Risks & Pitfalls in Serviced Apartment & Villa Projects — And How a Market Study Helps You Dodge Them

 

The serviced living concept is proliferating in India backed by growing demand for larger spaces, exclusivity, tailor-made hospitality, and the long stay market. Across the length and breadth of the country, service apartments and managed branded villas are thriving. Interestingly the concept is moving beyond urban corridors and becoming popular across tourist destinations, industrial corridors, semi-rural settings, verdant urban peripheries, smaller towns, etc.

In a time, when the nature of hospitality & tourism is becoming experiential, exclusive and curated, investing in service apartmentscan be a source of constant rental income. In the past service apartments or villas where mostly frequented by business travellers and medical tourists. However, these days they are actively used by leisure tourists, pet friendly travel, adventure tourists, nature & wellness travel, family get togethers, etc. After the advent of many hospitality operators, managing such a property is not much of a hassle.

Meanwhile, though a promising segment of modern hospitality, the service apartment sector is not devoid of challenges. There is high competition not just from mainstay hotels and resorts but also emanating from other segments of serviced living such as co-living. Likewise, seasonal demand can be deal maker or breaker. Demands might pick-up during certain seasons, while in others the occupancy may dip. Weekends might see near 100% occupancy, whereas the same might lower down to 30-40% during weekdays. In certain cases, the cost of operation and maintenance can go higher.

A prudent approach to assess whether to invest or not in a service apartment could be commission a market study prior to committing any capital outlay. A market research study can offer a lot of valuable insights about market size, addressable market size, go-to market strategy, risks & mitigation, key consumer segments, segmentation & positioning strategy, etc. This can help a discerning investor or business owner to make informed business decision and reduce risk.

To know more about the service apartment market in India, feel free to drop us a mail at info@theindiawatch.com or connect us 8076704267

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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