Serviced accommodation is rapidly gaining popularity among travellers, business professionals, and property investors alike. Offering a unique combination of home-like comfort with the convenience of hotel services, serviced accommodation meets a diverse range of needs. This article explores everything you need to know about serviced accommodation, covering its benefits, types, differences from other forms of lodging, and what to consider when choosing or investing in such properties.

What is Serviced Accommodation?

Serviced accommodation refers to fully furnished properties available for both short and long-term stays. These accommodations provide hotel-like amenities, such as housekeeping, concierge services, and sometimes even room service, while also offering the privacy and space of a typical home. The properties can vary widely, ranging from studio apartments to multi-bedroom units, villas, or houses.

Learn everything you need to know about Serviced Accommodation with our comprehensive guide.

Types of Serviced Accommodation

The most common type of serviced accommodation is the serviced apartment, which is a fully furnished apartment complete with a kitchen, living area, and bedroom(s). These are particularly suitable for longer stays, where guests need the flexibility to cook and work from home. Aparthotels, another form of serviced accommodation, combine the features of serviced apartments with the facilities of a hotel. Guests in aparthotel can enjoy on-site amenities such as gyms, restaurants, and business centres, alongside the privacy of their personal apartments.

Corporate housing is specifically tailored for business professionals, offering apartments with workspaces and high-speed internet. These accommodations often come with flexible lease terms and are typically located in business districts or near corporate offices. Short-stay rentals, on the other hand, are geared towards tourists or travellers looking for a place to stay for a few nights or weeks. While similar to vacation rentals, they come with added services, making them more convenient for short-term stays.

Read more in our handy How to Invest in Property guide!

Key Features and Amenities

Serviced accommodation typically includes a range of features designed to ensure a comfortable and convenient stay. A fully equipped kitchen is often standard, allowing guests to prepare their meals, which can be a significant advantage over standard hotel rooms. Regular housekeeping services are usually included, with the frequency varying from daily to weekly, depending on the property. Utilities, including high-speed internet, are generally part of the package, eliminating the need for guests to manage these separately.

Laundry facilities, either in the form of washing machines within the apartment or laundry services provided by the accommodation, add to the convenience, especially for long-term stays. Entertainment options, such as flatscreen TVs, streaming services, and sometimes gaming consoles, are also typically available. Additionally, some serviced accommodations offer 24/7 concierge and support services, assisting with anything from booking transportation to making restaurant reservations.

Chart showing serviced accommodation statistics

Source: Statista

Benefits of Choosing Serviced Accommodation

One of the primary benefits of serviced accommodation is its cost-effectiveness, particularly for longer stays. It often works out cheaper than staying in a hotel, especially when considering the ability to cook meals and the all-inclusive pricing for utilities. The space and comfort offered by serviced accommodation is another significant advantage. With separate living, sleeping, and cooking areas, guests have more room to relax, work, and entertain compared to a traditional hotel room.

The flexibility of these accommodations is also a significant draw, allowing guests to come and go as they please, cook their meals, and use the space according to their needs. This makes serviced accommodation a popular choice for families, business travellers, and anyone requiring a home-like environment. Privacy is another key benefit, as serviced accommodations offer more seclusion than hotels, with less interaction with staff unless desired.

Some serviced accommodations provide a personalized experience, such as grocery delivery, pet-friendly options, or specialized cleaning services, which adds an extra layer of convenience and comfort. Learn more about this accommodation sector with the serviced accommodation statistics resource at Statista.

Who Can Benefit from Serviced Accommodation?

Business travellers often require longer stays in cities for projects or temporary assignments, making serviced accommodation an ideal solution due to its comfort and cost-effectiveness. Tourists, particularly families and groups, can also benefit from the additional space and kitchen facilities, which make their stay more enjoyable and budget-friendly. Relocating employees who need temporary accommodation while searching for a permanent home will find serviced accommodation a convenient and comfortable option. Additionally, property investors can take advantage of the growing demand for serviced accommodation, as it can offer higher yields compared to traditional long-term rentals, particularly in prime locations.

What are the Downsides of Serviced Accommodation?

While serviced accommodation offers numerous benefits, there are also some downsides to consider. Understanding these potential drawbacks can help travellers, business professionals, and investors make more informed decisions.

Higher Costs for Short Stays – Serviced accommodation can be more expensive than traditional hotels or vacation rentals for short-term stays. The added amenities, such as a fully equipped kitchen and regular housekeeping, contribute to higher rates. For brief visits, particularly those lasting only a night or two, the cost might outweigh the benefits. We have added a rental yield calculator for our readers to use.

Limited Availability in Certain Locations—Serviced accommodation may not be readily available in some areas, particularly smaller towns or rural locations. The concept is most popular in urban centres, business hubs, and tourist destinations. If you’re travelling to a less populated or less commercial area, finding serviced accommodation could be challenging, limiting your options.

Inconsistent Quality and Service Standards – The quality and level of service can vary significantly between different serviced accommodations. Unlike hotels, which often belong to chains with standardized services, serviced accommodations can range from luxury apartments with comprehensive services to more basic options with minimal amenities. This inconsistency can lead to varying experiences for guests.

Lack of On-Site Facilities Compared to Hotels – While serviced accommodation provides a more home-like environment, it may lack some of the on-site facilities and services that hotels offer, such as 24-hour room service, multiple dining options, spas, and extensive concierge services. Guests who value these conveniences might find serviced accommodation less appealing.

An example of serviced accommodation at The Property Association

Other Considerations with Serviced Accommodation

  • Who completes the Laundry service?

Although serviced accommodation includes housekeeping, the frequency of this service is often less than what you would receive in a hotel. For instance, daily housekeeping is not always standard, and some properties may only offer weekly cleaning. This can be a disadvantage for guests who prefer daily tidying.

  • Are there any adverse effects?

Serviced accommodations are often more private and secluded than hotels, which can lead to a feeling of isolation for some guests. Business travellers, in particular, who are away from home for extended periods might miss the social interactions typically available in hotel settings, such as at the bar, lounge, or communal areas.

  • What are the Lease Restrictions?

For longer stays, serviced accommodations might have lease restrictions or minimum stay requirements. This can limit flexibility, especially for guests who need to change their plans at the last minute or who are uncertain about the length of their stay. Read our tenant’s guide for more in-depth knowledge of other property facts.

  • Are there any legal concerns about serviced accommodation?

For investors, serviced accommodations can present regulatory and legal challenges, especially in jurisdictions with strict short-term rental laws. Cities with heavy tourism might impose regulations on how long properties can be rented out on a short-term basis or require specific licenses. Navigating these rules can be complex and may limit the profitability or feasibility of investing in serviced accommodations.

  • Who is in charge of Maintenance and Wear and Tear?

Since a variety of guests uses serviced accommodations for varying lengths of time, they can experience more wear and tear than a traditional rental property. This requires more frequent maintenance and upkeep, which can be costly and time-consuming for property owners.

  • What Occupancy Rates should be expected?

While serviced accommodation can be highly profitable in high-demand areas, there is also the risk of lower occupancy rates during off-peak seasons. This variability can lead to fluctuations in income, making it less stable than traditional long-term rentals. Investors need to carefully consider the location and demand patterns before committing to this type of property. We want to thank St Andrews University for their continued support.

Research & Planning

While serviced accommodation offers many advantages, such as flexibility, privacy, and home-like amenities, it also comes with some downsides. Higher costs for short stays, inconsistent quality, limited availability, and regulatory challenges are essential factors to consider. For travellers, the decision between serviced accommodation and other lodging options will depend on their specific needs and preferences. For investors, understanding these potential drawbacks is crucial for making sound investment decisions.

How Does Serviced Accommodation Differ from Other Lodging Options?

Serviced accommodation differs from hotels by offering more space, privacy, and a home-like environment. Hotels, however, provide more comprehensive services, such as room service, on-site restaurants, and daily housekeeping. While similar to vacation rentals, serviced accommodation typically includes regular cleaning, concierge services, and other amenities that are not usually found in a typical vacation rental. In contrast to traditional rentals, serviced accommodation is rented on a short-term basis and includes utilities and services, whereas traditional rentals require longer lease agreements and separate utility management. Additional Resource: Terms for Buying & Selling Property

Considerations When Choosing Serviced Accommodation

When choosing serviced accommodation, location is a crucial factor. Proximity to work, transport links, and local amenities can significantly enhance the convenience of your stay. Budget is another important consideration, as prices can vary significantly depending on the location, property type, and length of stay. It’s also essential to consider which services and amenities are most important to you, such as the frequency of housekeeping, availability of kitchen facilities, or access to a gym. The length of stay should be factored in as well since some properties may have minimum stay requirements, particularly in prime locations or during peak seasons. Finally, security is a key consideration, especially when staying in an unfamiliar city. Look for properties with security features such as 24-hour reception, secure entry, and surveillance systems.

What are the “90-Day Rules” for Serviced Accommodation in the UK?

The “90-Day Rule” is a regulation implemented by local authorities in some cities, particularly in the UK, to limit the number of days a property can be used for short-term rentals within a calendar year. This rule is especially relevant for serviced accommodation and affects both property owners and investors in the short-term rental market.

What is the 90-Day Rule?

The 90-Day Rule restricts property owners from renting out their property as short-term accommodation for more than 90 days in a calendar year without obtaining specific planning permission or a permit. In cities like London, this rule was introduced to prevent residential properties from being converted into full-time, short-term rental units, which can reduce the availability of housing for long-term residents and drive up property prices.

Under this rule, once a property has been rented out for 90 nights in a year, the owner must either stop renting it out for the rest of the year or obtain the necessary permissions to continue operating as short-term accommodation. The rule typically applies to properties listed on platforms like Airbnb, Booking.com, and other short-term rental websites.

How Does the 90-Day Rule Affect Investors?

1. Limits on Rental Income

The 90-Day Rule directly impacts property investors’ potential rental income. Since a property can only be rented out for 90 days per year without special permission, investors are limited in how much they can earn from short-term rentals. This makes it challenging to achieve high returns if the property is solely reliant on short-term letting.

2. Increased Operational Complexity

To maximize their returns within the 90-day limit, investors may need to carefully plan and manage bookings to ensure they can rent out the property during peak periods when demand and rental rates are highest. This requires a more hands-on approach and sophisticated booking management to make the most of the available rental days.

3. Requirement for Planning Permission

If investors wish to rent out their property for more than 90 days, they must apply for planning permission to change the use of the property from a residential dwelling to a short-term rental or serviced accommodation. Obtaining this permission can be a lengthy, complex process, and there is no guarantee that it will be granted. The success of the application depends on various factors, including local housing demand, the property’s location, and the local council’s stance on short-term rentals. We have a useful mortgage calculator to assist with any financial queries you may also have.

4. Potential Legal and Regulatory Risks

Operating a property as a short-term rental in violation of the 90-Day Rule can lead to penalties, fines, or even legal action from local authorities. Investors need to stay informed about local regulations and ensure compliance to avoid these risks, which could harm their investment.

Resource 1: London 90-Day Rule Research Document

Resource 2: UK Tourist Accommodation Report

5. Impact on Property Valuation

The restriction imposed by the 90-day Rule can also influence the property’s valuation. A property that cannot be used freely as a short-term rental may be less attractive to some investors, potentially lowering its market value. Conversely, properties with the necessary planning permission to operate beyond the 90-day limit may command a premium due to their greater earning potential.

6. Shift Towards Long-Term Tenancies

To mitigate the impact of the 90-day Rule, some investors might shift their focus from short-term rentals to long-term tenancies or a combination of both. This strategy can provide more stable income throughout the year but may offer lower yields compared to short-term rentals during peak periods.

The 90-day Rule for serviced accommodation significantly affects property investors by limiting the number of days a property can be rented out on a short-term basis. Investors need to carefully consider this regulation when planning their rental strategies, as it can impact potential income, operational complexity, and the overall value of the investment. To navigate this rule successfully, investors should explore options such as applying for planning permission, optimizing rental periods, or considering alternative rental models as well as serviced accommodation employment.

Marketing Your Serviced Accommodation

Effective marketing is essential to attract guests and maintain high occupancy rates. Focus on the following:

  • Online Listings: Create professional, compelling listings on platforms like Airbnb, Booking.com, and Vrbo. Use high-quality photos, detailed descriptions, and accurate information about the property and its amenities.
  • Social Media Presence: Establish a social media presence to promote your property, share guest reviews, and engage with potential guests. Platforms like Instagram and Facebook can be effective for reaching your target audience.
  • Guest Reviews: Encourage guests to leave positive reviews after their stay. High ratings and positive feedback are crucial for building trust and attracting new bookings.
  • Local Partnerships: Partner with local businesses, such as restaurants, tour operators, or transport services, to offer package deals or discounts to your guests. This can enhance the guest experience and provide additional marketing opportunities.

Investing in Serviced Accommodation

For investors, serviced accommodation can be a lucrative opportunity, especially in areas with high demand for short-term stays, such as major cities or tourist destinations. Before investing, it’s important to conduct thorough market research to understand the local demand for serviced accommodation and the competition in the area. Property management is another consideration, as you’ll need to decide whether to manage the property yourself or hire a management company.

The latter can be particularly useful for handling bookings, maintenance, and guest services. Be sure to be aware of any local regulations or zoning laws related to short-term rentals, as these can vary significantly by location. Finally, potential returns are calculated by considering factors such as occupancy rates, pricing strategies, and operating costs. High occupancy rates and premium pricing during peak seasons can significantly boost profitability.

Serviced accommodation offers a versatile and comfortable lodging option for a wide range of travellers, from business professionals to tourists. Its blend of home-like amenities and hotel services caters to the needs of modern travellers who seek flexibility, privacy, and convenience. Whether you’re a traveller looking for a temporary home or an investor considering this market, understanding the ins and outs of serviced accommodation will help you make informed decisions and maximize the benefits of this unique lodging option.