apartments.

In addition, data analytics enables the tailoring of services to a guest's personal preferences, boosting satisfaction and loyalty. For example, personalized recommendations and bespoke experiences can be provided through mobile apps to make the stay more interactive. Smart technology integration is also key in fulfilling sustainability objectives. Sustainable practices and energy-efficient systems are being installed in a bid to appeal to nature-loving tourists, a response to the increasing trend for sustainable lodgings.

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SERVICED APARTMENTS OR EXTENDED STAY SEGMENT MARKET SEGMENTATION

By Type

Based on Type, the global market can be categorized into Standard Serviced Apartments, Luxury Serviced Apartments

• Standard Serviced Apartments: Standard serviced apartments are fully equipped residential properties meant for short to medium-term rentals, often between a few days and several months. Standard serviced apartments provide limited amenities like housekeeping, kitchen area, internet connection, and laundry service. They are mainly suited for business people, holiday makers, and relocating professionals who appreciate extra space, privacy, and freedom over standard hotel room options. Standard Serviced Apartments Segment: Standard serviced apartments are sought after for being cost-effective and home-like in their ambiance, and they are ideal for both corporate and leisure stays.

• Luxury Serviced Apartments: Luxury serviced apartments provide upscale accommodations with luxurious fittings, top-of-the-line amenities, and high-end services including concierge, spa, health clubs, and gourmet restaurants. They cater to high-end travelers, executives, and expatriates looking for a mix of comfort, class, and privacy. Luxury serviced apartments tend to be located in prime city sites or affluent districts and offer a more tailored guest experience. This category commands premium pricing and focuses on quality, exclusivity, and high-level technology integration to appeal to high-end customers.

By Application

Based on application, the global market can be categorized into Business Travel, Relocation and Temporary Housing, Leisure and Tourism

• Business Travel: Catering to business travelers who need to stay for an extended period of time close to commercial centers, corporate sites, or industrial parks is one of the core uses for serviced apartments. Serviced apartments offer an atmosphere of comfort that allows professionals to stay productive even on long assignments or projects while still having home-like amenities. This option is favored by companies for relocating staff, consultants, or contractors because it saves on costs in comparison to hotels without sacrificing convenience.

• Relocation and Temporary Accommodation: Individuals and families who are relocating for work transfers, education, or personal reasons frequently take up serviced apartments for temporary accommodation. Such usage is appropriate for individuals who require flexible furnished living space without a long-term lease. The extended stay segment enables these transition phases through provision of amenities and services facilitating settling-in, e.g., housekeeping and maintenance.

• Leisure and Tourism: The leisure market consists of travelers who want extended vacations or family trips and want more spacious rooms than hotels provide. Serviced apartments enable tourists to enjoy places with more autonomy, the use of kitchen facilities, and a more customized stay. This use is particularly sought after by vacationers, retired persons, and groups who want flexible accommodation without costing too much and compromising comfort.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions. 

Driving Factors

Increasing Demand from Corporate Travel and Business Tasks to Boost the Market

There is a noticeable boost in the Serviced Apartments or Extended Stay Segment Market growth. One of the main drivers for the serviced apartments and extended stay marketplace is the growth in demand from business travelers and corporate clients. With businesses often sending staff on long-term assignments, project work, or training programs, serviced apartments provide a cost-effective and convenient alternative to hotels. These facilities offer fully equipped units, office spaces, and variable stay arrangements, which make them a perfect choice for professionals in need of a "home away from home."

Rise of Remote Work and Digital Nomadism of Pets to Expand the Market

The remote work shift globally, fueled by the COVID-19 pandemic, resulted in the rise of digital nomads and remote working professionals. This segment favors long-term stays in well-appointed living areas that enable them to live and work efficiently on the move. Serviced apartments suit this lifestyle perfectly, with long-term rentals, high-speed internet access, and peaceful surroundings. As the remote work phenomenon turns long-term, this segment is likely to see increased demand from freelancers and mobile professionals.

Restraining Factor

High Upfront Investment and Operating Expenses to Potentially Impede Market Growth

Setting up and maintaining serviced apartments involves significant capital expenditure. Costs related to furnishing, real estate acquisition or leasing, staffing, and amenities like 24/7 security, cleaning, and utilities are substantial. Additionally, operational costs remain high due to the need for ongoing maintenance and service quality. These expenses can be a barrier for new entrants and pose financial stress on existing operators during low occupancy periods.

Expansion into Emerging Economies and Tier-II Cities to Create Opportunity For The Product In The Market

Opportunity

There is an increasing potential for serviced apartment operators to grow into emerging economies and tier-II cities where demand for quality long-stay stays is on the increase. With increasing globalization, growing middle-class incomes, and more corporations establishing regional offices in lower-tier cities, the demand for low-cost extended stays is growing. Having cost-effective yet decent housing in these underpenetrated cities could offer high growth potential.

Maintaining Consistent Service Standards Across Locations Could Be a Potential Challenge For Consumers

Challenge

With brands growing in cities and countries, it becomes tough to ensure a consistent guest experience. Skills of the local workforce, quality of suppliers, and service culture may vary and influence guest satisfaction. Consistently meeting hygiene, safety, technology, and service level expectations is a challenge that needs to be met by operators to ensure brand loyalty and competitiveness for this changing market.

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SERVICED APARTMENTS OR EXTENDED STAY SEGMENT MARKET  REGIONAL INSIGHTS

• North America

The North America region has a growing United States Serviced Apartments or Extended Stay Segment Market. The United States is the biggest and most developed market for serviced apartments and extended stay hotels. Key cities such as New York, Los Angeles, Chicago, and San Francisco are dominated by business travelers, expatriates, and long-stay visitors, driving constant demand. The high density of multinational companies, regular inter-state travel, and vibrant real estate market enable the U.S. to be a center for extended stay players. These brands, including Marriott Executive Apartments, Extended Stay America, and Sonder, control the market through a lineup of mid-scale through to luxury products.

• United Kingdom

London and the UK are a leading region within the European serviced apartment market. London is an international financial and business center, and it draws international professionals, diplomats, and tourists looking for extended stay arrangements. The UK market is led by corporate moves, university students, and health professionals requiring medium- to long-term stays. Serviced apartments become more favored over hotels for being cost-effective as well as residentially comforting. Flexible work arrangements supported by government policy and the robust UK tourism industry also drive market expansion.

• United Arab Emirates

The UAE, particularly Dubai and Abu Dhabi, has become a regional player in the serviced apartments and extended stay market. The cities welcome a large number of expatriates, business travelers, medical tourists, and seasonal workers, all fueling the high demand for long-stay accommodations. Dubai’s status as a global events destination (e.g., Expo 2020) and its appeal as a luxury tourism hub also boost the need for high-end serviced apartments. Additionally, government initiatives to promote foreign investment, long-term residency visas, and digital nomad visas have further increased the appeal of extended stays.

KEY INDUSTRY PLAYERS 

Key Industry Players Shaping the Market Through Innovation and Market Expansion

The extended stay or serviced apartments market is backed by a broad number of industrial participants, every one of which contributes to the industry through property development, innovation, and customer-focused services. Common participants are typically independent operators, property management companies, hospitality groups, and real estate developers. Hospitality service providers are frequently partnering with real estate developers in developing purpose-designed structures specifically for longer-stay residents. These consist of both city residential-type complexes and individual apartment blocks with top-of-the-line facilities like housekeeping, kitchenettes, concierge, and fitness spaces. Property management companies are important by taking care of day-to-day activities, cleaning, maintenance, and hassle-free guest experiences at several places.

Hospitality groups form part of the market leaders in this space. They utilize their existing facilities, service levels, and international networks to provide extended stay hotels in prime business districts, financial centers, and tourist spots. These groups provide everything from cost-effective stays to high-end luxury options and tend to create specialized units to target long-term leases. Over the past few years, institutional investors and investment companies have also joined the segment, having realized its resilience as well as revenue generating ability, particularly in relation to short-stay hotel's highly unpredictable segment.

List of Top Serviced Apartments Or Extended Stay Segment Companies      

• The Ascott Limited (Singapore)
• Marriott International – Executive Apartments (U.S.)
• Frasers Hospitality (Singapore)
• Oakwood Worldwide (U.S.)
• Extended Stay America (U.S.)
• SACO – The Serviced Apartment Company (United Kingdom)
• Staycity Aparthotels (Ireland)
• AKA Hotels + Hotel Residences (U.S.)
• Adina Apartment Hotels (Australia)
• Cycas Hospitality (United Kingdom)

KEY INDUSTRY DEVELOPMENT

In June 2021, something big happened in the long-stay segment when several major hospitality groups and real estate investors declared strategic collaborations to grow long-stay accommodations in prime global markets. This action represented a post-pandemic realignment in direction towards long-stay rental models prompted by traveler behavior, remote work culture, and softer demand for classic short-term stays. The alliances were expected to bring hundreds of serviced apartment units to prominent business markets like New York, London, and Dubai within the next five years. This expansion strategy emphasized digitally enabled living spaces, contactless services, and flexible lease options to attract corporate clients, digital nomads, and relocating families.

REPORT COVERAGE     

The Serviced Apartments or Extended Stay Segment Market report provides an in-depth analysis of the industry's present situation and future direction. It includes comprehensive analyses of market size, growth patterns, and emerging trends that offer insights into segments including type, end-use, booking modes, and regional balances. The report emphasizes the growing need for low-cost and flexible accommodation options fueled by phenomena such as urbanization, business travel globalization, and remote work. It also discusses the incorporation of smart technologies and green practices in serviced apartments, depicting the sector's response to changing consumer trends. In addition, the report discusses competitive methodologies, market share analysis, and industry major players' profiles to provide a comprehensive understanding of the market dynamics.