When Adria Swarney, 50, a homemaker from Australia, scheduled a knee replacement surgery at Fortis Hospital, New Delhi, she realised that it would be a long haul. Her husband booked them into a serviced apartment near the hospital through the website >ratedapartments.com , where they stayed for two months till Adria recovered.
As medical tourism booms, it has spawned an unexpected beneficiary: the serviced apartment industry. Increasingly, these apartments are coming up in locations close to hospitals, making it convenient for patients and their families to stay there and commute without spending much on transportation.
Medical tourists prefer serviced apartments over hotels for a few, very solid reasons. First, they are more cost-effective than hotels, offering private homes, where families can cook, relax and stay under one roof, for a reasonable price.
Second, most of them are professionally managed, with 24-hour concierge and emergency assistance, which are vital especially for patients who come from other countries. Finally, apartments for patients must be planned well, with lifts and all amenities. Hygiene is important and rooms must be periodically cleaned and linen changed. All this is part of the serviced apartment contract.
Typically, serviced apartment costs for medical tourists are different from what is offered for short-stay corporate clients. Says Sid Narang,founder-CEO,
ratedapartments. com: “The European market has been aggressively marketing the concept of serviced apartments. Now, India being its top (medical tourism) destinations has also joined the league.”
Then there are companies such as Alacruity that take care of the entire pre- and post-hospitalisation services for both Indian and global patients. Among the services offered is long-term accommodation, which Alacruity does through serviced apartments. Says Shyam Zanwar, managing director, Alacurity: “We explore the options based on budget as well as requirements. We offer best terms, as the services are pre-qualified by us and we pre-negotiate with service providers. This saves a lot of stress for the patient.” In turn, they charge a 15 per cent commission.
Of course, other sectors like IT, ITeS, BPO, consulting and financial services have also driven this demand. Chennai alone has close to eight organised operators, with an inventory of 450 rooms. Some key players include Seasons, Ascott, Lotus, Blossoms and Star City.
Last year, Somerset Greenways came in with 187 rooms, while Shangri La Hotel plans 52 apartments this year.
Despite all this action, Chennai is actually among the slower markets compared to other metros. “Room supply is growing at 15 per cent per annum across India,” says Akshay Kulkarni, regional director - hospitality, South & Southeast Asia, Cushman & Wakefield.
There are about 2,500 units across seven metros, handled by roughly 35 operators, with average occupancy ranging from 55 per cent to 75 per cent. “Bengaluru has been the front-runner in the market followed closely by Mumbai,” says Kulkarni.
Close to 4,500 units are in the pipeline across the top seven metros. “It is the emerging trend in corporate hospitality,” says Sudeep Jain, executive VP – Jones Lang LaSalle Hotels (India). “It works very well in metros and Tier II cities where starred hotels are notoriously overpriced.”Also, with the aggressive expansion of companies into satellite cities, townships like Gurgaon, Manesar and Noida are sub-cities where the concept works extensively.
Property developers are now seriously eyeing the sector, with serviced apartments a part of their regular housing projects. “The main reason for this is the strong return that mixed-use projects are capable of fetching,” says Kulkarni. Also, it allows long-stay visitors to have a readymade ‘neighbourhood’ for the duration of their stay. “Entire buildings are being converted into serviced apartment blocks, points out Jain, adding that serviced bungalows are another emerging trend.
Interestingly, mainstream hotel chains such as Marriott, Taj, Leela, and Hyatt are also tapping the business. It allows them to reach the price-sensitive client, since the segment operates at far lower costs and has a smaller staff to guest ratio. The extended stay business in metros makes for about 12-18 per cent of a hotel’s business.
In Chennai, rents are low, averaging from Rs. 2,200 to Rs. 3,200 per day, although there is a niche, upscale segment serviced by companies such as Somerset Greenways. Rents across the country for corporate clients range from Rs. 2,000 to Rs. 8,000 per room night. “Medical tourists staying for long durations pay between Rs 40,000 and Rs. 200,000 per month,” says Zanwar. The costs go up based on the city and the amenities on offer.
The good news, according to Kulkarni, is that the high growth rate might put a downward pressure on average room rates. Meanwhile, shrewd investors have quickly entered the model of buying residential apartments, outfitting them, and letting them out as serviced apartments, either by themselves or through professional agencies.
