Alcove Serviced apartments' on a fast growth track in Bangalore

With the growth of Bangalore as Silicon Capital of India and growth of bio-tech and electronics industries there has been a strong demand for long-stay accommodations. The serviced apartments segment in Bangalore has not really caught up with the demand. Now hospitality operators are beginning to understand the potential of this accommodation category, and supply is expected to increase significantly in the coming years.

A niche offering compared to hotels, serviced apartments are designed for long stay as compared to hotels that cater to short stay. While there are operators selling inventory on a daily basis as well, serviced apartments generally cater to guests with a minimum stay of a week going up to 12 months. Daily rates in a serviced apartment property ranges between Rs 2,000 to Rs 8,000 depending on the market and the monthly charges are anything between Rs 40,000 to Rs 200,000 based on the facilities provided and positioning of the property.

In terms of organized supply in India, industry experts estimate the current serviced apartment inventory to be just a fraction of the overall hotel room supply. According to ‘The Global Serviced Apartments Industry Report 2011-12’ , with room supply growing at 15% a year, India is one of the few global serviced apartment markets where supply is expected to exceed demand in major Indian cities in 2012 to 2013.

Hotel rates have been forecast to fall as a result of increased competition from the serviced apartment and budget hotel sectors. As a result, companies are being advised not to commit more than 75% of their requirement of advance purchasing of room nights at discounted corporate rates. A large number Indian organizations have switched to serviced accommodation. In contrast to Europe and the US, booking of these apartments is left to individual travelers to arrange instead of being managed centrally.

Providing all the features of a hotel, serviced apartments are set in a residential locality, yet situated within close proximity to commercial districts, public transport and local shopping, They offer a much larger space vis-a-vis a hotel room with facilities like a fully equipped kitchen, individual washing / drying machine, ample storage, quality furnishings ensuring comfort convenience, safety and security for the long-stay guests. Due to the under supply of serviced apartments in the country, and perhaps lack of marketing, a significant percentage of long-stay demand is absorbed by hotels; what is not well known is that long stay category contributes close to 20% of the hotel industry's overall business.

Among prominent serviced apartment brands operating in Bangalore is Alcove Hospitality. Alcove has six serviced apartment properties across Bangalore in strategic locations of Koramangala, Electronic City and HRBR Layout. Alcove Serviced Apartments is already present in Chennai, Hyderabad, Pune and Coorg. Alcove is on an expansion path and plans to add more cities to its network. It currently operates with 40 apartment units and is looking to quadruple the inventory by 2013. “We are involved in several projects throughout India for our brand viz. Alcove Serviced Apartment,” says Managing Director, Ajay Dewan, without divulging complete details.