Home in a hotel

You get more for less in a serviced residence, so tourists and business travellers seem to favour them over star hotels

After a delightful family holiday to south India in April 2010, British tourist Graham Andrew John was stranded with his family in Bangalore for a week, because of the volcanic ash cloud from Iceland’s Eyjafjallajökull volcano.

“Our first night, in an airport hotel, was so dire that we resolved to move into town. To make life a little more normal for the children we thought we would try an apartment. Melange was a small-print ‘you could also try’ suggestion from the Lonely Planet Guide, but turned out to be absolutely the best choice we ever made in that chaotic week,” says John about his experience of a serviced residence in Bangalore.

More and more families visiting cities for more than a week, and corporate travellers who spend months in a city on projects, are opting for serviced residences.

The serviced residences market in Bangalore is on the upswing. US-based Oakwood Worldwide has established its base in Bangalore, as has France’s Accor Group. Bangalore-based players, including early movers like Melange, Brigade Homestead and Halycon, are also tapping into this market aggressively. More global players including Hilton are expected to start operations soon.

Costs are lower than in a typical hotel in a similar category. A five-star hotel costs at least Rs 6,500 a day. Tariffs at a serviced apartment of similar standard could start at just Rs 2,500 a day. “Therefore, a serviced apartment is more a like a no-frills cost option, but still with five-star quality and ambience,” notes Dinesh Talera, director of Melange Astris, among the early movers in this segment in Bangalore.

Serviced apartments offer an experience different from a hotel, and much cheaper, though the customer gets more space. Usually hotel rooms range from 200 to 350 sq ft in size, while the smallest serviced studio is about 450 sq ft. The size can go up to 1,200 sq ft for a two-bedroom serviced residence.

The trend of choosing serviced apartments over hotels is sharpening among families; people visiting for medical treatment, who require longer stays; relocating employees; and corporate travellers.

Today every city in India offers serviced apartments. Unfortunately this sector is not regulated, and the tag is used by guesthouse operators, owners of single-unit apartments on lease, and various unprofessional vendors — all of which hurts credibility.

This issue of standards has created some difficulties for the industry and is slowly being addressed. Some regulation has come in of late. Both central and state governments have recognised serviced apartments as a distinct category in hospitality. The tourism ministry has also started issuing star categorisation to serviced apartments.

Talera adds, however, that “the categorisation criteria may need to be oriented to serviced apartments, as they are in the developed countries, rather than keeping them almost the same as for hotels.”

Grand Mercure, part of the Accor Group, has recently re-launched in Bangalore and offers a mix of five-star hotel and serviced residences in the same complex. Hemant Rai, GM of Grand Mercure, Bangalore, says, “We are offering the same level of services for a hotel guest as to a serviced residence guest. All our rooms are equipped to handle short as well as extended stays, and we are getting traction as we move ahead.”

The number of professionally run serviced apartments in Bangalore in the upper category is now 350. In the second category there are about 750 units. That makes 1,100 rooms in all categories in Bangalore — and demand is growing fast.
 

Where and how

MELANGE
Tariff: Rs 2,500-15,000
Contact: 080-30732400, 41479242,
astris.reservations@melangebangalore.com

MERCURE
Tariff: Rs 7,000-25,000
Contact: 080-45121212, h7155-re@accor.com

HOMESTEAD
Tariff: Rs 4,700-7,000
Contact: 080-22220966/67/68, enquiry@homesteadbangalore.com

OAKWOOD
Tariff: Rs 12,600-34,000
Contact: 080-22348888, csr.premierbangalore@oakwoodasia.com

HALCYON
Tariff: Rs 4,700-7,200
Contact: 080-41102200, halcyongroup@vsnl.net

The market share of room nights for serviced residences is currently about 5 per cent, compared to hotels. It is expected to reach 25-35 per cent in the next few years, even as the number of hotel keys will rise.

HVS-International, a hospitality-focused consultancy firm, says that Bangalore is set to get 300-500 units from Hilton, Le Meridien and others. The supply of branded serviced apartments is scant across in India, with the exception of Mumbai — the commercial capital has the Taj Wellington Mews, Lakeside Chalet Marriott Apartments, Grand Hyatt Residences and Grand Residences attached to the InterContinental, making a total of over 400 units.

Delhi NCR is expected to get 500 units from the Marriott Executive Apartments, Oakwood, Westin and Leela. The Marriott’s units will be in Gurgaon. Gurgaon already has 30-40 unbranded units, while Noida has the 44-unit Savoy Suites.

Talera says the future of fully serviced apartments and residences is bright in India, where all sectors require extended and long-stay options equivalent to star-category hotels, but at lower costs.