Infinity pool, private jacuzzi, steam and sauna facilities, and a personal home theatre – the idea of a holiday steeped in luxury has really taken hold globally, especially among older millennials.
This current generation of 30-something intrepid travellers prefers authentic experiences and shareable adventures, far from the madding crowd. They want both an Instagram-worthy picture and a locally-flavoured unique experience. These trends have unsurprisingly impacted the way the travel and tourism industry itself is evolving.
Keeping up with the trends is Mumbai-based Vista Rooms. From budget hotel aggregation, the startup–founded in 2015 by avid travellers Ankita Sheth, Pranav Maheshwari, and Amit Damani–has switched to private home management.
Vista Rooms operates a network of luxury holiday homes today, with ‘premium’ and ‘comfort’ being the key USPs of its chain of 350+ deluxe properties spread across more than 30 cities in India and Sri Lanka.
“When we started, we wanted to bring some standardisation to the budget hotels, where we had encountered multiple challenges. Budget hotel owners were reluctant to raise their properties to the standards we were trying to establish,” says Amit, Co-founder and Head of Sales and Marketing at Vista Rooms.
The biggest challenge was the unwillingness of hotel owners to observe quality and hospitality in their essence, he adds. Faced with this roadblock and encouraged by the potential of the holiday homes segment, Vista Rooms, in January 2017, pivoted its model to explore the luxury sector.
According to the founding trio, Vista Rooms offers its guests something they can’t resist – the opportunity to holiday in the top 1 percent of luxury homes in India. From the backwaters of Alleppey to the palatial properties of Udaipur, the startup’s offerings for young travellers ensure the comfort of a home and the standards of a hotel.
Holiday homes – or the ‘second home’ space as the founders call it – is a sector that allows them to adhere to a high standard of quality, a USP that Vista Rooms takes pride in.
Incidentally, the company’s tryst with the holiday homes segment has a personal story behind it. It all started a few years ago when Amit’s grandmother, finding it difficult to manage her second home on her own, decided to sell the property. Amit stepped in and helped out by putting the house up for rent on an online portal.
Although the plan for that home didn’t work out as anticipated, the incident did steer the entrepreneur’s attention towards a particular issue – the average homeowner’s troubles with managing a second home. All across the country, owned properties are sitting unused, raking in huge maintenance bills, or are in the hands of unfavourable tenants.
“That’s how the model came to be – we identified the business opportunity in a space like this,” says Amit, explaining,
“We chose to focus on holiday homeowners because they are people who have some sentimental value attached to their homes. They do care about the quality on offer to those who choose to stay there. They also care about the overall long-term maintenance of the home.”
He adds, “We are able to build a better relationship, one with more value and loyalty, than we could ever have with a budget-hotel owner.”
In addition, this model holds value for every stakeholder involved. For homeowners, the service covers the maintenance of the properties and ensures a continuous, hassle-free stream of revenue from the second home. And, for travellers, it’s a welcome break from the cookie-cutter hotel experience.
The Indian online hotel-booking industry is estimated to generate around $2.3 billion in gross bookings by 2020, according to a report by Deutsche Bank AG. Vista Rooms is primarily competing with several local, regionalised holiday-home rental companies.
The startup’s business model is markedly different from that of other prominent hotel aggregator chains like OYO and MakeMyTrip.
Instead of spending a significant chunk of its budgets on marketing and enticing customers with unaffordable discounts, the luxury villas aggregator has been focussing on growing sustainably as a business.
Says Amit, “Our approach has been to build an extremely capital-efficient business and still have a runway of over two years; a strategy that seems to have resonated in the investors’ circle as well.”
Vista Rooms has been backed by eminent investors including former Google India head Rajan Anandan and Freshworks CEO Girish Mathrubootham. Singapore Angel Network has also bet on the brand.
In 2017, the startup raised over Rs 5 crore in a pre-series A funding round from a clutch of investors including seed-stage investor Artha India Ventures and venture capital firm Singularity Ventures. Prior to this, in December 2015, the company had raised about Rs 3 crore in seed funding.
With a fresh influx of capital and rising interest from investors, the quality standards as observed by the company have also grown, the founders say.
“We are very selective about the type of homes we work with. Only 1 out of 50 properties makes the cut,” says Amit, who, besides spearheading sales and marketing, also handles the company’s operations in Sri Lanka.
He points out that each of the homes they choose to manage has to have its own USP and charm, which is ensured by checking over 200 parameters before the home is selected.
The founder shares that 30% of Vista Rooms’ current bookings come from repeat customers. “These are people who have stayed with us and are likely to share their experience with their groups, and hence the referrals,” explains Amit.
The running of a deconstructed hotel in essence, with rooms spread across the city, versus a single property is a herculean task in terms of operations and processes. This complexity is accentuated with home-stays and holiday homes that hold out the promise of indelible experiences. In delivering an unforgettable experience, says Amit, technology plays a vital role.
“We have had to innovate, using technology, to create operational processes in the hospitality industry that never existed previously since our supply is so distributed,” he explains, adding, “Our objective is to be the ‘Marriott of Homes’.”
The company extends its services not just for guests but for property owners as well. Vista Rooms, comprising a 200-member strong team today across India and Sri Lanka, has signed exclusive management contracts with homeowners on a revenue share model. On average, these owners earn at least 30 percent more (than what they would get as rent from tenants) by working with Vista Rooms, according to the founder.
Unsurprisingly, this business model has impacted the company’s revenues. Following the pivot, not only has its revenue been on an upward spiral (it grew 4X in FY19) but is also on track to grow 4X in FY20.
The founder is confident that, by 2020, the startup will be adding more than 1,000 holiday homes across South Asia.
But, numbers are just one part of their growth story, says Amit. The real fulfilment is in being a stickler to the quality of the experience offered and the other standards they have set for themselves, he shares.
As he puts it, “The most gratifying part of our work is to see our homeowners going back to their homes and feeling that it’s in a better condition than before.”
(Edited by Athirupa Geetha Manichandar)