Hospitality, The Ekostay Way
"For an industry that contributes to nearly 10% of the GDP, we were truly hoping for some major change in government policies pertaining to the hospitality/travel sector factoring in the 6 months rigorous lockdown that led to major cutbacks and laying off employees as well as properties."
Varun Arora, CEO, and Co-Founder of Ekostay, speaks to Urvi Shrivastav, Editorial BW Businessworld about the tourism industry, the lockdown, and the way forward for hospitality and tourism domain.
Tell us about your venture? What is your startup doing differently?
Ekostay is a hospitality firm specifically catering to the homestay audience for their holidays in touristy cities. We thrive in providing with hygienic, cozy, affordable as well as luxurious homestay options with private and common pools across cities like Lonavala/Khandala, Goa, Alibaug, Mahableshwar/Panchgani, Karjat, Nashik & Igatpuri.
Initially, we were into the construction of second homes in Lonavala and after developing a couple of villas and not seeing that great a demand for them on a sale basis we decided to run them as homestays and saw tremendous demand for the same. That’s when the partners came together and formed the company officially and expanded to various other cities mentioned above.
Moreover, India is a landscape of incredible beauty. That's no secret. We wanted to make neighborhood travel, conscious travel, weekend getaway, and the choice to go places in India more accessible. After a dark year, the sea-sun (season) to travel and explore local beauty is springing, we aimed to make Ekostay a happy and safe place for everyone sans the worries, mundane chores like dishwashing! At the price of a short stay, one can enjoy a long getaway.
What's your business model and revenue visibility?
Over 75% of our business model revolves around a fixed rental model wherein we lease a property and further sublease it for short stays to tourists. And the other 20% works on a revenue-sharing model wherein we do an exclusive tie-up with a homeowner and split the profits with them in a fixed ratio mutually agreed upon. We don’t take up properties that we don’t get exclusive control over, so all the properties that are listed under EKOSTAY’s name are all managed exclusively by us. We’ve been profitable since inception and we sure do plan to keep it that way.
With more people coming into the business, the competition is increasing manifold. How will your startup be relevant and stand out?
In any industry competition ever-growing and being in the game longer than the new entrants gives us an edge over them as we’ve created a brand with a fairly good recall value over the years which they still need to. However, in spite of us taking pride in that brand name we don’t ever take it for granted and continue thriving by changing the look of our existing properties once a year as well as expanding into new markets to increase our inventory more than the previous year.
Will travelers prefer Indian or international destinations?
Travelers will definitely prefer domestic travel in the next year, e.g. according to the survey on Indian luxury travelers conducted during May 2020, Goa was the most preferred domestic travel destination during the COVID-19 pandemic. About 48 percent of the respondents stated that they preferred to travel to whatever place is COVID-free when they want to travel in that year. Just to avoid uncertainty most Indians will prefer familiar national destinations over new international places. Nostalgia and familiar experiences will entice Indian travelers post covid.
Where will travelers go first once the covid restrictions are eased?
Since the outbreak of the COVID-19 pandemic, the lockdown has been imposed, borders closed, and traveling was no longer an easy task. Now, countries are desperate to ease travel restrictions and open the borders once again to resume traveling like before, in a bid to rebuild their devastated economies. Proof of vaccines is easing travel restrictions to some places and is the only way travelers can gain entrance to others.
What challenges are you facing currently and how are dealing with them?
With the budget recently being released and there is no relaxation’s on the tax exemption front or any financial aid from the Centre to the hospitality industry has been quite a disappointing affair to deal with considering the industry was one of the worst-hit during the lockdown. For an industry that contributes to nearly 10% of the GDP, we were truly hoping for some major change in government policies pertaining to the hospitality/travel sector factoring in the 6 months rigorous lockdown that led to major cutbacks and laying off employees as well as properties.
How are you planning to scale up in the current scenario and post-Covid era?
EKOSTAY has been successful in marking its territory in Maharashtra & Goa so far and is further expanding to the North & South of India before the end of this year. We’re targeting Ooty, Coorg, and Coonor down south & Shimla, Manali & Kasol up North. International travel seems to be restricted for another 6 months or so and even once it opens up we don’t know how comfortable will all be traveling overseas until the vaccination drive has been successfully implemented. So until then, we’re definitely looking at great demand for the domestic tourism market.
How do you foresee your startup's future as per the current scenario of the market?
Well, to be honest, we can’t foresee our company’s future based on today’s scenario alone as that would be unfair, keeping in mind everyone’s restricted to domestic travel pretty much and that too till almost the end of this year. However, if we still had to I would say it’s looking “LIT” for sure. If the vaccination drive takes longer than this year to be executed then we could be looking at the same kind of demand even next year.
Did you receive any support from the government directly or government policies?
Unfortunately, there was no tax exemption from the government in their Union Budget nor was there any financial aid. In retrospect, there was a major financial allocation provided to the NHAI for the development of inter-city and state highways, which if executed in good time could then again help with better domestic connectivity, leading to elevating the domestic tourism market which in turn would help our business majorly.
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