With lakhs of foreign tourists pouring into the country for holidays, medical treatment, and business purposes, the concept of home-stays is gradually on the rise, especially in places like Goa, Kerala and Himachal Pradesh. Besides foreigners, even Indians tourists are opting to stay in home-stays. According to Tarun Tammanna, a student of St. Joseph’s College, Bangalore, who has done extensive research on the subject, “Many students and IT professionals travel to places like Coorg and Mysore during the weekend or on special occasions, and prefer living in home-stays. For Rs. 700 a night, they not only get lodging and food facilities, but also a family that makes them feel right at home”.
Even though there are many agencies that deal in providing home-stays to tourists, it is only a small part of their overall business. Many pose as agencies only for home-stays on their Website, but just a quick call to them shows that home-stays are only part of the several other modes of lodging they have to offer to tourists. Players that are solely dedicated to marketing home-stays are few in number.
How huge is the untapped potential? Like mentioned previously, in the scenario of the upcoming Commonwealth Games, we have a shortage of 30,000 rooms, and there are only around 200 homes registered under the Incredible India scheme in the cities of Delhi NCR and Jaipur. Assuming that each house in these cities have two rooms on an average, this still adds up to 400 rooms registered in this region. Clearly, there is still a lot to be done!
Who are the current players?
Ask Dhrubajyoti how he conceptualized the Bharat Homestay portal and he replies, “My colleague, Sandip Chhetri, CTO of Bharat Homestay, stayed as a home-stay guest on his business trips to other countries. Not only did he get a taste of the country’s way of life, but he also didn’t miss home as much. We wondered that if the concept could work in other places, then why not
After traveling extensively to places all over India and studying market trends, Dhrubajyoti realized that although the home-stay concept was flourishing, it was very difficult to actually find one. News about home-stays usually travels through word of mouth—something that doesn’t appeal to the high-end tourist. There was a need to bring them to a single platform. The portal Bharathomestay.com, created about a year ago, is not only doing that, but also educating hosts about how to showcase their homes on the Net and use to it enhance their business.
The Website now has around 1000 visitors and about five to ten registrations on a daily basis. “Our Goa and Kerala home-stays receive an average of 10-15 enquiries daily, which is good considering that the concept of a home-stay is still at a nascent stage,” says Dhrubajyoti.
Similarly, Comfort Homestays claims to be the official agency to register and market home-stays across India. Brainchild of Maharaj Inder Singh Wahi, President of Indian Association of Tour Operators, the agency is dealing with 150 rooms with about 40-50 per cent occupancy as of now. “The peak months for tourism start from the month of August, so many guests are expected in the coming months,” says Ekta.
Ensuring safety and quality
One of the most crucial decisions to make in this business is selecting the right home-stays in order to ensure the authenticity of your agency. So how do agencies keep a tab on this? “We follow a stringent selection process and have our own inspection team that looks at various aspects before selecting a home-stay. Even after a home-stay is selected, we make the home owners go through a two-day training process, where they are taught how to enhance the experience of the guests without too much investment,” says Ekta.
Similarly, Bharat Homestay also does a background check that includes their executives visiting the home-stays. Although, according to Dhrubajyoti, they do go easy on those who are registered under the Bed and Breakfast scheme.
So what price tag do these agencies put to their services? In the case of Bharat Homestay, both home-stay owners and guests can register and avail of most of their services for free. As of now, only availing for airport pickups and drops comes at a cost. Revenue is also generated from the various ads on their portal of flights and travel packages that have options of home-stays, real estate companies, e-travel books, etc. “For the next fiscal year, we are thinking of bringing in value-added services, like a 24×7 helpline, home-stay packages, taxi services, etc, for which the users will have to pay,” says Dhrubajyoti.
Comfort Homestays, on the other hand, were initially charging a membership fee of Rs 5,000 from home-stays. Now that the concept has become more popular, however, they only ask for a share of 25% from the business they give to the home-stay owners.
For big and small budgets Depending on how large you want your business to be, investments would be made on setting up an office, developing and maintaining a Website, or even training home-stay owners.
Dhrubajyoti, for example, started with a very modest investment. “I knew I could not spend money on advertising for the portal, so I gave more importance to promoting the portal in search engines. I am currently running the portal from home and the Web designers, promotion team and executives in Kerala and Goa work on a freelance basis,” he says.
Investments in the case of Comfort Homestays have been greater. Besides investing in office space, representatives, Web management, inspection visits and training programs, they also spend on basic supplies like bed sheets, soaps, towels, shampoos, cleaning solutions for floor, utensils, furniture etc, which they provide to home-stay owners, at a cost. “They can purchase these items from us at a cheaper rate than the market, since we buy in bulk from manufacturers,” says Ekta.
What challenges will I face?
There are several reasons why private agencies have been shying away from basing their business model entirely on home-stays. First of all, a home-stay guest usually can’t pay as much as hotels or resorts can for the services offered by portals and agencies.
Secondly, according to Dhrubajyoti, “Home-stays in India mostly cater to a foreign clientele. Indians would rather shell out a couple of extra bucks and stay in a hotel rather than in a home-stay. An average domestic tourist’s vacation varies from four to seven days, so they prefer to pamper themselves in the confines of a hotel”.
Even the foreign clients are some-what skeptical about issues like security and hygiene. According to Anuplal Gopalan, a professor of Industrial Relations at St. Joseph’s College in Bangalore, “Many of the home-stays in villages like Coorg and Cannanore in Kerala are not equipped with facilities for efficient disposal of plastic wastes. In my village, plastic waste has resulted in water logging and an increase in mosquitoes”. If such issues are not dealt with immediately, it could result in a decrease in the number of foreign tourists who choose to stay in home-stays and a loss for those who are organizing stays.
We ran a quick estimate in a very conservative fashion, based upon some figures given to us by Comfort Homestay. It so turns out that by next year, a single agency like Comfort Homestay could make up to Rs 7.6 crore in a year (See estimate table). The good news is that there are only a few players in this highly unorganized and largely untapped sector.
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