The surge in serviced apartments has emerged notably due to the escalated costs and scarcity of hotel rooms. For businesses operating in the corporate guest-house or serviced apartment sector, growth is reported at an impressive rate of 15 to 20% annually. These insights come from Mr. Sunil Nayak, the CEO of Radha Krishna Hospitality Services (RKHS), a company that has navigated this industry for the past eight years.
Mr. Nayak emphasizes, "About five years ago, hotel costs skyrocketed, and there was a notable shortage of hotel rooms – approximately 8,000 to 10,000 room nights nationwide. This environment catalyzed the boom in our industry. Presently, we manage over a thousand rooms across India, extending our services even to leisure activities." For long-staying guests feeling confined in hotel accommodations, opting for serviced apartments proves beneficial from a financial perspective, allowing savings ranging from 30 to 50%. The enhancement in availability coupled with the opportunity for personalized service further underscores the appeal.
Entering this exclusive market is the newcomer, Signature Crest, a network of fully furnished serviced apartments, and a subsidiary of TravelOrg Holidays Pvt Ltd.
Mr. Venkatesh K, CEO of TravelOrg, states, "This industry has everything working in its favor. Conversations with any corporate client reveal the reality – for instance, one company alone has over a hundred employees traveling every single working day. We started less than two years ago and have successfully secured 128 corporate clients."
Initially targeting tier two cities such as Indore and Pune before moving into metropolitan areas like Mumbai, the demand has substantially increased. The expansion now includes leisure locations like Shimla and Mussoorie, with apartments currently available across eighteen destinations, both in India and internationally. Plans are underway to introduce ten more locations by the end of the financial year. This expansion also extends globally with Signature Crest catering to clients in the UK, USA, Middle East, and Far East regions.
Corporate arrangements are typically structured on an annual basis, with service providers managing all logistical details. Guests benefit from incentives, such as the exclusive Signature Card, offering a complimentary two-night stay at a leisure destination after twenty nights in serviced apartments.
Research indicates that a standard hotel room measuring 250 square feet can be compared to a serviced apartment that is 650 square feet, delivering cost-effective arrangements. For larger groups, a three-room suite of 750 square feet may translate to apartments as spacious as 2000 square feet.
Moreover, guests appreciate the freedom to enjoy breakfast in their nightwear or request a customized late-night meal, contrasting with the formal attire required for a hotel buffet. Mr. Nayak highlights, "Various tiers of such facilities are available, encompassing more than just luxury and indulgence. Mid-range and budget options exist that provide substantial convenience," particularly for companies with factory sites where they can construct additional quarters for junior or mid-level staff to utilize as both living and work spaces. Leasing such spaces to a service provider allows organizations to concentrate on their primary business operations.
Furthermore, controlling travel distances to workplaces can significantly reduce costs. The number of firms engaging in the serviced apartment market is on the rise, correlating with the formal organization of this sector. As several multinationals plan entry into the Indian market soon, the emphasis on branding is increasingly crucial. For example, Patman & G, a notable service provider, recently formed a partnership with Aramark, a prominent global facility management firm. This trend of strategic alliances is expected to proliferate as the serviced apartment market continues to develop.