Renting an apartment in lieu of a hotel room is hardly new, but the idea is starting to take off, especially with businesses. Take this report from India’s Economic Times:

Already on a cost-cutting mode, a number of corporates have preferred tying up with operators of service apartments which are 20-40% cheaper compared to hotels. According to global real estate consultant, Jones Lang LaSalle Meghraj (JLLM), there has been a 7% increase in such tie-ups in the last six months, when recession took root in the country. Eyeing the future potential, some of the organised players in this segment like Royal Orchid and Signature Crest have also chalked out expansion plans.
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“There can be between 20-40% saving, especially with corporate discounts. Moreover, service apartments offer business travellers facilities such as fully-equipped kitchen with self-catering facilities, various bedroom choices, lounge and relaxation areas, etc. Another cost-effective factor is that in service apartments, occupants save on the bar bills, inflated internet and telephone charges as well as restaurant bills that typify most hotels in the 4-5 star category,” [JLLM managing director (west) Pawan] Swamy remarked.

Few chain hotels have made this a top priority yet. Sure, there’s the Residence Inn and the Extended StayAmerica family, and on the classier end of the spectrum, Starwood’s Element.

But the majority of apartments are still small operations, unaffiliated with major chains. And the problem, if we can call it that, is that quality of apartments can vary greatly, and that the majority of rental apartments are targeted to tourists, not business. The market still focuses on “vacation rentals,” instead of business rentals. And what’s good for a tourist isn’t necessarily business-friendly. If you scan the offerings at websites devoted to apartment rentals — such as VRBO.com, HomeAway.com, Zonder.com, VacationHomeRentals.com, EVRentals.com, and Rentalo.com, to name just a few — you’ll be hard-pressed to find business-centric properties.

Instead, the short term business-oriented apartment rental market remains highly localized, with small operators working out arrangements with large firms’ local offices. But perhaps a confluence of factors will lead to consolidation of apartments designed for business travelers: Combine an increase in recession-era demand from companies hoping to lower lodging expenses with a decline in hotel investment, and 2009 could be the year of the business apartment.

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