OYO Rooms, the budget hotel aggregator, has forged partnership with Uttarakhand Tourism Development Board (UTDB) in order to develop a network of better stay options for visitors coming to the region. The brand has signed MoU with the state to develop hospitality ecosystem in the state according to a statement by OYO Rooms.

According to OYO Rooms, the company currently runs 15 homestays in the region and they are registered with the state government. They are looking at a number of 50 homestays by the end of this year. Similar to hotel properties, OYO is standardising the homestays and equipping them with standard OYO amenities the hotel aggregator claims to offer at the hotel properties.

OYO says that the brand is already working with other state governments as well, including Maharashtra and Telangana to develop a tourism ecosystem.

Commenting on the development, Shailesh Bagauli, CEO, Uttarakhand Tourism Development Board said, “We are confident that OYO’s expertise in standardising and marketing large inventories to customers in different parts of India will drive immense value to this partnership. We look forward to our joint efforts contributing to increased tourist influx and a better stay experience for visitors to Uttarakhand.”

After budget hotels, homestays are gaining lot of interest from startups and major travel brands alike. Airbnb is stirring things up on a global scale while in India, Stayzilla seems to be leading the trend of homestays. Major OTA Yatra.com introduced TG Stays under which they are offering alternative accommodation options. MakeMyTrip also expressed interest in the segment. Oravel Stays, the company that operates the brand OYO Rooms first started in the alternative accommodation segment but later went ahead in the budget hotel space. However, alternative stay isn’t a segment to be missed and that is why the brand is coming back to it. Indian market offers its unique share of challenges for these players as shared by Stayzilla founder Yogendra Vasupal. There is lot more groundwork required for the platform before people would start trusting and booking. It will be interesting how this segment pans out with the multiple players showing signs of movement.

Source: Business Standard

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Gurgaon based vacation rental startup Guesthouser is looking to raise a Series A round of funding soon. They are looking for funds worth USD 5-7 million to expand the team, add new technology and promote the brand. The company started over a year ago and received its initial seed funding of USD 5 million by Milestone Ventures.

Guesthouser offers alternative stays on its platform and the offerings range from treehouses to villas. According to the report by The Hindu Business Line, Homestays account for over 55 percent of the listings on the platform. They plan to increase their focus on the North East as they go forward. According to the Founder & CEO, Dhruv Dutt Sharma, the region hasn’t got infrastructure for large hotels which adds to the potential of alternative stays in the region.

Many players have recently started making move in this space. Stayzilla announced that they will be increasing their focus in this space and also introduced a new app so that users can easily search. Yatra.com also made a move in this space and introduced their brand TG Stays to take a bite out of the pie when it is baked. Of course Airbnb is there but isn’t a very strong player in India yet. But according to Julian Persaud, Regional Director, APAC, Airbnb, the brand has a strong focus on India and the competition is good as it prepares the market. With the next round of funding, Guesthouser will be marketing aggressively to stay competitive in this growing segment.

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Yatra, the leading online provider of travel services in India, has recently introduced TG Rooms and TG Stays. TG Rooms is their range of budget hotels while TG Stays includes verified homestays.

With 500 accommodations in 60 cities, TG Rooms and TG Stays will offer basic amenities to its budget travellers. TG Rooms will have free Wi-Fi and Air Conditioners while TG Stays will provide reliable and verified and comfortable homestays in prominent holiday destinations of the country. The starting price of such accommodations is INR 499.

According to the report, Sharat Dhall, the President of Yatra, quoted:

“Growing our hotel business is a key focus for us, and the launch of TG Rooms and TG Stays is another step in the same direction. With TG Rooms and TG Stays, we are looking to expand our inventory even further and offer travellers a diversified portfolio of budget accommodation options. TG Stays is targeting a new segment in the market by aggregating verified home stays, which are especially ideal for short vacations, weekend getaways and road trips that are gaining immense popularity amongst Indians…”

Dazzled by the kind of progress OYO Rooms is making in India, many small and big players have entered the budget hotel segment recently. After taking note of the opportunities in this space, almost everyone is trying to take a bite out of the pie. However there is more to it for the OTAs like Yatra or GoIbibo.

With brands like OYO Rooms and ZO Rooms expanding quickly, this was definitely expected from the OTAs (Read: Will budget hotel startups eat the OTA pie?). The comissions from hotel bookings drive large volume of business for the OTAs. With the kind of size these budget hotel startups are growing to, OTAs were under threat of being pushed out of the equation. With the entry in this segment, they will try to build up on their name and widespread network before the dust settles. GoIbibo recently introduced GoStays and there have been reports of MakeMyTrip working on something along the same lines. With the kind of reach Yatra has among hoteliers, reaching different geographies shouldn’t be Yatra’s biggest problem. The problem would be posed by budget hotel chains like OYO Rooms and ZO Rooms which have already grown big and are expanding aggressively.

Homestays are also starting to catch up and we will see them as a major trend in few years (Read: 5 upcoming travel trends in India). In India, Stayzilla is making most headlines in this space while Airbnb has been a party killer for hotels in many other countries. Over the years Yatra has built strong trust among Indian travellers and that can help drive people towards homestays with TG Stays. TG Stays has got huge potential as Airbnb isn’t a big name in India yet.

While they have made a move in homestays in time, we can’t say the same for TG Rooms. They will face stiff competition here and many others have a lead with the head start. Plus there will be more competition with other OTAs entering the picture and the price war might get even more aggressive.

What do you think will change with the entry of OTAs in this space? Do you think they can be a threat to brands like OYO Rooms and ZO Rooms?

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