Serviced apartments are increasingly competing with hotels in Indias main business and travel hubs. In many cities, residential buildings that began as modest long stay options for local business travellers, now offer the same facilities as a good hotel, such as a gym, a swimming pool, and all day dining, for a similar or lower nightly rate.
One of the pioneers of the serviced apartment concept in India was Brigade group in Bangalore, which came up with Brigade Homestead Serviced Residences. “Corporate clientele are still important because they ensure at least 40% of steady business flow, says Nirupa Shankar, VP Business Development & Strategy, Brigade Hospitality Services Ltd. In the recent past, medical tourism has also become important because the guests here prioritise comfort over price and they are willing to pay us a better rate than corporates, who heavily negotiate.”
Branded serviced apartments in India, however, so far remain premium long stay offerings. Fraser Suites, in New Delhi’s Mayur Vihar, for example, offers 5-Star serviced residences in 3 categories: studio apartments, 1 bedroom apartments and 2 bedroom apartments, available for INR 8000/9000 (US$150-170), INR 12000/13000 (US$224-243) and 16000 (US$300) respectively.
The target clientele for these international brands is long stay business travellers and most well known serviced apartment brands work on high occupancy models. “Corporates are the main target segment for serviced apartments, apart from Oakwood, who are also targeting shorter stays, says Amit Mookim, Partner, Strategy Services Group KPMG, India.
Beyond the brands, however, a new trend is for residential apartments near key business districts in top metro areas to be converted into serviced apartments. In Mumbai, near its suburban commercial hub, Bandra Kurla Complex (BKC), there are a number of serviced units made available through different agencies. One of these is Seven Suites Serviced apartments, which has tapped into the demand from corporate clients at nearby BKC. These agencies typically take over units and renovate them with added facilities, paying the regular rent to the landlord, and then charging a handsome premium to the day rate customer. To the landlord, we give rent which is 20% over and above the market value, says Vinay Pawar, owner of Seven Suites. Generally, getting bookings is not a problem and they come from corporate clients as well as people who are relocating to Mumbai.
The basic plumbing and electrical fit outs, wardrobes and woodwork is generally provided by the landlord, while the rest is handled by the agencies, including installing aircon units, providing microwaves and utensils in the kitchen and adding everything else necessary to make an apartment self sufficient. Agencies then get business through websites, as well as direct marketing efforts. Based on the the apartment’s location and services’ they can charge anything from Rs 2000-5000 (US$35-95) per night for a one bedroom apartment, 5-8,000 (US$ 95-150) for a two bedroom apartment with discounted rates for longer periods.
“Service is of paramount importance in these apartments, says Aslam, We assign one caretaker and a cook per apartment in a residential complex and they take care of guests meals, housekeeping, laundry etc. Customer satisfaction is most important in our business.”
In Hyderabad, serviced apartments have become popular close to the IT hubs, with names like like Sirielite and Cyber. According to a spokesman from Cyber, these apartments “are strategically located near Hi tech city, in upscale residential areas and are the preferred choices of corporates, foreigners, NRIs, leisure and MICE travellers visiting with their families. At Gurgaon, with a growing number of IT companies and MNCs setting up base, developers have also been quick to tap into this segment. “The most demand for these apartments is from MNC companies, said Sunil Dahiya, managing director of Vigneshwara Developers. But manufacturing, consulting, financial services, infrastructure and telecom companies have also created enormous demand for service apartments in recent times.”