Serviced living to overtake hotels?

LIVING
Tim Harrup

The rapid rise of the residential sector – now commonly known as ‘Living’ – into the mainstream of real estate market, has led to some previously niche segments also becoming mainstream. The latest emerge is the Serviced Living segment. According to the PKF Hospitality Group, headquartered in Vienna, serviced living could even become a larger investment class than its big sister, hotels. According to PKF, serviced living includes serviced apartments, aparthotels, co-living, student accommodation, branded residences, micro living, and senior & assisted living.

Michael Widmann, Global CEO of PKF hospitality group, explains: “Globalization, urbanization and digitization influence our daily lives. In the last ten years, we have seen a dramatic change in our everyday world. The advent of remote working, the development of a sharing economy and socio-demographic changes are just a few examples that will have a significant impact on our future living spaces and our lives as a whole. This leads to the common intersection of residential and hotel in the area of ‘serviced living’, and developers, investors, operators, architects and suppliers will have to follow these developments and react quickly to them.

And his colleague Christian Walter adds: “In our industry, a closer look should be taken as to where the journey is going. There are great challenges but at the same time interesting opportunities. One outcome is already certain: the future will become hybrid. We are experiencing a new era where viewing things solely as black and white is ending. There is no longer Business OR Leisure; no longer City Hotel OR Holiday Resort; no longer Hotel OR Residential; and no longer Office OR Remote Working. The boundaries blur, everything is ‘fluid’ and therefore exciting”.

He goes on to say that the biggest trend is the convergence between the residential industry on the one hand and the hospitality industry on the other. Hybrid solutions, he states, will be our future. “Many new real estate developments will one day position themselves between the classic hotel and the conventional apartment. There will hardly be any new hotels that exclusively target guests who only spend one to three nights in a destination. Likewise, there will hardly be any residential complexes that will not offer elements associated with hotels (e.g., pool and sauna, concierge at the building entrance)”.