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Tuesday, July 27, 2021

HVS Monday Musings: Homestays in India are Gaining Popularity in the Post-COVID Era

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The popularity of homestays has increased manifold in the post-COVID era when social distancing, cleanliness, hygiene, and privacy have become the top priorities for travelers. Hotels have several touchpoints and larger footfalls compared to homestays, which has made the latter the preferred ‘getaway’ accommodation in the current scenario. Moreover, with the advent of the ‘work-from-anywhere environment, homestays at motorable destinations from city centers have been witnessing exponential growth in the past one year driven by long-stay, staycation, and workcation packages.

Homestay, however, is not a new concept in India. In the past few years, an increasing number of international and domestic travelers in the country have been preferring cozy homestays over conventional hotels in their quest for the authentic, local travel experience. Additionally, the informal environment, flexibility, and ‘value-for-money’ provided by a homestay, especially when traveling in a large group, are other factors that have been driving the growth of this segment. However, the homestays segment is still at a nascent stage and is highly unorganized, with the presence of very few branded hospitality players, especially in the luxury segment.

The Indian government has over the years provided several incentives such as subsidies and relaxation in licensing rules etc. for homestays as it helps in promoting eco-tourism, rural tourism and improves the socio-economic conditions of the region by creating alternate income for the local communities. Moreover, it has also helped in reducing the demand-supply gap at several destinations, especially those at remote locations which are not yet commercially fully developed. For instance, the homestays in Sikkim and Ladakh have played a significant role in boosting tourism to these places. More recently, the Ministry of Tourism also introduced training workshops to enhance the hospitality skills of homestay owners in the country. This initiative is also creating awareness amongst local communities about the benefits of homestays.

Developing a good quality homestay network can help in tapping the full potential of leisure tourism in India in the future. A growing number of travelers are seeking ‘memorable experiences’ at previously unexplored leisure destinations in the post-COVID era. There are several such unexplored and underdeveloped hill stations, wildlife sanctuaries, beaches, and heritage sites in India which can be developed into established tourism destinations but are lagging due to lack of quality accommodation. Homestays can help bridge this gap especially at places where developing a hotel can be commercially unviable due to the high land and construction costs and the tedious approval process. Developing a luxury homestay at such locations will be a better value proposition due to lower overhead costs and higher profitability compared to a regular hotel and will also help in the holistic development and growth of the destination itself.

President (South Asia) at | + posts

Mandeep S. Lamba, HVS President of South Asia, oversees the practice in the region and is based in New Delhi, India. Mr. Lamba is a hospitality professional with an established leadership track record of over 35 years in varied roles with international leading organizations, including 17 years in CEO positions. Mandeep has extensive experience in hotel operations, development, strategy, and hospitality advisory, having worked for companies such as Choice Hotels, IHG, and Radisson Hotels before becoming President of ITC Fortune Hotels in 2001. After successfully building the Fortune Hotels midscale brand in India, Mandeep ventured into an entrepreneurial stint for over eight years, setting up joint-venture companies with Dawnay Day Group UK and Onyx Hospitality Thailand before joining Jones Lang LaSalle in 2014 as Managing Director, Hotels & Hospitality Group – South Asia.

Mr. Lamba’s current role at HVS involves advising investors on their hospitality-related growth and acquisition strategies; working with hotel owners and operators on asset management and raising debt and equity; consulting on feasibility, valuations and market studies, and participating in HVS’s Executive Search for hospitality and real estate leadership positions. An established industry leader, Mandeep has won several awards and recognitions for his accomplishments and contribution to the hospitality industry. He is a member of the Tourism Council of CII (Northern India) and a member of the Royal Institute of Chartered Surveyors, UK (MRICS). Recently, he was featured in the Hotelier India Power List of the most respected hoteliers in India for the second year in a row. For more information, please contact Mandeep S. Lamba at mlamba@hvs.com.

Senior Manager - Research at | + posts

Dipti Mohan, Senior Manager - Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in research-based content creation. She has authored several ‘point of view’ documents such as thought leadership reports, expert opinion articles, white papers and research reports. Contact Dipti at dmohan@hvs.com

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