The firm notes that stock levels of the largest operators are set to increase 39.4% before the end of 2022 amounting to over 13,000 units. Accor, Staycity and SACO are the main drivers, accounting for 60% of the pipeline, driven by its new lifestyle focussed brands including Wilde (Staycity) and Locke (SACO).
The group added the UK market continues to prove “attractive” to hotel operators, accounting for a third of the European pipeline. However, a number of the larger operators are moving into new, less established markets, such as Vienna and Warsaw.
James Bradley, associate director in the hotels team at Savills, said: “The extended stay market continues at the buoyant pace set over the last year as operators look to consolidate their presence in established European markets.
“Improving operational prospects for emerging European markets, plus pricing and availability constraints in more developed markets in the UK, France and Germany, is facilitating expansion into currently under-served European cities.”
Marie Hickey, research director at Savills, added: “It is currently difficult to gain exposure to the extended stay sector through single asset and real estate only portfolio acquisitions due to the lack of purpose built stock. As such we expect momentum in the corporate M&A sphere to continue as operators seek to bolster their European coverage.”