What Is Serviced Accommodation? A Comprehensive Guide

The property rental market has transformed dramatically in recent years, with one particular sector experiencing remarkable growth. Serviced accommodation sits between traditional hotels and standard rental properties, offering a unique solution for both property investors and travellers seeking flexibility.

Serviced accommodation refers to fully furnished properties available for short-term or long-term stays, combining the comfort and space of a home with hotel-like amenities and services. These properties can be rented nightly, weekly, or monthly, making them attractive to business travellers, tourists, and anyone needing temporary housing. 

We’ll explore how this business model works, who uses these properties, and the legal requirements you need to know about this increasingly popular property strategy.

Defining Serviced Accommodation

Serviced accommodation represents a hybrid lodging solution that combines the comfort of home with professional hospitality services. These fully furnished properties operate as short-term rentals with enhanced amenities and guest support services that distinguish them from standard holiday lettings.

Key Features of Serviced Accommodation

Serviced accommodation provides fully furnished living spaces that guests can occupy immediately upon arrival. These properties include complete kitchen facilities, living areas, and bedroom suites with all necessary furnishings provided.

Professional housekeeping services form a cornerstone of serviced accommodation. Properties receive regular cleaning, linen changes, and maintenance throughout guest stays. This service level mirrors hotel standards whilst maintaining residential comfort.

Properties offer flexible booking periods ranging from single nights to several months. This flexibility attracts business travellers, relocated workers, and extended-stay guests who require temporary housing solutions.

Enhanced amenities distinguish serviced accommodation from basic rentals. Properties typically include:

• High-quality furnishings and decor
• Premium bedding and towels
• Welcome packages with refreshments
• Technology such as Wi-Fi and entertainment systems
• 24/7 guest support services

Serviced Accommodation Versus Traditional Rentals

Traditional long-term rentals operate under six to twelve-month tenancy agreements with fixed monthly rates. Serviced accommodation functions on nightly or weekly pricing structures that command significantly higher revenue per night.

Management intensity differs substantially between the two models. Traditional rentals require minimal ongoing involvement once tenants move in. Serviced accommodation demands continuous guest turnover management, cleaning coordination, and booking administration.

Target markets vary considerably. Traditional rentals serve local residents seeking long-term housing. Serviced accommodation caters to business travellers, tourists, contractors, and individuals requiring temporary accommodation during relocations.

Regulatory requirements create additional complexity for serviced accommodation. Properties often require commercial mortgages, specialised insurance policies, and planning permission changes. Traditional rentals typically operate under standard buy-to-let mortgage arrangements.

Comparison With Serviced Apartments

Serviced apartments represent a specific category within the broader serviced accommodation sector. These properties focus exclusively on apartment-style accommodation with hotel-standard services and professional management companies.

The terms serviced accommodation and serviced apartments are often used interchangeably, though serviced accommodation encompasses a wider property range. This includes houses, apartments, and alternative property types converted for short-term letting.

Service levels in serviced apartments typically match hotel standards with daily housekeeping, concierge services, and on-site facilities. General serviced accommodation may offer more basic service packages depending on the property type and target market.

Pricing structures for serviced apartments generally reflect their premium positioning and comprehensive service offerings. Standard serviced accommodation can operate across various price points depending on location, property quality, and service level provided.

How Serviced Accommodation Works

Serviced accommodation operates through streamlined booking systems and provides comprehensive guest services that blend hotel convenience with apartment-style living. Modern technology platforms manage everything from reservations to keyless entry systems.

Booking and Reservation Process

Most serviced accommodation providers use online booking platforms similar to hotels. Guests can search available properties by date, location, and specific requirements.

The booking process typically starts with creating an account on the provider’s website. You’ll need to sign up using your email address and create a secure password. If you forget your login details, most platforms offer a forgot password feature.

Once you log in, you can browse available properties with detailed photos and amenities lists. The booking system shows real-time availability and pricing for your selected dates.

Payment is usually required at the time of booking. Most providers accept major credit cards and some offer flexible payment options for longer stays.

Confirmation emails include important details like check-in instructions, property addresses, and contact information for the management team.

Guest Experience and Services Provided

Serviced accommodation combines the comfort of home with professional hospitality services. Properties come fully furnished with equipped kitchens, living areas, and separate bedrooms.

Standard services typically include:

• Weekly housekeeping
• Fresh towels and linens
• Complimentary Wi-Fi
• 24/7 customer support
• Utility bills included in the rate

Many providers offer additional services like grocery shopping, laundry, and concierge assistance. Business travellers often receive dedicated workspace areas and high-speed internet.

The check-in process is usually contactless. Guests receive access codes or key cards before arrival, allowing flexible arrival times without front desk requirements.

Technology Integration in Serviced Accommodation

Modern serviced accommodation relies heavily on technology to enhance guest experience and streamline operations. Property management systems handle bookings, payments, and guest communications automatically.

Smart home features commonly include:

• Keyless entry systems
• Automated temperature control
• High-speed broadband
• Smart TVs with streaming services

Mobile apps allow guests to report issues, request services, or extend their stay directly from their phones. Many providers use automated messaging systems to send check-in instructions and local area information.

Digital key systems eliminate the need for physical key exchanges. Guests receive access codes via text or email, making arrival and departure completely self-service.

Target Audiences and Typical Users

Serviced accommodation attracts two primary guest segments: holidaymakers seeking comfortable, home-like spaces for leisure trips, and business travellers requiring flexible, professional accommodation for extended stays.

Holidaymakers and Leisure Travellers

Holidaymakers represent a significant portion of serviced accommodation guests. These travellers choose serviced apartments for longer holidays where traditional hotels become expensive and restrictive.

Families particularly value the space and amenities. A typical family can cook meals, do laundry, and enjoy separate bedrooms whilst maintaining privacy. This saves money on dining out and provides comfort for children.

Group travellers find serviced accommodation ideal for reunions or celebrations. Multiple bedrooms and communal living areas allow groups to stay together affordably. We often see this with:

• Wedding parties
• University friends’ reunions
• Extended family holidays
• Sports teams and supporters

Long-stay holidaymakers prefer the flexibility serviced accommodation offers. Those staying one week or longer appreciate having proper kitchen facilities and living spaces. This includes digital nomads, seasonal workers, and people exploring areas before relocating.

The home-like environment appeals to holidaymakers who want local experiences rather than hotel anonymity.

Business Travellers and Corporate Clients

Corporate clients form the backbone of many serviced accommodation businesses. Business travellers increasingly choose serviced apartments over hotels for extended assignments and project work.

Extended business stays drive significant demand. Employees on assignments lasting weeks or months need comfortable living spaces. Companies prefer serviced accommodation because it reduces costs compared to long-term hotel bookings.

Remote workers have emerged as a growing segment since the pandemic. Many professionals book serviced accommodation in different cities to experience new environments whilst working. This trend has created opportunities for properties targeting the work-from-anywhere market.

Corporate partnerships provide steady revenue streams. We see companies establishing agreements with serviced accommodation providers for:

• Relocating employees
• Training programmes
• Temporary project assignments
• International secondments

Business travellers value reliable Wi-Fi, workspace areas, and proximity to business districts. They also appreciate the ability to maintain routines with kitchen facilities and separate living areas for video calls.

The Business Model Behind Serviced Accommodation

Serviced accommodation operates as a hybrid between traditional buy-to-let property investment and hospitality management. The business model centres on maximising rental income through premium nightly rates whilst managing higher operational costs and guest turnover.

Revenue Streams and Occupancy

The primary revenue stream comes from nightly bookings, typically priced higher than standard rental properties. We can charge premium rates because guests receive hotel-style services with residential space and privacy.

Key revenue factors include:

• Nightly rates: Usually 2-3 times higher than equivalent monthly rental calculations
• Occupancy rates: Target 70-80% occupancy for profitable operations
• Seasonal pricing: Dynamic pricing during peak periods and events
• Corporate contracts: Long-term business traveller agreements provide steady income

Revenue varies significantly by location and season. City centre properties near business districts often achieve consistent bookings. University towns see peak demand during term times and graduation periods.

We must factor in higher void periods between guests. Unlike traditional tenancies with 12-month agreements, serviced accommodation relies on continuous rebooking. This creates income volatility that requires careful cash flow management.

Typical monthly expenses include:

• Cleaning and laundry services
• Utility bills and council tax
• Platform commission fees (10-15%)
• Restocking supplies and maintenance

Property Management Considerations

Running serviced accommodation essentially means operating a micro-hotel business. This requires active management rather than passive property ownership.

Daily operational tasks involve:

• Guest communication and check-ins
• Booking platform management across multiple sites
• Coordinating cleaning between guests
• Restocking essentials like toiletries and kitchen supplies

We need professional cleaning services for quick turnarounds between bookings. Properties require higher maintenance standards than traditional rentals. Guests expect hotel-quality presentation and immediate response to issues.

Management options include:

• Self-management: Direct control but time-intensive
• Property management companies: Professional service for 15-25% commission
• Hybrid approach: Outsource cleaning whilst handling bookings directly

Technology plays a crucial role. Keyless entry systems, booking management software, and automated messaging help streamline operations. Many pt members use property management platforms to coordinate multiple properties efficiently.

Insurance requirements differ from standard buy-to-let policies. We need commercial insurance covering short-term letting and public liability for guest injuries.

Benefits and Drawbacks of Serviced Accommodation

Serviced accommodation offers distinct advantages for both property owners and guests, though it comes with notable challenges. Property owners can achieve higher rental yields but face increased management demands, whilst guests enjoy flexibility at potentially higher costs.

Advantages for Property Owners

Higher rental yields represent the primary benefit for property owners. Serviced accommodation typically generates 30% more income than traditional long-term rentals in major cities.

Property owners gain flexibility over their investment. We can block out dates for personal use or seasonal availability. This control allows owners to use properties when needed whilst maximising rental income.

Market demand continues growing steadily. The UK’s serviced accommodation sector expanded by 12% in 2023. Cities like London, Edinburgh, and Manchester lead this growth.

Reduced wear and tear occurs with short-term guests. Visitors typically spend less time indoors compared to long-term tenants. Most guests are tourists or business travellers who use properties minimally.

The sector contributed £3.2 billion to the UK economy in 2022. This economic impact supports over 150,000 jobs across the country.

Benefits for Guests

Hotel-like amenities at competitive prices attract many guests. Properties include fully equipped kitchens, Wi-Fi, and cleaning services. These facilities provide more comfort than standard hotel rooms.

Cost-effectiveness becomes apparent for longer stays. Extended visits often cost less than equivalent hotel accommodation, particularly in expensive cities.

Space and privacy exceed typical hotel offerings. Guests receive entire apartments or houses rather than single rooms. This extra space suits families and business groups.

Location flexibility provides more accommodation options. Properties exist in residential areas where hotels might not operate. This variety gives guests access to authentic local experiences.

Self-catering facilities allow guests to prepare their own meals. Kitchen access reduces dining costs and accommodates dietary requirements. This independence particularly benefits longer-term visitors.

Potential Challenges and Pitfalls

Increased management demands create significant workload. Regular guest turnover requires constant cleaning, maintenance, and communication. Without property management services, this becomes a full-time commitment.

Seasonal income fluctuations affect cash flow predictability. Summer months bring high occupancy whilst off-seasons may see extended vacant periods. Property owners must prepare for these income gaps.

Regulatory pressures continue increasing across the UK. London limits short-term lets to 90 days annually without special permission. Edinburgh requires mandatory licensing for all operators.

Higher costs can affect guest satisfaction. Short-term stays often cost more than traditional rentals or budget accommodations. Prime locations command premium rates that may exceed guest budgets.

Licensing requirements add complexity and expense. Scotland implemented mandatory licensing with strict health and safety rules. The UK government considers further registration schemes for tracking short-term lets.

Community concerns create additional regulatory risks. Approximately 6.8% of central London homes now operate as short-term lets. This concentration reduces long-term rental availability and creates housing pressure.

Key Legal and Regulatory Considerations

Running serviced accommodation involves navigating complex planning rules and meeting strict safety standards. These requirements vary by location and can significantly impact your business operations.

Planning and Use Classes

Serviced accommodation must operate under the correct planning permission category. The classification depends on the length of stays and services you provide.

C1 Use Class applies to hotels and short-term accommodation. Properties under C1 typically host guests for stays under 90 days. This classification requires proper planning permission from your local council.

C3 Use Class covers residential dwellings. Some serviced accommodation operates under C3, particularly for longer stays. However, frequent short-term lets may trigger enforcement action.

Local authorities can deem frequent short stays a material change of use. This happens when C3 properties operate more like hotels. You’ll need planning permission to change from C3 to C1 legally.

The 90-day rule limits short-term lets in London. Properties can only operate as short-term accommodation for 90 days per year without special permission. Other cities are introducing similar restrictions.

Always check with your local planning authority before starting operations. Planning violations can result in enforcement notices and fines.

Compliance and Safety Requirements

Serviced accommodation must meet specific health and safety standards. These requirements protect guests and ensure legal compliance.

Fire safety measures are essential for all serviced accommodation. You need proper fire alarms, escape routes, and emergency lighting. Regular fire risk assessments are mandatory.

Gas safety certificates must be renewed annually by qualified engineers. Electrical systems require testing every five years. These certificates are legal requirements, not optional extras.

Licensing requirements vary by location. Many councils require specific licences for short-term accommodation. Some areas have mandatory registration schemes for serviced accommodation operators.

Insurance coverage must reflect your commercial use. Standard home insurance won’t cover serviced accommodation activities. You need appropriate commercial or short-let insurance policies.

Regular safety inspections help maintain compliance. Keep detailed records of all certificates, inspections, and maintenance work. Local authorities can request these documents at any time.

Conclusion

Serviced accommodation offers higher returns than traditional buy-to-let through flexible nightly or weekly rentals at premium rates. However, success requires proper planning, insurance, permissions, and more hands-on management than standard rentals.

The strategy works best as an active business rather than a passive investment. Key benefits include higher yields, flexible booking periods, and growing demand from business and leisure travellers.

Visit JF Property Partners to learn how we can help you succeed in the serviced accommodation market.

Frequently Asked Questions

These questions address the main differences between serviced accommodation and other lodging options, plus practical considerations for starting this type of business. Understanding these distinctions helps clarify how serviced accommodation fits within the broader accommodation market.

What is the difference between serviced and non-serviced accommodation?

Serviced accommodation provides fully furnished properties with additional services like cleaning, fully equipped kitchens, and sometimes concierge support, functioning like extended-stay hotels with regular housekeeping.

Non-serviced accommodation offers basic furnished properties without extra services, where guests handle their own cleaning and maintenance. The key difference is the level of support provided.

What type of accommodation is sometimes called serviced apartments?

Serviced apartments are fully furnished flats for short to medium-term stays, offering more space than hotel rooms with home-like amenities including separate living areas, bedrooms, and full kitchens.

The term “serviced apartments” is used interchangeably with serviced accommodation, both describing furnished properties with professional services, particularly popular with business travellers and families.

What is the difference between Airbnb and serviced accommodation?

Airbnb is a platform where individuals list properties for short-term rental with varying service levels and inconsistent quality standards across listings.

Serviced accommodation operates as a structured business model with consistent professional services, regular cleaning, and standardised amenities across all properties, maintaining higher service standards and reliable availability.

What is the difference between a hotel and a serviced apartment?

Hotels provide individual rooms with daily housekeeping and on-site amenities like restaurants and reception desks, focusing on shorter stays with full-service hospitality including room service and concierge support.

Serviced apartments offer separate living spaces with full kitchens and residential features for longer stays from several days to months, prioritising independence and home-like comfort with more space and self-catering facilities.

What are the initial steps required to establish a serviced accommodation business?

First, secure appropriate properties in suitable locations with good transport links and local amenities, ensuring you obtain proper planning permission for short-term letting use. Arrange commercial mortgage financing rather than standard buy-to-let mortgages and purchase comprehensive serviced accommodation insurance.

Set up operational systems including key management, cleaning schedules, and booking platforms, whilst furnishing properties to hotel-like standards with quality furniture, linens, and essential supplies. These foundational elements ensure a professional service from launch.

What are the cons of serviced accommodation?

This business model requires intensive management compared to traditional buy-to-let properties, needing regular cleaning, laundry services, and guest support systems. Properties require higher initial investment for quality furnishing and face increased wear and tear from frequent guest turnover.

Local authority restrictions may limit letting days to 90 per year in some areas, whilst maintaining consistent occupancy rates presents ongoing challenges. Planning permission requirements, commercial financing complications, and higher insurance costs compared to standard residential property cover add further complexity to the business model.