Long-stay travel in India - The giant is waking up
The long-stay market in India is currently experiencing an exponential growth with over 236 upcoming projects in the pipeline. Multiple international brands have plans to expand in the country. However the long-stay accommodation supply is still underdeveloped and trying to catch up with the much higher demand caused by the massive increase in business travel.
As a result, corporations have started looking for alternative sourcing arrangements. Some companies have come up with their own corporate houses. Others have partnered with brands to build extraordinary units specifically suited for their requirements. These companies would have to guarantee a minimum number of bookings for a period of 4-5 years in order to cover initial construction costs, as part of the agreement with the supplier.
Demand saturation continues increasing around business hubs
The Indian accommodation market is heavily segmented by the massive demand originating from the business concentration in specific hubs. The cities with the highest demand for long-stay business travel are Bengaluru, Mumbai, Pune, Delhi, Chennai, and Hyderabad. These cities currently have the highest concentration of IT, finance, manufacturing and industrial hubs.
A segmented supply: International vs. local brands
Despite the rapid growth, the Indian serviced apartment industry is still at an early stage. Next to the already established international brands, countless small, regional operators coexist, profiting from the existing gap in long-stay accommodation supply.
When it comes to the amenities and services offered, international brands in India will maintain their well-known quality, while regional operators won't offer the same level of service and will usually lack facilities like gym, spa or restaurant.
Local travellers prefer to share their serviced apartment
Indian business travellers value convenience, comfort and connectivity above anything else. When choosing accommodation, they specially look out for a good location followed by other factors such as pricing, amenities and Wi-Fi availability.
Contrary to other countries, sharing 2-bedroom serviced apartments is sought after in India. The bedroom and bathroom will be separate, but common areas like the kitchen and living room will be shared by both guests. Non-shared apartments are also common in India but not nearly as wide-spread as double shared apartments.
Additionally serviced apartments in India offer their guests a unique service, consisting of a professional caretaker who is permanently available at the property. This person looks after any of the guests’ requirements like cooking, cleaning and buying groceries at a minimal additional cost.
Things to keep in mind when travelling to India for business travel
Business travellers moving to India should have nothing to worry about, when it comes to covering any of their basic needs. If anything, there could be just a couple of things that foreign travellers might have trouble adapting to.
India is well known for how widespread the English language is among its citizens. Speaking the local language is thus not required. Basic services such as accommodation, transportation, alimentation and medical assistance are affordable for most foreign standards.
In terms of food, international dining options are widely offered in tier 1 and 2 cities. Also most Indian super markets do offer a wide range of international foods and other commodities. However in tier 3 cities and smaller locations travellers might face difficulties in finding western style food.
As far as leisure goes, the standard selection of bars, malls and movie theatres is widely available across the country. Additionally popular weekend gateways are located nearby most Indian cities, where to experience the rich local geography and wildlife.
So what's next?
In recent times we have seen many new players in the airline industry, as well as a higher focus on building new airports in order to offer better connectivity. Over 100 new airports are planned to open in India over the next 20 years, taking the country’s number of operational airports to a total of 200 by the year 2040.
We can also expect multiple serviced apartment brands to continue opening additional properties during the coming years. However it remains to be seen, whether other big global brands also decide to enter the Indian market, and to which extent.
The bottom line is that the Indian and South Asian travel markets are predicted to double in size within the coming decade. Considering the deep transformation the local accommodation markets will have to undergo, it is going to be a challenging and exciting time for travel managers and sourcing specialists alike.
About the author: Monika Meel has over 10 years of experience in the hospitality industry. She has worked in hotel and OTA sectors both domestically and internationally. Since 2018 she is Acomodeo’s lead expert for sourcing projects in the Indian and South Asian territories.
To learn more about sourcing projects at Acomodeo you can reach us at email@example.com or +49 69 400 500 310.
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