Stayzilla aims to create 5 lakh homestay rooms by 2021

Online marketplace for stays, Stayzilla, aims to create 50 new tourist destinations in partnership with State governments, create one lakh new entrepreneur hosts in the homestay segment and five lakh homestay rooms by 2021.

The six-year-old start-up, which offers three kinds of stays on its platform including homestays, alternate stays (guest houses, lodges, mom ‘n’ pop run 15-20 room hotels) and structured stays (1-star – 3-star hotels), counts homestays, a segment it introduced two years ago, as its unique value proposition.

“From 7,500 homestay rooms priced from ₹800-15,000 per night last year, we have ramped up to 40,000 homestay rooms in 900 cities/towns. Earlier this year, we introduced luxury homestay accommodation like beach villas, fort/palace rooms at ₹45,000–50,000 per night,” Yogendra Vasupal, founder and CEO, Stayzilla, told BusinessLine .

Pointing out that homestays, the new upcoming segment is witnessing an uptick in bookings mainly because it offers value for money to families and groups of travellers, he said: “Last year half of our marketing spend went into creating supply of homestays by conducting 600 townhalls which are awareness and on-boarding sessions for potential hosts in partnership with 7 State Governments. It paid off as homestays account for 40 per cent of our revenue today, up from 4 per cent last year.” Alternate stays contribute 40 per cent and Structured stays remains flat at 20 per cent.

To create supply to fill the estimated shortage of 2.5 lakh rooms in the country, Stayzilla has opened up two new tourist destinations – Majuli and Mulbekh. “We are creating a unique inventory of homestays starting with Majuli in Assam, the biggest river island in the world in the Brahmaputra River and the first island district in India. We have also opened up Mulbekh in Ladakh situated 45 km away from Kargil for homestays and will open up another 48 new tourist destinations over the next 5 years,” said Vasupal.

Stayzilla sells 6,000 room nights a day and receives ₹2,200 on average, per room night in the homestay segment and ₹1,600 in the alternate and structured stay segments. The start-up says revenue per room night has gone up 3X from ₹60 to over ₹200 for homestays and ₹160 from other stays.

It has mopped up $37 million in funding from Nexus Venture Partners, Matrix Partners and Indian Angel Network to date and is looking to raise its next round of funds.

While Stayzilla’s revenues rose threefold in FY 2016, its losses more than quadrupled for the same period. Asked when Stayzilla will break even, Vasupal said, “Although we are incurring losses at a P&L level, our unit economics per sale remains healthy as we are not losing on room sales. We will continue to invest to scale our business and choose growth over breaking even for the time being.”

The start-up is currently focusing on generating dynamic supply of homestays for the December 20 – January 10 holiday season when popular tourist locations such as Goa, Kodaikanal, Coorg and Ooty get totally sold out. Stayzilla has 55,000 properties across 4,500 cities/towns in India.

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