Apartment hotel

Hotels now have competitors in the capital market

At the beginning of 2007, Moscow hotel rooms were recognized as the most expensive in the world. At the same time, according to market experts, price increases do not stop due to a shortage of rooms, and the number of tourists and businessmen coming to the capital is only growing. As an alternative, Russian travel agencies began to offer so-called service apartments that can be rented for a short period.

At the dawn of the 21st century

The short-term (daily) apartment rental market began to acquire civilized forms in the early 2000s. It was then that the first professional operators and management companies specializing in this business began to appear on the Russian market. The peak of popularity of this service came in 2004-2005, when many Soviet hotels began to undergo reconstruction and the number of rooms in the capital decreased. At the same time, serviced apartments were in good repair at an affordable price, equipped with appliances and, importantly, a number of services associated with the hotel business.

Today, the short-term rental market is divided into segments. “We can distinguish two main ones: elite apartments in the center of Moscow (elite apartments in remote areas are not in demand on the market), as well as apartments without European-quality renovation. In parallel with this, the so-called “primitive” short-term rental segment continues to exist, which has always existed in one form or another. It includes those apartments or rooms that are rented by private individuals (often grandmothers at train stations) for a small fee,” says Yulia Mygyeva, marketing director of LikeHome.

Daily rentals are in demand not only among tourists, but also among people who come to the capital on a business trip for a period from several weeks to several months. Moreover, each segment of serviced apartments has its own target audience. For example, apartments in the historical center of Moscow, especially VIP apartments, are of interest primarily to foreign tourists and foreign senior managers who come on business trips.

Despite the fact that the supply of serviced apartments is quite large and is constantly being replenished, agencies advise booking the apartments you like in advance, since the best options “go away” quite quickly.

Not all inclusive

Among the advantages of short-term rental, the following can be noted: first of all, even a small two-room apartment with an area of ​​about 50 sq. m. m, almost twice the size of a standard hotel room. In addition, serviced apartments often have not only a TV, but also a DVD player, stereo system, washing machine, dishwasher and other household items. Well, and most importantly: the apartment has a kitchen with all the necessary equipment: refrigerator, stove, microwave, etc., all the necessary utensils. “All this makes living in an apartment more familiar, one might say, homely and comfortable. This is important when a person returns home after work and wants to relax,” comments the manager of Intermark Serviced Apartments, Denis Shmarev. “Among other advantages of apartments over a hotel room, I would mention free high-speed Internet, free calls within the city, and, of course, the daily cost such a lease."

Professional rental agencies provide their clients with a service similar to that of a hotel, often without additional payment. Typically, the rental rate already includes the following services: cleaning the apartment several times a week, changing bed linen and towels, 24-hour maintenance, security, calling a taxi, and information support. Some companies also provide registration at the place of stay for non-residents and foreigners free of charge. The client can receive other services for an additional fee.

“However, if something happens to a guest staying in our apartment (for example, the door does not open, the lock is stuck, etc.), then, although we have a 24-hour hotline, help will not come immediately, as in a hotel where all the service personnel are in one place,” notes Yulia Mygyeva from the LikeHome company. Some tenants also note the lack of a lobby and reception, a buffet, and a fitness center included in the price as a disadvantage.

It is also worth keeping in mind that when renting an apartment for a short period, the landlord determines the limit of guests. As a rule, one or two people can stay in a one-room apartment, and three to four people can stay in a two-room apartment. The number of residents is often specified in the agreement that the tenant enters into with the rental company. The price often depends on this same factor.

The longer, the cheaper

Apartments for short-term rental have another advantage over a hotel - their price. Savings can be up to 50%. The cheapest apartments can be found on the outskirts of the city from private owners; their price can be about 1000-1500 rubles. per day. The closer to the center, the more expensive. Rental rates inside the Third Transport Ring start from 2,000 rubles. So, for example, a one-room apartment in the Central Administrative District will cost an average of 2,500 rubles. Rental rates for two-room apartments start from 3,500 rubles, and three-room apartments from 4,000. Prices for VIP apartments are quite high, in some cases comparable to prices for a five-star hotel and can reach up to 11,000 rubles. per day. For example, a two-room apartment on Old Arbat with European-quality renovation is offered by the agency for 6,000 rubles. per day, and on Tverskaya there are offers for 10 and even 11 thousand rubles.

When setting the price, the main indicators are the number of rooms and the location of the apartment. The most expensive apartments are located on Arbat, Ostozhenka, Tverskaya, as well as in the Zamoskvorechye area. “An important role is played by such indicators as the quality of repairs and furniture, as well as the presence or absence of security and a concierge,” says Olga Sugonyaeva, head of the rental department of the DOKI real estate agency. The Intermark Serviced Apartments company also believes that pricing is influenced by the type of house and the quality of repairs in the entrance, the view from the window, as well as the length of stay. “Our company has adopted the following rule: the longer the guest stays, the lower the daily rental rate. For example, a one-room apartment near the Mayakovskaya metro station will cost 6,500 rubles. for stays from 1 to 3 days, 5300 rubles. for stays from 4 to 10 days, 4200 rubles. for stays from 11 to 29 days, 3900 rubles. for a stay of 30 days and 3600 rubles. for stays of 90 days or more,” notes Denis Shmarev.

Short-term rental rates are growing quite rapidly. Thus, according to the DOKI company, over the past year prices have increased by 30%, Likehome analysts believe that by 20%, and the Intermark Serviced Apartments agency suggests that the price increase was 15-20%. “This is due to rising prices for long-term rentals, which, in turn, is associated with rising prices for purchasing apartments. Most companies offer apartments for daily rent, which they rent from the owners. Accordingly, rising prices for long-term rentals force companies involved in short-term rentals to raise rates,” notes Denis Shmarev.

How to become a landlord

Renting out apartments for short-term rent is becoming more and more profitable for their owners. A potential landlord can go two ways: engage in this business independently or turn to a professional operator.

In the first case, the owner will have to overcome some difficulties. According to Yulia Mygyeva, not every person will rent an apartment from a private person, as this is associated with the risk of being deceived or receiving a service of inadequate quality. Secondly, an advertising campaign can only be provided by a company with a more or less significant turnover. Thirdly, providing basic service will require such time and physical expenditure from the owners that, having got a job somewhere, they will receive more as a result,” says Ms. Mygyeva.

In the second case, you can hire a professional company. Today there are more than 100 different companies on the market specializing in short-term rental of apartments, but not all of them are able to provide a continuous flow of clients and maintain your apartment in good condition. When choosing a company, you should be guided by the following criteria: how long the company has been in the market, its reputation and clients, and also, importantly, the number of apartments that are already in the company’s database. Having decided on a company, you need to keep in mind that there are two options for cooperation. In the first case, “the company you contact will take control of your apartment, evaluate it, and you, in turn, must provide all documents confirming ownership rights and sign an agreement. The rest is the responsibility of the management company,” said Olga Sugonyaeva from DOKI. In this case, the owner receives a market rental rate, and his apartment is fully managed by the company.

In the second case, “the company looks for clients for the owner and receives an agreed commission. In this case, the rental rate will be higher, but the owner bears the risk of downtime in the apartment associated with finding new clients, and also independently carries out the maintenance of the apartment. But even with this option, our company provides a maid at its own expense, and also independently handles the check-in and check-out of clients,” said Denis Shmarev.

Short-term rentals have some advantages over long-term rentals. By entrusting an apartment to a professional operator, the owner can be sure that his property is in good condition, and the management company itself is interested in this. The same cannot be said about individuals renting for a long time. True, there is also a small risk. According to DOKI specialists, this is the risk that the apartment will not be in demand, but these risks are assessed at the initial stage by a consultant, who will ultimately determine what is more profitable for this particular apartment - long-term or short-term rent.

Some experts argue that the profitability from short-term rentals is slightly higher than renting out an apartment for a long time. “Profitability depends on the conditions for providing the apartment for management - the long-term nature of the contract with the company and many other conditions. The main thing is that the profitability of short-term rentals is higher than from long-term rentals, subject to successful implementation. But this already depends on the professionalism of the management company,” notes Olga Sugonyaeva from DOKI.

True, the LikeHome company is convinced that there is practically no difference in profitability. Denis Shmarev from Intermark Serviced Apartments notes that everything depends on the type of cooperation between the landlord and the company. If the company does not rent an apartment for a long time, but is only looking for clients, the owner wins in terms of money, receiving a rental rate that is 50-70% higher than for a long-term lease. At the same time, when renting out an apartment to an operating company, the owner receives a market rental rate, as with a long-term lease, but the company takes on all customer care and maintenance of the apartment.