Being in the right place at the right time was crucial for one fast-growing Indian company, which shares its recipe for success in the $36bn hospitality space

If you think the B2C market is saturated, then you’re probably in the wrong market.

“We have not even scratched the proverbial tip of the giant stay market in India,” says Yogendra Vasupal, the founder of Stayzilla, which with 19,000 ‘stays’ across 1,200 cities is today the largest value and budget accommodation end-to-end managed marketplace in the country.

Launched back in 2010, the team hasn’t looked back. If anything Vasupal wishes they had widened their vision much earlier to look at the larger ecosystem of stays beyond just hotels to homestays, lodges, jungle lodges and the entire universe of alternative accommodation.

The hospitality industry in India is currently pegged at $36 billion, with some 84% being spent by domestic travellers

It’s not difficult to see why. Today, the hospitality industry in India is currently pegged at $36 billion, with some 84% being spent by domestic travellers. Given that this figure is poised to double in the next ten years and today there is already a shortage of close to 100,000 rooms in the country, there is huge opportunity for expansion and growth. Another point to note is that in the value and budget segment, 200,000 room nights are booked daily. Yet Stayzilla along with the other top online players contribute less than 0.5% of this figure.

“And this does not take into account the alternative accommodation space, which is at least 1000 x bigger than the structured space,” Vasupal says.

That said, India is a challenging market so what has been the secret its success? According to Vasupal there are three essential components:

·        People and culture

Organisations are always about people and cultures.

“The founders, their passion, the confidence and the belief they bring to the table are of paramount importance,” he says.

Having a diverse talent pool enabled Stayzilla to overcome some early challenges. For example, as the group expanded their network across tier two and three towns they quickly realised the biggest barrier was language.

“India is a diverse country with multiple languages and dialects, but we capitalised on the diversity of our talent pool to overcome this,” he says.  

·        The business model and the uniqueness of the business

Stayzilla was born out of the vision of creating a focused online marketplace for ‘stays’ covering almost every city, town and ‘zilla’,  aka district, in India. When the team looked at the various sectors that it could have possibly ventured into, what they found was that India’s stay market was huge and largely unfragmented. This provided an opportunity to create a niche in the market to offer value and budget stay options to travellers that did not previously exist.

·       The brand value proposition and technology

One of the biggest challenges is establishing whether there is a market for your product or idea and then if the market is ready for it. With new technologies such as big data, analytics and cloud, companies are able to gain real-time insights about the market, understand customer needs and preferences better and roll out services and offerings accordingly. According to Vasupal using technology to effectively mine data and identify key booking trends and patterns is essential. To this end, Stayzilla has also built a proprietary Bayesian Prediction engine which allows for forecasting room availability, taking into account multiple variables such as seasonality, past consumer booking trends and so on.

The team also realised that there was a need to educate partners across various aspects of the stay. This meant applying industry best practices, standardising services, increasing accessibility for the facility and technology adoption to make the entire reservation process faster and easier, encouraging alternate / day stays and so on.

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