Business travel boom adds room to serviced apartments

NEW DELHI: The surge in corporate travel has created new segments in the Indian hospitality industry ��� Business hotels, budget business hotels, designer business hotels and the likes. The latest to join the bandwagon are serviced apartments. Simply put, a serviced apartment offers the comfort of a hotel as well as the privacy of a residential apartment. It���s ideal for business travellers who stay for longer periods and are looking at alternatives to the more expensive hotels.

According to hospitality consultancy HVS International, the size of the extended-stay market (typically for more than 15 days) in India is around 8-12%. The serviced apartments are targeted at these extended-stay business travellers or employees who might be relocating. The industry, highly unorganised right now, and in its nascent stages is set to witness action with global players like Oakwood and Singapore based Ascott moving in.

The Taj Group of Hotels, Marriott International and Hyatt are some of the branded players offering serviced apartments in India for a minimum stay of 15 days. That apart, there are many small players offering fully furnished service apartments to long stay business executives. According to industry estimates, the demand for serviced apartments is around 22,77,600 room nights per year.

���The strong demand for serviced apartments will see entry of global players while Indian players will extend their operations and the industry overall become more organised,��� says Siddharth Thaker, associate director, HVS International. Oakwood, the largest provider of serviced apartments globally, will be entering the Indian market in the first quarter of 2007 with its serviced apartments in Bangalore.

The company will also be launching its properties in Hyderabad and New Delhi. On the other hand, the Singapore-based Ascott group also has plans of entering the Indian market. In the first phase, it will build 1,000 apartments across seven properties by 2010 at an outlay of Rs 1,000 crore.

Fully furnished with a home-like feel and equipped with facilities like internet count among the USPs of service apartments. These apartments are raking in the moolah too: a one-bedroom serviced apartment at the Lakeside Chalet Marriott Executive Apartments (Marriott���s serviced apartment property) in Mumbai costs $190 to $ 250 per night (remember, a hotel room could cost double).

���Corporate travellers, with their busy schedules demand convenience and home-style living that only a serviced apartment can offer,��� says Brad Edman, country director of marketing, Marriott International.��� The average rates have increased by more than 30% from 2005 and the occupancy rate is around 90%,��� he added.

A two-bedroom apartment at the Taj Wellington Mews (which marked Taj Group���s foray in the serviced apartments category) is priced at Rs 5,75,000 (exclusive of taxes) a month. Apart from the branded players, a few lesser known options are also available. For instance, New Delhi Business House owns four properties in Delhi. A two bedroom apartment in South Delhi is available for Rs 3,000 per day or Rs 60,000 a month.

With India attracting lot more travellers and expats relocating to India the demand for serviced apartments will only grow, experts feel. ���The IT, ITeS and BPO industries are the key drivers of the demand for serviced apartments. Cities such as Pune, Hyderabad and Bangalore will see a boom in the number of serviced apartments, originally a Mumbai phenomenon,��� says Mr Thaker.

vishakha.talreja@timesgroup.com