• How did you become a successful entrepreneur?
“I didn’t really think about success or failure when I started my business along with my co-founder. I will give due credit to organisations, including IBM and Siemens, where I was employed before, in shaping up my professional skills. I was just unhappy with the limitations for growth when I working as an employee there. I had a clear and compelling vision on how I could fast-track my success and here I am with a successful business, which has continued to thrive and never got close to going belly-up even once.”
“I think my passion for my business has been the most important element of success over all these years. I honestly believe that we had something of great value in the marketplace. The growth we have had and to know that we’re getting better at it every day keeps the excitement alive. Yet I’m curious on how our approach is working, and if there is anything we could do to improve. Risk tolerance is another important element – I was reasonably comfortable to make the tradeoff between a relative secure monthly pay cheque and the working-without-a-net life of a start-up.”
• Describe Skyla’s serviced apartment services?
“SKYLA is a technology-enabled branded chain of premium serviced apartments. Currently operating across eight locations in Hyderabad, India, our brand takes pride in piloting the serviced apartments to a new level with a substantial history of serving more than 200,000 room nights. SKYLA is growing fast in this unique accommodation category: a hybrid between a home and an office with the services of a hotel topped with the social buzz of a thriving neighbourhood. SKYLA is known for its personalised services and differentiates itself on the use of technology across various stages of guest life cycle, be it pre-stay, during stay or post-stay.”
• What encouraged you to start Skyla?
“We noticed stability and opportunity during a crisis – the financial crisis of 2007/08, there was an effect on many industries and travel & accommodation sectors were not spared. We began to notice many travellers enquiring about alternate accommodation options to save cost over their hotel spend. Thus, the idea was born to serve these clients wanting to move away from main stream offerings to much more compelling serviced apartments. It was an opportunity for us to create an innovative solution to an existing problem that rose out of a crisis.”
“Today cost is not the major factor which drives demand towards this format, but there are many other compelling aspects – like high personalisation, convenience and comfort which main stream accommodation offerings don’t provide. In a volatile global economic market, India has emerged as one of the better performing economies of the world – what do you think are the key reasons for this growth. Bold reforms have put India firmly on growth path. The country’s expanding middle class represents a growing source of demand for goods and services from around the world.”
“India’s economy has been experiencing some of the greatest structural changes in a generation. A slate of bold new reforms, embarked upon under the visionary leadership of Prime Minister Modi, has put the country firmly on a sustainable growth path. Additionally, India’s increased focus on digitalisation and the “smart Cities” and “Make in India” initiatives along with growing focus on tourism with the implementation of the E-Visa programme will create opportunities and could help counter any slowdown globally.”
• How big is the serviced apartment and extended stay market in India approximately?
“While there are no published reports with this data point by any reputed research organisations, we can safely assume 25 per cent of the overall total demand is for extended stays in tier 1 cities.”
• What’s the opportunity for serviced apartments and extended stay in India?
“With increased awareness, there are more target segments including leisure travellers, medical tourism, students, interim housing, and NRIs (non-resident Indians), with huge potential which are currently under serviced. These segments are opening up opportunities beyond tier 1 cities and central business districts for serviced apartments and extended stays.
• The Hyderabad serviced apartment and extended stay demand is picking up post the Telangana crisis – what are the main drivers of this growth?
“The revived political and economic climate in the state has led to increased investor interest in the Hyderabad market and the government has focused on driving new investments to the city. In Hyderabad, corporate demand is the key driver for the extended-stay segment; with changes in it directly influencing demand for rooms. Therefore, supply and vacancy rates in office buildings are good indicators of the current and future corporate demand in a city. Demand for corporate office space in Hyderabad outpaced supply in 2016, surging to the highest level since 2011 as large multinational IT firms have expanded their presence in the city. Some of the companies that expanded operations in the city recently include Apple, Google, Amazon, Deloitte, JP Morgan, Qualcomm, Accenture and Uber.”
• How many serviced apartment units does Skyla operate and who is your target market?
“SKYLA currently has 120 apartment rooms spread across eight different locations in Hyderabad and another 60 rooms in the pipeline and to be operational in next there to four months. We are a B2C and B2B focused brand: B2B engagement is primarily with corporates based in Hyderabad and other key major cities in India. B2C (FITs) segments comprise of leisure travellers, medical tourism, students, interim housing and NRIs (non resident Indians).
• What proportion of your demand is leisure or corporate travel?
“Corporate travel is 50 per cent and other B2C segments contribute to the remaining 50 per cent of revenue to us.”
• Does Skyla work with hospitality brands, and if so how?
“From a hospitality standpoint for now, our engagement is limited to selected OTA partners who contribute five to 10 per cent of our revenue. But we are working on various interesting partnerships: one such is – many times our guests look for a collaborative environment or space to host meetings while travelling for work, we want to provide them with options, so for that we are working with some co-working space brands. We are exploring various other partnerships which can add value to our customers.”
• What challenges and opportunities does Skyla face now and in the future?
“We are in a very exciting phase now, with all fundamentals covered and eight+ years of domain backing us we are poised for hyper-growth over the next two to three years. The biggest challenge is our demand outpacing supply if we fail to add inventory at the same rate. From the demand side, we are completely covered with a visibility for additional 100 to 150 keys in the same city from our existing customer base. We are trying to add these rooms in the next two quarters, and simultaneously launch in two new cities.”
“Immediate unavailability of assets that meet our standards in our target locations, and specifications from developers is another challenge we are facing. To mitigate this, along with asset-lease model, we are looking at acquiring assets with flexibility to upgrade it to our standards or greenfield development in locations where in we have a visible demand. Our new property which is in the pipeline is a recent 2M$ acquisition and we will upgrade this to our standards and launch it in next three to four months. We have a unique advantage of being able to predict demand with a proven model, so we are bullish about this asset acquisition model. Depending on access to funds we will be accelerating our efforts in this direction.”
• What’s your advice for serviced apartment and extended stay companies looking to enter India?
“This is an exciting time for any extended stay companies and Hospitality funds to enter India with huge growth opportunity, as this category is becoming an increasingly popular choice for travellers. Brands should be open to look at tier 2 cities as well, and service segments beyond corporate travel with huge potential are under-served today – the FIT markets mentioned above.”</p
