ONLINE AGGREGATORS IMPACTING HOMESTAY BUSINESSES

IN INDIA

The number of tourists visiting India as well as the domestic tourism has
increased manifold during the past few decades. After the tourism
attraction program, known as “Incredible India”, the country has been
witnessing a large influx of tourists and increased in the overall
hospitality and tourism sector. As per Ministry of Tourism, Foreign
Tourist Arrivals (FTAs) in India increased 19.5 per cent year-on-year to
630,000 in May 2017. FTAs on e-tourist visa increased 55.3 per cent
year-on-year to 68,000 in May 2017. In recent times it has been noticed
that not only local but also foreign tourists prefer to stay in the
comfortable and cozy environment of a home. It allows them to have the
feeling of ‘home away from home’ and gives them a chance to mingle
with local people, discover local home made cuisine and stay away from
the hustle- bustle of the city life. This trend of Homestays has been
rapidly becoming popular with the help of online aggregators. Online
aggregators are websites or software that collect (aggregate) a particular
type of information from several online sources.

Web based technology has an important role in the tourism and

hospitality industry. Due to the popularity of the Internet, the services of
accommodations, transportation and tourist destinations, offer their
products and services online. Online aggregators for homestay businesses
promote all registered homestays and the websites’ main objective is to
provide users with reliable information and act as a gateway for
homestays for prospective customers. Being an emerging concept, India
can be a model for the Homestay business due to its multi-faceted
potentialities. The rich heritage and culture of India along with its warm
hospitality puts our country on the bucket list of all those people who
wish to travel. A homestay business offers the traveller a unique local
experience and possibility of interaction with the host. With the help of
the online aggregators, the homestay business in India is booming, giving
the host chance to earn income by renting out their spare room or house,
but it should be kept in mind that the portal charges anywhere between
10-25% of the tariff as their fee. Homestays tariffs are 20-40% cheaper
than hotels. These homestays include heritage bungalows and villas, farm
stays, plantation stays, nature resorts (tree houses, bamboo huts, mud
cottages) for anywhere between Rs.800-Rs.35,000. It has been seen, ever
since the emergence of homestays, people have started to prefer the
homely environment as against luxury hotels.
‘Atithi Devo Bhava’, a famous saying in India, which literally translates
to, ‘Guest is our God’, shows the love and respect Indians have towards
the tourist. India has set a benchmark for hospitality all over the world
and it seems as though in recent times more and more people want to
experience it. Those tourists who choose to stay in hotels are unable to
experience the real hospitality and warmth of the people of this country.
This is one of the main reasons for the rise in popularity of the homestay
trend in India. The government aims to provide standardized world class
facilities and a comfortable stay to any tourist visiting the country and to
ensure availability of accommodations in metros and tourist destination,
the ministry of Tourism classified fully operational terms of Bed and
Breakfast/Homestay facilities as “Incredible India Bed and
Breakfast/Homestay establishments.” This concept aims to provide an
affordable and comfortable accommodation to foreign and domestic
travelers. This will give foreigners an opportunity to interact with the
locals and experience the India traditions and customs. The government
has gone one step further to provide a better experience for those tourists
who choose a homestay/B&B by developing a database for all registered
properties, across India which online aggregators such as Stayzilla and
AirBnB can use. The Commerce Ministry has asked NITI Ayog along
with the help of State Governments to constitute a Rating System for all
the properties. This rating system will not only make India ready for e-
tourism but it will give an idea as to what a guest can expect from that
homestay/B&B in terms of amentias, services and all other things that
can be offered. The online aggregators need to work with the State
Government to ensure the success of this rating system. In Kerala and
Karnataka, the homestays are classified under three categories,
“Diamond”, “Gold” and “Silver whereas in the state of Rajasthan only
categorizes them as “Gold” and “Silver”. The higher the category of the
homestay, higher will be the yearly fee depending on each state that the
homestay will need to pay to the government,.

Online aggregators are beneficial to both the business as well as the

customer. It provides a structural benefit to the business listing that are
registered with them, ensuring a higher conversion rate ie. a listing has
better chance to get an actual deal or booking. As for the customers, they
appreciate the aggregators as they simplify the buying process. They
minimize the need to shop around a highly fragmented industry. The
customer can view all listings along with amenities, prices and listings at
one place. Due to the vast information provided, it gives customers the
confidence in making a more informed decision. Aggregators can be
viewed as a more source because of the different reviews available. A
famous Homestay aggregator in India, Saffron Stays has taken steps
which ensures both the host and guest are making a well informed
decision before either one of them decides to rent out their place or make
a booking of that listing. It allows the guest to view the profile of the host
to whom the accommodation belongs to and read reviews and collect
information about the listing. Once the guest has made a booking, it lets
the host view the guest’s profile and check the trust rating given to
him/her which gives him a chance to either confirm the booking or reject
it incase he does not find the guest reliable. Saffron Stays also safeguards
the payment for the host as the website collects the money from the guest,
on behalf of the host as soon as the booking is confirmed and when the
guest checks in the money is transferred to the host. This ensures that the
host does not have to worry about non-payment or no-shows.