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Alternative lodging products
In decades past, travelers
constrained to a tight budget often
sought inexpensive alternatives to
the traditional hotel. In response
to this need, alternative lodging
products such as serviced
apartments, apartment rentals and
hostels emerged to serve these
budget-minded guests. However,
alternative lodging accommodations
no longer cater solely to the
cash-strapped traveler; today, they
have gained industry recognition
as an alternative preferred by
guests seeking greater flexibility,
convenience and social interaction
than is commonly found in a
traditional hotel setting.
Serviced apartments and apartment rentals
are two alternative lodging products gaining
momentum globally. Available for short- or
long-term stays, both product types provide
temporary, furnished accommodations in a
residential setting, offering guests amenities
not found at traditional hotels, such as a
fully equipped kitchen, workspace and
living room. While each option offers
comparable amenities, they have one key
differentiator: serviced apartments are
often designed for rental usage exclusively,
whereas apartment rentals are often
inhabited by the owner, who in turn offers
either a single room or the apartment in its
entirety to outside guests.
While these lodging products have been
successful in US markets with high rental
barriers to entry and significant lodging
costs, including New York City and San
Francisco, they have historically failed to
penetrate major markets in Europe, such
as London and Paris, despite these markets
sharing similar rental and lodging
characteristics. According to The Apartment
Service Worldwide, 62.9% of the world’s
656,000 service apartment units are in the
US and Canada, while 13% of current supply
is located in in Europe. 56 Despite this current
geographic imbalance, serviced apartments
and apartment rentals are gaining
traction globally as travelers continually
seek accommodations that contain basic
travel necessities, while also offering a
sense of personal space in a comfortable
atmosphere.
In addition to serviced apartments and
apartment rentals, upscale hostels have
captured the attention of travelers across
the world. Unlike the traditional hotel model,
hostels provide shared rooms ranging from
4 to 10 or more people per room, often in
a twin-sized, bunk-bed format; this layout
allows for the owner to maximize the
amount of paying guests without increasing
room inventory. In the early 20th century,
hostels emerged as a budget-friendly
alternative to the traditional hotel, offering
56. The Global Serviced Apartments Industry Report 2013/2014,
The Apartment Service Worldwide, June 2013.
Global Hospitality Insights
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