Close to one thousand guest houses, and approximately 5,000 paying guest facilities, are running across every nook and corner of Gurgaon – be it the posh localities in ‘New’ Gurgaon, or the laid back ‘Old City’. But surprisingly, there is no regulatory framework for such commercial activities.
HUDA considers running a guest house in a residential area to be illegal. Recently, a raid was conducted by the authorities, sealing a guest house for failing to follow ‘norms’. But guest house owners are asking what the norms are. Where is the regulatory framework that allows them to do business legally, and in a fairly reasonable manner?
Having little or no legal mechanism for this commercial activity, which is running on such a large scale, is a perfect recipe for disaster. “There is no regulatory framework or norms for setting up a guest house in Gurgaon. The land use policy in the City is not flexible, and HUDA considers guest houses as a commercial activity. Quite often raids are conducted to stop these facilities, but this is a farce,” says one of the owners of a Guest House, who runs a chain of such facilities across the National Capital Region.
Being a commercial and IT hub, Gurgaon has a huge demand for guest house rooms, as corporate executives belonging to different companies come here both for a short term and long term stay. The City also caters to a large population of call centre and software employees, as well as students, who stay in paying guest facilities.
Industry watchers says that the time has come for the Haryana government and the District Administration to make a policy for guest houses in the City. Jaideep Ahuja, a guest house owner, says that most of the guest house owners want to run their business legally, and as per the standards set by the government. In Delhi, Ahuja says, the government has come out with a clear cut policy on the change of land use for commercial activities. “We know clearly how to get the licenses, where to apply, what clearances are required. Here in Gurgaon the authorities should take the industry into confidence, and ensure that the guest houses become even more organised than Delhi,” he says. That is because the potential is greater here.
Having a regulatory framework will not only help this industry in Gurgaon, but also ensure that the government gets a fair share of the revenue. This could be in terms of stamp duty, for allowing change of land use to the owners; as well as more taxes.
Gurgaon has become an IT/BPO hub because of its reputation as a global ‘low-cost’ destination. The companies would therefore like to use guest houses and paying guest facilities to house their employees. A room in a good guest house, with all the modern facilities, is available from Rs. 1,500 to Rs. 4,000 per day. For long term stays, the rates vary, and guest house owners throw in good discounts for guests who opt to stay for a month or more.
Asif Siddiqui, Executive Director of Gurgaonstays.com, an online platform for guest houses, says that there is great demand for guest house rooms in the City, as they offer better stay, more comfort, and homely food – at a reasonable price. “The added attraction is that most of the guest houses in Gurgaon are close to IT and corporate parks, and that makes it easier for employees to commute,” says Siddiqui. He also opines that a lot of corporates prefer to lease guest houses for executive accommodation.
“If you stay in a hotel, the cost multiplies three times; and with the kind of travelling done by FMCG and IT executives, the travel bills can be excessive,” says Ahuja. Recently, around 200 employees of Genpact, Jaipur had come for training to Gurgaon, and stayed in guest houses. No IT/BPO company will house these many employees in Trident, Oberoi or Leela,” he states. His suggestion is to streamline this industry, have better rules, and ensure that all follow the guidelines. “Right now anyone with a house feels he can open a guest house; but it is unsafe and unviable to have such facilities run in the City,” he says.
Siddiqui, who represents a bevy of guest houses in the City, says that despite such large numbers, most of the guest houses are run by people who are not from the hospitality industry. “Most of the owners are either investors or home owners, and they do not understand the intricacies of this business,” he says.
While the guest houses in Gurgaon are getting good business, the oversupply of rooms in the City could hamper the business. However, Sidiqqui says, apart from the usual corporate customers, medical tourism has helped boost the occupancy rates of guest houses. A number of guest houses have come up around the Medanta Hospital, Artemis and other medical facilities. “A lot of people from East Africa and Gulf countries are coming to Gurgaon to avail medical facilities. Since they do not want to spend money on hotels, they stay in guest houses,” says Siddiqui.
While DLF Phase 3, DLF Phase 1 and Sushant Lok 1 are the hub of guest houses in Gurgaon, a large number of such facilities have lately opened on Sohna Road – as there is an increase in the commercial occupancy of buildings there. Ahuja says that the demand for rooms is directly proportional to the leasing of the commercial space in the City.
Although the guest houses have the advantage of a smaller number of rooms and more flexibility as compared with hotels, customers feel they must have quality and standards at par with budget hotels. In comparison to Delhi, the visitors to the Millennium City are mostly corporate travellers. Of course, Delhi has the benefit of a mix of tourists, leisure travellers, transit visitors – which ensure that there is no dependence on any particular section.
One of the pitfalls of having a guest house or hotel in Gurgaon is that it is directly related to the fortunes of the industry – particularly IT, which keeps on fluctuating as per the global economy. An owner says that it is becoming increasingly difficult to run a profitable facility in the City, particularly when anyone can open a guest house anywhere, any time.
While guest houses are a hit with corporate travellers, there is a new trend of fully serviced apartments that are increasingly being preferred by senior corporates. These apartments come at a hefty rate of Rs. 1.25 to 1.5 lakh per month, and are available in some of the best condominiums of the City – and in some of the best locations. Sidiqqui says that mostly senior company officials, or people relocating to Gurgaon, prefer these apartments – as they want a safe and comfortable stay. Money is not a major issue for them. A number of these apartments are also leased by MNCs, who use them to house their foreign guests, customers and top officials, for short term stays as well, he reveals.
In addition to the high end residential solutions, Gurgaon also a has a number of Paying Guest houses that provide stay for a monthly rent between Rs. 4,500 and 7,500. The facilities include bed, food and power back up for the residents – who are mostly employees of call centres, or members of sales teams, or students, who prefer to stay in shared communities rather than being alone.
Dharmpal Sehrawat, who runs such a facility in both Sector 46 of Gurgaon and DLF, says that all kinds of people come to stay in their guest houses. “We have corporate employees, students, trainees, marketing staff, and IT experts staying with us. They come from all parts of India, but they have the same needs – like homely food, staying with a community, and helping each other,” he says. Most of the residents of guest houses agree that it is not only economical to stay in such facilities, but they also offer safety, a spirit of camaraderie, and food which is better than available outside. Gurgaon being a cosmopolitan city has a multi-cultural population, and these paying guest facilities accommodate all kinds of people. Dharmpal says that he has guests from South India, West India, and a large number from Bihar and UP – who he says are now becoming a dominant force in the IT industry.
Prem Kumar, a Marketing officer of a US based company, who stays in a DLF guest house, told Friday Gurgaon that he has been enjoying his stay in Gurgaon for a long time. “I like this City, as it offers world class facilities, looks almost like Singapore, and offers opportunities for growth,” says Kumar. He further adds that with this pace of growth, Gurgaon could soon eclipse Bangalore as an IT destination.
Bhushan Kumar from Andhra Pradesh says that he finds the food and location better than the hotel. “The Paying Guest houses allow me not to worry about food and other mundane things. I can concentrate on work,” he says.
Another resident, Ashish Chander Trivedi, a Doctor in Life Sciences, shares an interesting anecdote of his stay in a rented room, as a tenant. “I stayed for two months in a room, and was always worried about food, washing clothes, internet. I could not take it anymore, and thereafter shifted to this guest house,”
Many people like Trivedi are availing the facilities of these guest houses, which are increasing by the day. Guest house owners says that with such a large demand, and increasing supply, it is important to regulate the business - and have a proper framework in the City. “Many of us don’t talk to the press, as we are scared it could bring the spotlight on us. The authorities need to clear the gray areas, and ensure that the system becomes transparent,” he says.
Ahuja exhorts,“If Delhi can do it, why not Gurgaon?” Definitely, the right Millennium attitude.