By Accommodation Times News Services
The concept of the extended stay hotel or the serviced apartment is typically designed for the traveller who may have to stay for seven or more consecutive days or for just few days. In short a serviced apartment is a fully furnished apartment available for both short-term as well as long-term stays, providing all the hotel like amenities. Service apartments typically include soft furnishings and cooking utensils and services such as housekeeping and front office. Builders in major metro Chennai and Bangalore are now catering to this specific segment. They are also prevalent in smaller cities such as Chandigarh, Coimbatore, Shimla, Hyderabad and Pune etc. Service apartments have been around since 2003 but the concept as an investment option is yet to gather momentum. Prices for serviced apartments are typically lower than equivalent hotel rooms. The market is currently pegged at Rs. 200 crore and growing at a fast 200 per cent per annum. Though the concept of the service apartment is yet to mature and get the industry status but the economic considerations are strong enough to sustain the growth of it. Also there should be firm rules and regulations sanctioned by the authorities for the serviced apartments. The S.A. industry is growing fast and hence there should be clear cut mandate and recognition by the government for the running a serviced apartment (SA). Regular hotels get more FSI at the same time they have more municipal compliances. From a bank’s point of view a serviced apartment is an unit that has management agreement in place, a pooled rental scheme or restrictions on the use of the unit as an owner occupied house. The finance companies and banks are also opening up to sanction housing loans to SA units. Though the lenders has their own guidelines as to the minimum unit size that they will finance. Typically most lenders won’t have an interval living area excluding balconies and car parking spaces) of 50 square meters. In addition to this a one bedroom unit is seen as a lower risk than a studio apartment.