Blurred lines: How hotels can learn from the co-living sector

Paul Wells, Partner at Dexter Moren Associates appeared in Property Week this week discussing how hotels are co-opting serviced apartments while co-living takes up the slack on extended stay.

A few years ago, notes Paul, some predicted that new accommodation models, including serviced apartments, aparthotels and online platforms airbnb, would erode the market share for traditional hotels.  This has not been the case, and the latter has continued to thrive attracting near record levels of investment in the UK in 2018. Hotels are not only learning from these newer models but also, in some cases, co-opting them either as a fully integrated offer, or creating a dual-branded concept.

Co-living has historically been a longer-term option, but many providers such as The Collective are incorporating more flexible shorter term offers. In this way it could be said that while hotels are co-opting serviced apartments or aparthotels into their offer, co-living providers are servicing the extended stay market. Serviced apartments or aparthotels tend to be upscale with no budget offer currently available in the UK.  Arguably an extended stay offer in a co-living product will usually be a more economical alternative. 

It is clear that as the market for different accommodation options develops, the lines are blurring and moving between the offers. Much of this is being driven by changing consumer demand and as millennials mature we should expect it will continue to be a fluid sector.  Far from being pushed out by these alternative models, hotels are seizing the opportunity to incorporate elements into their offer and evolving into a new form but perhaps it’s the challenge from co-living that now needs to be taken notice of.

Read Paul’s full viewpoint in Property Week.