Bootstrapped Pajasa Apartments aims to transform corporate stay in India
Online serviced apartment aggregator service Pajasa Apartments provides a lower-cost alternative to expensive hotel stays for corporates, NRIs, and other frequent travellers.
Founders: Paras Sangwan and Arpit Awasthi
Startup name: Pajasa Apartments
Sector: Hospitality
Problem it solves: Corporate stay
Year it was founded: 2014
Located in: Mumbai
Funding: Bootstrapped
Thrity-three-year-old Paras Sangwan had realised there was a serious problem in the way serviced apartments were made available to the end consumer. He had worked as a general manager for Mumbai-based serviced apartment Lake Bloom Residency for three years.
During his stint he found that most corporate clients were interested in booking a serviced apartment instead of hotels as it was a cost-effective and convenient for corporates for long stays.
But the issue was searching for the right kind of serviced apartments, at the right location, and at the right time. That’s why in most cases, hotels, the more expensive alternative, would be booked.
The beginning
It was to change this that Pajasa Apartments was formed. It is an exclusive serviced apartment aggregator, which works exclusively with corporates to maintain high standards for corporate stay.
“The idea is to eliminate the concept of a guest house and thereby remove the fixed cost of any corporate organisation,” Paras says.
He roped in 29-year-old Arpit Awasthi as Co-founder. Paras had met Arpit at a paying guest accommodation in Mumbai; at that point, Arpit was working at Accenture. Paras set up Pajasa in 2014 at Powai Plaza, Powai, Mumbai, and initially Arpit worked weekends to help develop the technology.
“Our first employee was hired through reference and she is still in our team. Now we have a team of eight people, including a core developer, digital expert, accounting professional, content writer, sales manager, and photographer,” Paras says.
The duo knew that most owners of serviced apartments had properties in select areas, making it difficult for admin staff to find apartment vendors. Also, the owners weren’t keen on putting their properties up on OTAs (online travel agents) as their focus was on corporate guests.
What does it do?
Pajasa provides serviced apartments, with a working kitchen on a daily, weekly or monthly basis, to corporates on a pay-as-per-use cost.
“This is usually 40 to 50 percent lesser than hotels. We are trying to become an alternative to guest houses that companies take on monthly rental basis and which increases their fixed cost,” Paras explains.
The idea is to provide corporates with stays near their work location across all metro cities in India. With the concept still not very popular in the country, each city has its own rules for serviced apartments. Pajasa’s main challenge was to set uniform standards across India.
Citing an example, Paras says in Mumbai all serviced apartments include electricity costs in their tariff, in Delhi, apartment owners’ charge extra for electricity consumed.
“We have created our set of rules and based on them we contract with serviced apartment owners across India. We assure that all amenities and services will be available, irrespective of location,” Paras says.
Challenges of the market
With the industry still organised, it is a challenge to organise all details, including stay enquiries from corporates to bookings, guest stay, billings, and feedback flow, so that apartment owners can manage their apartment without any hassle.
“We have created a fully online web application form to onboard a corporate and also have serviced apartment inventory that creates automated bookings, invoices and reports,” Paras says.
The startup works on a B2B model. Once an organisation joins Pajasa, their admin sends a booking request with details either via email or the app. The system creates a ticket for the request and checks apartment availability; a manual check is also conducted by the team. This ensures the best apartment is provided to the guest. The system then creates a booking and sends a booking voucher and SMS to guest and admin.
“We have a process that shows monthly invoices and we provide our client one invoice for a month that create a value addition to our client. Our 24x7 support number is available for any escalations,” Paras says.
The team claims to have a RMV (Room Booking Value) of Rs 7 crore as of November last year. They claim to have booked 25,000 rooms till date, adding that over 150 clients and are present in the top 10 cities in India.
The market and the future
According to a PwC report, the residential rental market in India is pegged at $20 billion, of which urban spaces account for $13.5 billion. The founders of CoHo, in fact, peg the co-living market at $10 billion. Tiger Global-backed NestAway has raised a total of $43 million in funding and is already present in eight cities.
However, corporate serviced apartments follow a different model. An IBEF report states that five start hotel room rates in the cities of Mumbai, Bengaluru and Delhi are currently averaging at $500 a day. Many are looking at serviced apartments for a cost-effective solution.
The team is targeting listing 50,000 room keys on the website. They also aim to register more than 2,000 corporates, and generate over one lakh room nights by 2020. Also on the anvil: increasing the team size by 50 and working on complete automation of the booking process.