Table of Content

1. What is a Serviced Apartment?

2. Why Should You Invest in Serviced Apartments?
3. How to Make Money from Your Serviced Apartment Business?
 Utilise space properly
 Invest in important amenities
 Hire staff to maintain the property
 Bring technology to your aid
 Divide and sell
 Introduce packages and feasible tariffs
 Have a flexible cancellation policy
 Have a robust marketing strategy
 Focus on guest satisfaction
 Keep a check on your online reputation

What is a Serviced Apartment?

Serviced apartment is a residential flat, equipped with services and amenities
that cater to guests for long and short stays.

They are fully furnished with all amenities that are required in a home, such as
a bed, TV, cooking essentials, fridge, AC, and so on. Apart from that, there are
other services that give serviced apartments a luxurious touch like
housekeeping on call, Wi-Fi connectivity, and other additional facilities
available in society/complex (swimming pool or gym).

Often termed as serviced condos and extended stays, this hospitality segment
is one of the profit-making businesses these days. Let me tell you how.

Why Should You Invest in Serviced

Apartments?
First, let’s take a look at the market statistics. As per the Global Serviced
Apartment Industry Report (GSAIR), 2020-21 edition, by The Apartment
Service Worldwide,
 In the past two years, the serviced apartments industry has
seen a growth of 24% in terms of business and capacity.
 In 2020-21, there were 12,54,743 serviced apartments
available for the guests across 15,464 locations.
 The top 15 brands, including chains like Marriott, Accor, IHG,
and Hilton, constitute an inventory of 6,85,303 serviced
apartments at 7,817 locations.
These figures prove that the extended stays industry is booming on a rapid
scale. Moreover, the current scenario of work from home has paved the way
for apartment owners to re-market their property with a new approach.

In fact, I have a real-life scenario to explain why serviced apartment business is

worth investing in. Back in my hometown, one of my friends had a vacant
apartment, which was generally used by us for hanging out.

One fine day, he came up to me with a business plan, which was to rent out
his flat to the local tenants. But, I had a better idea. I suggested to him why
not convert his flat into a serviced apartment?

Furthermore, I explained to him how it works along with the tangible profit. He
was quite intrigued and quickly initiated the setup process.

While researching for this blog, I called him up to get some insights. And this
is what he said:

“There has been an influx in bookings for long

stays, especially during the rainy season. In
fact, I’ve got a couple of clients from nearby
cities that have booked stays for a month due
to their work from home policy. Even the profit
earned is quite higher in comparison to regular
flat rental business.”
So, you see that serviced apartments are faring well in terms of generating
revenue and are in demand as well.

How to Make Money from Your Serviced

Apartment Business?
Now the tips I’m sharing here can work if you have even a single apartment.
Moreover, if you are planning to invest in a flat and convert into a serviced
apartment, these points will be quite useful.

1. Utilise space properly

It’s important to have an understanding of space. Generally, the extended
stays are either studio apartments, 1 BHK, or 2 BHK. This space determines
how many guests you can accommodate in your apartment and work on the
furnishing part accordingly .

Suppose you have an unfurnished studio apartment that is spacious for a

maximum of 2 guests. After initial calculations, you come to a conclusion that
it can be furnished with certain items, such as a bed, fridge, TV, wardrobe, and
so on.
Once you are done, you plan on putting an extra bed to accommodate one
more person for maximising the revenue. I would say it’s an arduous task
considering the short amount of space you’ve in hand.

Even if you adjust it somehow, the place will look congested and there won’t
be enough aisle space to move. Moreover, the room will lack air circulation,
making it feel claustrophobic.

That’s why it’s vital for you to have a clear understanding about your
apartment’s carpet area. It would help you in gauging the space usage and
making further changes.

2. Invest in important amenities

It goes without saying that serviced apartments have to be fully furnished. But,
it doesn’t mean that you need to cover every inch of space with all the
amenities and furniture available in the market. Let me give you a better
insight on it.

There are 2 categories in the amenities that you should have in your serviced
apartment:
1. Necessary amenities

2. Luxury amenities

Talking about necessary amenities, it includes the basic furniture and some
vital services that are found in every home. Here are some of the mandatory
ones:

1. Bed (king/queen size)

2. Table and chair/recliner/couch

 3. Wardrobe

4. Fridge

5. Kitchenette facility (cooking equipment, utensils, and dishwasher)

6. Centralised/Window AC

7. Hot and cold water (24*7)

8. Free Wi-Fi access

9. Housekeeping services

10.TV with dish connection

11.24*7 security

On the other hand, the luxury services and amenities are optional; since it
depends on your budget and guests’ demands. These are some of them
offered by top brands,

1. Bean bags instead of regular chair

2. Laundry facilities

3. Smart lighting

4. Voice control gadgets (Alexa)

5. Gaming consoles (X-box, PlayStation, etc.)

6. Access to premium facilities (Swimming pool, gym, spa, etc.)

7. Hardwood/Carpet flooring

8. Parking facility

9. Resident mobile app

By opting for these or any other premium facilities, you can give your guests a
sense of luxury living and have an edge over your competitors.

3. Hire staff to maintain the property

Just like other hospitality establishments, serviced apartments also require
regular maintenance in terms of housekeeping and repair works. For that, you
need to have dedicated staff deployed at your property.

I would suggest keeping a minimum of two housekeeping staff members that

would be responsible for the upkeep of the property. Also, ensure that they
are properly groomed, trained, and must adhere to the designed SOPs
(Standard Operating Procedures).

When guests check-in at your property, don’t forget to inform them about the
shift timings of housekeeping staff.

If you are deploying a 24*7 staff on your property share their contact
information with guests. In this way, they can connect with the staff whenever
they want to avail housekeeping services.

Word to wise: If you want to avail any kind of deep-cleaning services by

professionals or need to repair something in the apartments, opt for home-
service companies. But again, it’s not advisable to go with it on a regular basis
considering its cost.

4. Bring technology to your aid

Technology has reshaped the working structure of the hospitality industry. In
fact, there are several SaaS companies that provide various solutions for
hospitality establishments.

Start by investing in a PMS. It will help in keeping a track of bookings, manage

requisitions from a single dashboard, collecting and storing guest data, and so
on.
Furthermore, you can integrate it with a channel manager. It’ll aid you in
updating real-time inventory and pushing rates on all the online portals in a
single go.

5. Divide and sell

No, it’s not something that I came up with after reading the freedom
movement of India. When I say divide and sell, it means that rather than
selling your apartment as a whole, you can sell it on a bedroom basis. Let me
explain with an example.

For instance, you own a 2BHK serviced apartment. Now, you’ve listed the
property on various booking portals with a tariff of Rs. 3500 per day. But in
that way, your property can only be rented by groups and families. The other
segments, like individual working professionals, couples, and solo travelers
would be left out.

In order to cater to them as well, you need to adopt the divide and sell policy.
It’s simple, just create a separate room category named as single room on all
the online booking portals.

Once done, you can update the tariff as Rs. 2000 per room per day.
In this way, you can maximise your bookings as well as the overall revenue.
However, keep in mind that the rates you update for individual rooms should
be competent in comparison to that of the whole property.

6. Introduce packages and feasible tariffs

Another strategy to make your serviced apartment business profitable is
having flexible tariffs. That’s one of the prime reasons why people opt for
extended stays.

So, while you work on your tariffs, keep the concept of log stays in mind.
Additionally, you can create packages for long stays, like one week or a
month.

Also, try including meals like breakfast in the tariff. In fact, a report by Seven
Rooms states that,
Around 65% of travelers opt for an accommodation facility offering free
breakfast.
Hence, when you are creating a package, do focus on the meal component.
And for that, you need to have partnerships with nearby restaurants.
Moreover, this will come in handy if guests want to order food from outside or
try local delicacies.

7. Have a flexible cancellation policy

Often guests tend to have changes in their travel plans, which leads to the
cancellation of their existing reservations. However, the cancellation policies of
accommodation facility providers are usually rigid. Which means, either they
suffer a loss or the guest.
That’s why it is recommended to have flexible cancellation policies that would
be in favour of guests as well as your serviced apartment business. For
instance, you can charge a penalty of 25-50% fees if the guests cancel their
bookings 3 days before their check-in date.

Flexible cancellation policies can help in boosting guests’ confidence that they
can book the property without worrying about changes in plans and loss due
to cancellation of reservation. This will result in improving your booking flow.

8. Have a robust marketing strategy

Marketing is one of the important aspects for any organisation to raise
awareness about their product or services amongst their audience. In fact,
there are a gazillion marketing strategies that you can use to promote your
serviced apartment business.

However, it’s necessary to check which ones will work for you. Let’s take help
of an example to understand it better.

Suppose you’ve a serviced studio apartment that is spacious for one or two
guests. So, promoting it to families or larger groups is a futile step. That’s why,
while devising marketing strategies, you need to be aware of your target
audience.

Hence, if you are looking for ways to improve your serviced apartment’s
business flow, you MUST have a robust marketing plan that should be able to
capture the attention of your target audience.

9. Focus on guest satisfaction

Guest satisfaction is the essence of the hospitality industry. The primary goal is
to give guests a comfortable and luxurious experience which is worth the
amount of money invested.
So, whenever you have any guest at your property, ensure you deliver the
highest level of services to them. Also, try to give a personal touch to their
stay by giving them local experience based recommendations.

10. Keep a check on your online reputation

If you thought that reviews and reputation are a matter of concern only for
hotels, you are wrong. Just like hotels, reviews play a vital role in the serviced
apartment business.

As per a survey done by TripAdvisor,

87% of travelers prefer to check reviews before booking any kind of hospitality
business.
So, if you haven’t started collecting reviews for your serviced apartment, you
should consider doing it in the first place. Also, don’t forget to reply to all the
feedback, be it positive or negative.

Download FREE Hotel Review Response Templates

Conclusion
Serviced apartment business is one of the profitable segments in the
hospitality industry. In fact, it’s a great way for builders and apartment owners
to earn a better revenue from their vacant flats.

If you are one of them, this blog is for you. All you have to do is implement
the steps I’ve mentioned and watch the results for yourself.
If there is any other topic you want me to cover, do let me know in the
comments. Till then, happy hoteliering.