SaffronStays currently has two business models. One of them is pureplay management contracts where the company goes and manages a home owner’s property, similar to the way hotel companies do. Another method is when the company leases out the property for a period of five years and runs it
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NEW DELHI :
SaffronStays, a hospitality startup which manages and amalgamates listings for upscale homes and villas, plans to add 1,250 rooms in to its India inventory by March 2023.
The five-year-old business has 500 rooms in the upscale and high-end villas and homestays on its platform across India as of now. The company had rapidly scaled up its business within Maharashtra in the last year and a half.
The pan-India expansion will be funded through internal accruals and it may look at raising another round in the next two to three years.
During the pandemic, SaffronStays had consciously scaled down its operations and let go of some properties. "We touched 1,000 rooms and we consciously came down to almost 150-200 rooms only in 2020. Today we are back to about 500 rooms," said Devendra Parulekar, the company's founder.
He said the company decided to take a different approach from its competitors who were scaling up during this time. "We wanted to fix our quality and focused on Maharashtra only," he added.
Outside Maharashtra, the company is now focussing on growing its business in Goa as well as parts of Karnataka, Himachal Pradesh, and Uttarakhand, Parulekar told Mint.
The Mumbai-based company had raised ₹19 crore in pre-Series A funding from venture capital firm Sixth Sense Ventures in 2018.
SaffronStays signed up 30 homes in Goa in the last month and will provide them technology and distribution services. A lot of the Goa homestay inventory is run either by individual homeowners or small operators who amalgamate three or four homes and sell them to companies like SaffronStays. There are about six or seven such operators in Goa who run about 200 such homes, he explained.
"But we will not be an online tour operator ever. And since we work with them, they are not our competitors. We will remain a tech plus operations company. Since we are a curated platform for listings, our customers don't have to plough through thousands of listings like on Airbnb," he added.
Achin Khanna, managing partner, strategic advisory at hospitality consultancy Hotelivate, said the younger generation is gravitating towards more experiential travel and stays and has shown keen interest in choosing homestays over traditional hotels and resorts in recent times.
"The hygiene-sensitive demographic is also loving this alternative. While there is enough and more opportunity for hotels and resorts to continue offering their services to the leisure demand, we do believe that the homestay business model shall meaningfully continue to evolve and grow in months and years ahead," he said.
Khanna said while there is no comprehensive study about these businesses in the market right now, he estimates between IHCL-owned amã Stays & Trails, SaffronStays, and Vista Rooms, etc, there are about 300-350 quality homes available for rentals. “In the unorganised, standalone space, there are probably thousands more."
SaffronStays currently has two business models. One of them is pureplay management contracts where the company goes and manages a home owner’s property, similar to the way hotel companies do. Another method is when the company leases out the property for a period of five years and runs it. It is now also piloting a new technology project wherein it will onboard home-owners who have not necessarily given the brand management rights or leases. These owners can list with the platform and the company will take a commission for every booking but will not look at the day-to-day workings of the properties.
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