Serviced Apartments: The Forecast That Doesn't Add Up

TL;DR

• Research houses cannot agree on what the serviced apartment market is worth right now. Precedence Research, in a page updated on 10 July 2026, values it globally at USD 161.27 billion for 2026. Market Growth Reports, on 4 August 2026, values the same market at USD 37.17 billion. That is a four-fold gap on the same category in the same year.
• Operating numbers are duller and far more reliable. HVS reported on 15 July 2026 that European occupancy held at roughly 80% through 2025 while rates softened almost universally and RevPAR declined. Units fill, and they earn less per night.
• The risk in hospitality-led residential is not vacancy. It is a service promise that outlives the sale, and two groups of owners who want opposite things from the same building.

Nobody needs convincing that housing and hospitality are converging. It is already in the floor plan and the sales deck: remote concierge, housekeeping by subscription, coworking, pet care, managed short-stay programmes. What still needs scrutiny is the arithmetic behind it, and the arithmetic is where the sector has been letting itself off lightly.

The forecast everyone quotes, and why it fails a sanity check

Precedence Research, in a page updated on 10 July 2026, sizes the global serviced apartment market at USD 161.27 billion for 2026, rising to USD 464.87 billion by 2035 on a 12.51% compound rate. Market Growth Reports, in a report dated 4 August 2026, sizes the same global market at USD 37.17 billion for 2026, reaching USD 76.35 billion by 2035.

Now bring in a single country. Spherical Insights, in a report published in October 2025, put Brazil alone at USD 6.55 billion in 2024, heading to USD 19.60 billion by 2035. Hold that against the lower global estimate and Brazil would account for something close to 18% of the world market for serviced apartments. No one in the sector would defend that sentence in front of investors.

This does not mean any of the houses got their sums wrong. It means something more awkward: the category has no agreed perimeter. Each report decides on its own whether corporate extended stay in Frankfurt, an investor studio in a secondary city, a managed short-let block and a hotel-branded residence in Miami belong on the same line. They decide differently, and the market changes size by an order of magnitude.

The practical consequence is blunt. A market forecast is not a product feasibility argument. It opens a conversation. It does not close a decision. Anyone who put "a market set to triple" on slide three of a feasibility study substituted a methodological opinion for a premise.

What operators actually measure

Where the product has a long track record, there is measurement instead of projection. Savills, in the European Serviced Apartment Report published on 15 April 2026, recorded 79% occupancy across Europe in 2025 at an average daily rate of EUR 136, using CoStar data, with roughly EUR 1.2 billion transacted in the segment over the year.

Three months later, HVS published its own read of the same sector, on 15 July 2026: occupancy steady at around 80% across all markets, but average rate softening almost universally, producing an overall RevPAR decline. In operating terms, the apartment stays full and earns less per night.

The United States reads stronger, and still the strength is in occupancy rather than price. Highland Group data reported on 4 July 2026 showed extended stay widening its occupancy lead over comparable hotel classes to 12.2 percentage points, with average daily rate up just 1.6%.

Three datasets, one story. Demand for serviced living is real and resilient, but its pricing power is not guaranteed. For a developer that moves the risk somewhere unexpected. The danger is not an empty unit. It is a promised service costing more than the revenue it generates, with the gap landing on the service charge of the owner who bought the place to live in. We made a related argument about yield assumptions in short-term rental as an asset class.

Two owners, one building, opposite interests

The structural flaw in hospitality-led residential is rarely the operating model. It is the buyer mix. An investor wants revenue, turnover and a management contract that maximises nightly rate. A resident wants quiet, predictable costs and a lobby that is not a check-in desk. Both signed the same declaration.

Downtown Miami is currently showing what that looks like when it breaks. The Elser Hotel and Residences, a 646-unit building converted into a flexible short-term rental condo-hotel in 2022, has produced three lawsuits between the developer''s affiliate and the condominium association. As reported on 5 August 2026, the association sued over roughly USD 773,000 in withheld hotel management fees, while the developer''s affiliate sued over unpaid storage fees, with garage revenue of about USD 350,000 per quarter also in dispute.

This is not a scandal. It is the predictable outcome of a product sold as a financial instrument and delivered as a condominium, with governance that was designed for the sales phase rather than for year six.

Why this is a brand problem, not only an engineering one

Serviced living creates an obligation real estate never carried before: the promise keeps being audited after handover. A conventional apartment is delivered and done. A serviced apartment is delivered and begins.

There is evidence buyers pay for that continuity when a name stands behind it. The Savills Branded Residences Report for the Americas, published on 24 May 2026, found an average brand premium of 36% across the region, up from 32% the year before and above a global average holding at 33%. The premium does not come from the logo on the facade. It comes from the operating standard buyers expect that name to enforce, and expect to survive the first decade. We covered the other side of that trade in the price of a name.

For a developer without an international flag, the conclusion is not to drop the service. It is to accept that the developer itself becomes the operating brand of the building, and that its calendar no longer ends at completion.

Five questions before "serviced" goes on the brochure

• Who operates it, and for how many contracted years? If the answer is "to be defined", the service is an intention, not an attribute, and does not belong in sales material.
• What is the modelled service charge at low occupancy? A full-house model tells you nothing. The number that matters is the one from the off-season.
• Are residents and investors being sold the same promise? If so, the conflict is already under contract.
• Which parts of the promise bind the developer, and which are future decisions of the owners'' association? That boundary has to be written before launch, not after the first contested meeting.
• Can the brand withstand five years of being held to account? A name and identity built only for the sales campaign age badly once the service becomes the product.

FAQ

Are serviced apartments a good investment in 2026?

Operating data points to steady demand and eroding pricing power: HVS reported on 15 July 2026 that European occupancy held near 80% while RevPAR declined. Returns depend far less on the category than on three building-specific variables: who operates, what the fixed cost of the service is, and what the service charge looks like at low occupancy. A sector growth forecast does not replace that calculation.

Why do serviced apartment market forecasts vary so much?

Because the category has no consensus perimeter. For 2026, Precedence Research sizes the global market at USD 161.27 billion while Market Growth Reports puts it at USD 37.17 billion, a gap of more than four times. Whether corporate extended stay, managed short-let and hotel-branded residences are counted in changes the result by an order of magnitude. Treat forecasts as a direction signal, never as a feasibility premise.

What separates a serviced apartment from a branded residence?

Serviced apartment is the broad term for housing with an operating layer attached, from remote concierge to housekeeping. A branded residence is the narrower case where a hospitality or lifestyle brand licenses its name and operating standard, and it is where Savills measured an average 36% premium across the Americas in its report of 24 May 2026. The disagreement between research houses on market size comes largely from each grouping these differently.