WITH STEVE LOWY OF THE RESIDENCE
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HOT SEAT -
WITH STEVE LOWY OF THE RESIDENCE
Join as we put a CEO in the spotlight …
Regulation is the sector ’ s biggest threat and opportunity
Steve Lowy is CEO of student accommodation provider Anglo Educational Services ( AES ) and serviced apartment operator The Residence . He is also serving chair of the Association of Serviced Apartment Providers ( ASAP ).
How is increased regulation impacting serviced apartment operators ’ ability to pivot towards other source markets ?
Regulation is both our greatest threat and opportunity . In cities across Europe and internationally , restrictions have been initiated whereby operators cannot let residential-style apartments for certain fixed periods per calendar year . In London , that ’ s 90 days . In Dublin it ’ s 14 , and 30 in New York . Although this isn ’ t every city , it does feel like there will be some sort of restriction in most major cities in the coming years . If a city ’ s leisure market averages two nights stays , and the minimum stay is 14 days , serviced apartment operators will struggle to fill their apartments . These restrictions are obviously threats .
The opportunity , is that regulation is brought in with regards to basic health and safety standards covering fire regulations etc . This could improve standards across the board and show governments that there are plenty of excellent , and safe operators in this sector .
What has ASAP done about this ?
The sector has operated under the radar for decades but not anymore , because governments have seen the impact of Airbnb on the housing crisis and serviced apartments have been swept up into the new regulatory reality .
We produced an in-depth report that sizes our industry6 to stop government making uninformed decisions that could devastate an industry worth £ 1.7 billion to the UK economy ; especially when our economy hasn ' t grown significantly in the last 10-12 years . 7
Airbnb has normalised staying in temporary accommodation . The challenge now , for smaller serviced apartment operators , is to professionalise themselves to distinguish themselves from operators who don ’ t have health and safety documents or fire alarm systems .
What ’ s the future look like ?
Credit : Domus Stay
If the UK government makes the serviced apartment sector totally inflexible , they will kill off a thriving sector . If the proposed new C5 use classification for future short-term lettings of under 90 days will be allowed , subject to operators getting planning permission , then there could be greater flexibility . 8 That will enable professional operators to get on with business without having to worry about a knock on the door .
However , in reality , with the election pending , there remains a lot of uncertainty and the consultations that took place in 2023 have yet to be taken to a stage whereby the findings are presented .
6 ASAP Independent Review of the Role and Value of Serviced Apartments in the UK https :// theasap . org . uk / independent-review /
7 https :// www . globaldata . com / data-insights / macroeconomic / real-gdp-growth-of-the-united-kingdom /#:~: text = UK ' s % 20economy % 20 grew % 20at % 20a , 1.2 % 25 % 20between % 202010 % 20and % 202021
8 https :// www . gov . uk / government / consultations / introduction-of-a-use-class-for-short-term-lets-and-associated-permitted-development- rights / introduction-of-a-use-class-for-short-term-lets-and-associated-permitted-development-rights