Online hospitality firms ride popularity wave of homestay business
Alternative stays or non-hotel accommodations in India is likely to touch $3 billion by 2020—report by BCG and Google
Mumbai: After a year of scouting for the right buyer, 50-year-old Ermin Sarkari decided to rent out his two-storey bungalow at Lonavala as short-term stay for travellers. The four-bedroom property called EL House is listed on Vista Rooms, a start-up holiday home listing site, at prices ranging between ₹17,500 to ₹35,000 per night.
Sarkari said his property is booked almost all the time since he listed it earlier this year. He no longer plans to sell it. "I'm really happy. In fact, I'm planning on renting it out in similar way for another property," said the Mumbai-based architect.
While Sarkari has rented out an entire bungalow, several others have opened up their private apartments and rooms to short-term travellers, thanks to the growing number of online hospitality sites offering such services.
Riding on the popularity of homestays and the success of international accommodation listing site Airbnb, several online domestic travel and hospitality firms are rushing to list individual residences and apartments other than hotels.
Vista Rooms, which started as an aggregator of unbranded hotels in 2015, has shifted its business model to listing only homestays, particularly luxury holiday homes. Amit Damani, co-founder of Vista Rooms, said around 100 homes in Maharashtra and Goa have been listed so far in the last one year. The company plans to take around 250 homes in the next nine months. "We expect to clock four times the revenue this financial year end as compared to the previous year," he said.
Airbnb, a San Francisco-based online market place which pioneered the concept of renting homes and apartments for travellers, is doubling their home listings in India each year. At present, around 35,000 homes in India are listed on its platform. "Airbnb listings in India have grown by 115% over the past year. We have also witnessed almost two times growth in the number of nights booked on Airbnb in India since 2016," said Amanpreet Bajaj, country head, Airbnb India, in an email response.
"Airbnb has opened up the homestay market in India as well," said Vista Rooms' Damani.
However, unlike Airbnb, most of the domestic online travel and hotel firms have focused largely on luxury holiday homes and homestays in popular tourist destinations.
Online hotel aggregator OYO Rooms, which piloted the concept of Oyo Homes in 2016, has so far listed around 2,000 homes, particularly in destinations like Goa, Pondicherry, Udaipur, Mussoorie and Coorg. "The rationale behind exploring this segment was the abundance of empty, unutilized ‘holiday homes’ or second homes that owners were only able to visit a couple of times a year in India’s favourite destinations," said Kavikrut, chief growth officer, OYO.
Though alternative stays or non-hotel accommodations in India currently occupies a small portion of the entire Indian hospitality market, it is likely to touch $3 billion by 2020, according to a July 2017 report by Boston Consulting Group (BCG) and Google.
"Players in the space have the potential to innovate as travellers, both domestic and foreign, become more open to alternative stay options," it said.
Domestic travel sites like Makemytrip and Yatra.com started exploring the homestay space in the last two years. According to Rajesh Magow, CEO, MakeMyTrip India, the segment for alternative accommodations like homestays, apartments and apartments is “massively underpenetrated.”
“The kind of exciting alternative accommodations that are available in India today is a sea change from what was there a couple of years ago,” said Magow. In 2016, MakeMytrip acquired alternative accomodation platform Rightstay, though the brand was discontinued later.
Instead Makemytrip continued to list homestays under its own website.
Magow said such accommodations are growing rapidly in cities where there is a shortage of hotel rooms. "Darjeeling, Shillong, Coorg are some of the places where we are able to cater to the growing demand by providing alternative accommodation options," Magow said.
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