Hospitality industry has always been one of the major growth drivers for the economy, thanks to our culture of ‘Athithi Devo Bhava’. India has always been a major tourist destination on global map due to its diversity, history, rich heritage and culture. The economic liberalization and the subsequent growth reforms have also attracted global majors and individuals to set-up their shops here thereby attracting large number of expats. In order to take care of diverse needs, hospitality players have always come up with number of solutions. Serviced apartments, though not a new concept, have of late caught attention of large hospitality players as well as real estate developers.
In terms of concept, serviced apartments differ from a traditional hotel in terms of duration of stay and provision of basic amenities for daily use, which include a cooking range, a kettle, a microwave, a washing machine, etc. Thus serviced apartments provide a home away from home for short as well as longer stays.
The demand for serviced apartments comes from routine travelers as well as corporate clients. Growth in IT/ITES, Biotechnology, BPO, consulting and financial services has prompted the corporate to utilize the serviced apartments for their managerial staff and long-stay expatriates. This helps them in reducing the overhead cost of accommodations in the recessionary scenario. Demand is also seen from people who move to new city for short duration assignments; since it is difficult to find a regular residential accommodation for short duration lease. The other benefit which the serviced apartments offer is that the employee can get relocated with their family members in the new location.
In India, there is a shortfall of five-star category hotels; due to which these properties have become extremely expensive. In this comparison, serviced apartments offer cheaper and spacious solution.
Tourists travelling for longer duration also prefer serviced apartments as they get all the convenience of hotel rooms at reasonable rates. The latest boom in medical tourism has further propelled the number of serviced apartment projects in India. In last few years, there is a large demand from real estate developers and investors. These apartments provide options for individuals to own a property and lease it back with the developer for investment, assuring 15–20 percent year-on-year returns on the same.