The Investor's Guide to Self-Catering Apartments



The Insider @ Houst
Last updated on
February 13, 2024

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The Investor's Guide to Self-Catering Apartments

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In the dynamic serviced accommodation industry, self-catering apartments stand out by offering both the amenities of a hotel, like Wi-Fi and housekeeping, and the space and autonomy of a home, where guests can prepare their own meals. This unique mix caters to travellers seeking flexibility and a taste of local life, driving the popularity of self-catering options.

The sector is a key player in the UK's tourism economy, with hotel businesses alone generating around £21 billion in 2018. Despite challenges, the serviced apartment sector has shown resilience and growth, with 3,200 new units introduced since 2020, indicating strong market demand. For those involved in the serviced accommodation business, these apartments represent a profitable venture. Investments in this area can yield significantly higher returns compared to traditional tenancies, with a promising outlook: 3,000 new units are under construction, and by the end of 2022, the sector is expected to grow to over 27,000 units, mostly driven by independent operators.

This article sets out to explore the potential of self-catering apartments for professional landlords, property owners, realtors, and investors, offering insights into how to leverage this growing trend for high returns in the serviced accommodation market.

Table of Contents

What are Self-Catering Apartments?

Exploring Self-Catering Apartments

Self-catering apartments, a distinct category within the lodging spectrum, provide a unique blend of independence and comfort for guests. These accommodations are self-contained properties equipped with full kitchen facilities, allowing guests to prepare their own meals and manage their stays with complete autonomy. This setup differentiates self-catering apartments from traditional accommodation options like hotels, motels, and guesthouses, offering a "home away from home" experience that prioritises privacy, flexibility, and personal space.

Advantages for Owners and Guests

For property owners, self-catering apartments represent a lucrative investment opportunity, marked by several key benefits:

  • Potential for Additional Income: The demand for personalised and private travel experiences can translate into higher rental yields for self-catering properties.
  • Flexibility and Control: Owners enjoy more flexibility in managing bookings and can adapt their offering based on guest feedback and market demand, providing greater control over their investment.

Guests, on the other hand, are drawn to self-catering apartments for their unique advantages:

  • Personalised Travel Experience: These accommodations offer the freedom to live like a local, with the independence to choose meal times, menus, and daily schedules.
  • Space and Privacy: Offering more room than a standard hotel, they are especially appealing to families and larger groups, where the cost savings and shared living spaces enhance the overall travel experience.
  • Cost-Effectiveness: Self-catering apartments can be a more economical choice, particularly for longer stays or when travelling with a group, allowing guests to manage their holiday budgets more effectively.

In essence, self-catering apartments cater to a growing segment of travellers seeking more control over their accommodation choices while providing property owners with a flexible and potentially profitable investment avenue.

Investment Insights for Self-Catering Apartments

The investment landscape for self-catering apartments is increasingly compelling, underscored by robust growth within the serviced accommodation sector. Notably, serviced apartments have outpaced traditional hotel room investments, achieving a Gross Operating Profit (GOP) margin of 43% in the 12 months leading up to May 2022. The sector has not only demonstrated resilience but has also attracted unprecedented capital investment, especially in the aparthotel concept. This is largely due to many operators now boasting enviable track records of success. Looking forward, the UK's serviced apartment and apart-hotel sector is on an upward trajectory, expected to expand to over 27,000 units by the end of 2022. This growth is anticipated at an annual rate of 5.7%, with a significant portion of the new supply—over 70%—being delivered by independent operators, highlighting the vibrant expansion and the lucrative opportunities present within this niche.

The market demand for serviced accommodations in the UK, the largest in Europe, continues to surge. This growth is fuelled by evolving work, travel, and living preferences, particularly the shift towards remote work and the flexibility it brings to business travel. The preferences of younger generations, such as millennials and Gen-Z, who value flexibility, community, and convenience, further bolster this demand. These demographic shifts align perfectly with the unique offerings of self-catering apartments, which provide a personalised travel experience, more space and privacy than traditional hotel rooms, and cost-effectiveness for families and larger groups. The ability to set their own holiday timetable and budget, along with the economies of scale, make self-catering apartments an attractive proposition for a broad traveller demographic.

On the operational front, managing self-catering apartments requires a modern approach that incorporates digital solutions to enhance the guest experience. Technologies like mobile check-ins, self-service kiosks, and website chatbots not only streamline operations but also empower guests, allowing hotel staff to focus on enhancing the overall guest experience. Regular cleaning and housekeeping services are essential to maintain the property's appeal, ensuring that apartments remain clean and well-maintained throughout the guest's stay. Additionally, providing fully equipped kitchen facilities is crucial, fulfilling the self-catering promise and meeting guest expectations for an independent and flexible accommodation experience.

In summary, the sector's robust investment potential, combined with growing market demand and the operational essentials of delivering a high-quality guest experience, positions self-catering apartments as a lucrative venture for investors. With strategic management and an understanding of market dynamics, professional landlords, property owners, and realtors can leverage this opportunity to achieve significant returns in the serviced accommodation business.

Performance Insights by Location

STR Data and Market Metrics

The performance of self-catering apartments across key locations reveals significant insights into market dynamics, shaped by factors like local attractions, accessibility, and the quality of accommodations. Here's a look at the latest Short-Term Rental (STR) data, showcasing the average daily rate (ADR), occupancy, and revenue metrics in prime destinations:

A table containing short term rental performance metrics (median ADR, occupancy and revenue) for short term accommodations in the cities of Benidorm, Tenerife, Costa Adeje, Blackpool, Edinburgh, Liverpool and London.
We're compiled a list of top performing European locations and their STR performance.

Benidorm: A popular holiday destination, Benidorm's self-catering apartments see a median ADR of €98.10, with occupancy at 38% and revenue reaching €13,606.

Tenerife South: Known for its stunning beaches, Tenerife boasts a high occupancy rate of 87%, with a median ADR of €85.17 and revenue of €27,045.

Costa Adeje: This upscale resort area offers a median ADR of €131.55, with an impressive occupancy rate of 86% and revenue of €41,293.

Blackpool Central: A beloved seaside resort, Blackpool presents a median ADR of £126.09, occupancy at 52%, and revenue of £23,931.

London: The UK's capital city matches Costa Adeje’s performance with a median ADR of £131.55, an occupancy rate of 86%, and revenue of £41,293.

Paris: The City of Light shines with a median ADR of €182.75, an occupancy rate of 65%, and revenue of €43,357.

Edinburgh: Scotland's historic capital leads with the highest metrics, showcasing a median ADR of £198.01, an occupancy rate of 81%, and revenue of £58,541.

Understanding Market Dynamics

The performance of self-catering apartments is influenced by various location-specific factors:

  • Quality and Luxury Level: Higher-end accommodations typically command higher ADRs and attract discerning travellers.
  • Proximity to Attractions and Public Transport: Locations near key sights and convenient transport links often enjoy higher occupancy rates.
  • Local Culture and Neighbourhood Ambiance: The unique charm of a neighbourhood can significantly enhance guest experience and demand.
  • Availability of Amenities: Essential amenities like Wi-Fi and fully equipped kitchens are critical in driving bookings.
  • Adaptability: The ability of property managers to respond to industry changes and guest expectations can impact performance.

By analysing these STR data and market metrics, professional landlords, property owners, and realtors can gain a deeper understanding of the self-catering apartment market. This knowledge is crucial for making informed investment decisions and optimising property offerings to meet the evolving demands of travellers, ultimately maximising revenue potential in the serviced accommodation business.

Effective Marketing Strategies For Your Self-Catering Apartment

Reaching Your Ideal Guests

Successfully marketing your self-catering apartments begins with a clear understanding of your target market. Identifying the demographics of potential guests—considering factors like age, income, interests, and lifestyle—enables you to tailor your marketing efforts effectively. Here are key insights to refine your approach:

  • Understanding Your Audience: Analyse characteristics such as education level, hobbies, marital status, and occupation to pinpoint who your marketing should speak to.
  • Market Segmentation: Break down your audience into specific groups for more targeted marketing strategies. This can be based on previous purchases, allowing for personalised communication.
  • Focus Your Efforts: A well-defined target audience ensures your marketing campaigns are directed at those most likely to book your property, enhancing campaign success rates.

Utilising Digital Platforms

In today’s digital age, having a strong online presence is indispensable for attracting bookings:

  • Optimise Your Website: Your website serves as the digital front door to your properties. Ensure it's user-friendly and provides all the necessary information potential guests are searching for. The majority of holiday bookings are made online, with guests dedicating significant time to research before committing.
  • Embrace Social Media: Platforms like Facebook, Instagram, and Twitter offer invaluable channels to showcase your properties. They allow for both paid and organic promotion, enhancing brand visibility and potentially leading to direct bookings.
  • Maximise Listing Sites: To broaden your reach, list your property across multiple booking sites. Utilising a channel manager can streamline this process, synchronising rates, availability, and bookings across platforms like Airbnb, Vrbo, and
  • Leverage Self-Service Booking: Implementing an online booking system on your website or app enables guests to make reservations or cancellations effortlessly, providing convenience and encouraging direct bookings.

By strategically identifying your target audience and leveraging the power of digital platforms, you can significantly increase the visibility of your self-catering apartments and attract the ideal guests. These efforts not only boost your brand awareness but also contribute to a higher rate of direct bookings, laying the foundation for a successful marketing strategy in the competitive serviced accommodation sector.

Elevating the Guest Experience in Self-Catering Apartments

Critical Amenities and Services

To ensure guests have a memorable stay in self-catering apartments, providing essential amenities and services is key:

  • Fully Equipped Kitchen: The heart of a self-catering property, allowing guests to prepare meals ranging from simple breakfasts to elaborate dinners.
  • Comfortable Living Spaces: Dining areas with ample seating and lounge areas with conveniences like television and sometimes a fireplace enhance the 'home from home' experience.
  • Outdoor Areas: Gardens or terraces for relaxation and enjoyment of the outdoors.
  • Connectivity: Wi-Fi access is a must, though speed and reliability may vary across properties.
  • Parking: Onsite parking adds value, though availability can differ.
  • Housekeeping Essentials: Provision of bedding, linens, and basic cleaning supplies ensures comfort and convenience.

Adding Value with Local Experiences

To truly stand out and secure repeat bookings, personalisation and added value are crucial:

  • Welcome Packs: A personal touch in your welcome pack can significantly boost guest reviews.
  • Atmospheric Touches: Personalised room decorations contribute to a welcoming and valued atmosphere for guests.
  • Complimentary Services: Offering certain services for free can endear guests to your brand.
  • Proactive Communication: Asking guests about their stay and seeking feedback can greatly enhance satisfaction.
  • Lifestyle Experiences: From designer penthouses to luxury lodges, self-catering properties offer diverse experiences that hotels can't, making them lifestyle choices rather than just accommodation.

By focusing on essential amenities and injecting personal touches, self-catering apartment owners can elevate the guest experience, making their properties more than just a place to stay but a lifestyle choice. This approach not only improves guest satisfaction but also encourages repeat visits, setting the foundation for a successful serviced accommodation business.

Overcoming Sector Challenges

Addressing Operational Challenges

In the realm of self-catering apartments, operational challenges such as seasonality, a competitive market landscape, and maintaining high guest satisfaction are omnipresent. Here's how you can navigate these hurdles:

  • Increasing Business Resilience: Adopt agile and flexible operational models to enhance adaptability in the face of changing business landscapes. This approach ensures your business remains robust regardless of external pressures.
  • Risk Assessment and Scenario Planning: Proactively identify potential threats, from supply chain disruptions to regulatory changes, and prepare contingency plans to mitigate their impacts efficiently.
  • Competitive Landscape Analysis: Continuously research and evaluate your competitors. This insight is crucial for refining your business strategy, helping you stay ahead in a competitive market.
  • Guest Satisfaction: Implement regular safety checks like Portable Appliance Testing (PAT) and Carbon Monoxide Testing to ensure the safety and satisfaction of your guests, which is paramount for repeat business and positive reviews.

Regulatory Landscape

The regulatory environment for self-catering apartments, especially in the UK, demands careful consideration to ensure compliance and successful operation:

  • Health and Safety: Focus on property evaluation, physical precautions, and future-proofing your business against health and safety risks to operate responsibly.
  • Business Rates Rules: Be aware of the upcoming changes in April 2023 for business rates eligibility in England and Wales. Ensuring compliance with these new rules is essential to avoid transitioning to Council Tax payments.

By embracing flexibility, conducting thorough risk assessments, staying informed on the competitive and regulatory landscapes, and prioritising guest safety and satisfaction, professional landlords, property owners, and realtors can effectively overcome the challenges facing the self-catering apartments sector. This strategic approach not only ensures compliance with UK regulations but also positions your properties for success in a crowded and dynamic market.

Final Thoughts on Self-Catering Apartments

Self-catering apartments have emerged as a lucrative investment within the serviced accommodation sector, blending hotel amenities with the privacy and flexibility of home living. This investment avenue is gaining traction, driven by robust demand and positive growth indicators across key destinations. The sector's potential is further highlighted by STR data, which showcases promising occupancy rates, average daily rates (ADR), and revenue opportunities in prime locations like Edinburgh, Paris, and London.

For those in the serviced accommodation business, including professional landlords, property owners, and realtors, now is an opportune time to consider self-catering apartments. By addressing operational and regulatory challenges and leveraging digital marketing strategies, investors can tap into this growing market segment. Embrace the insights and data presented to make informed decisions, and explore the benefits of adding self-catering apartments to your investment portfolio, positioning yourself for success in a competitive and evolving industry.

The Insider @ Houst

The Insider @ Houst

The Insider team at Houst is dedicated to providing up-to-date and relevant information on short-term rentals. If you have hosting inquiries, please write to us at For guest inquiries, reach out at We are here to help you navigate the world of short lets and look forward to assisting you with your needs.

The Insider @ Houst

The Insider @ Houst

The Insider team at Houst is dedicated to providing up-to-date and relevant information on short-term rentals. If you have hosting inquiries, please write to us at For guest inquiries, reach out at We are here to help you navigate the world of short lets and look forward to assisting you with your needs.

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