With middle-class Indian travellers looking for affordable holiday options, a stay in a luxury hotel would be inconceivable for most of them. Hotel aggregator Icanstay understood this pain point among budget travellers and commenced operations earlier this year to provide stay in a luxury hotel at a flat price of Rs 2,999 across India.
Icanstay is focused at fulfilling aspirations of middle-class Indians who can not always afford to stay in a luxury hotel, says Puneet Gupta, COO of Icanstay. “We are not fighting for a space in the travel market with companies such as MakeMyTrip or Yatra,” he says. Icanstay does not function like a budget hotel aggregator like Oyo, FabHotels or Treebo as its clientele is limited to luxury hotel chains such as Radisson, Country Inn, Lemon Tree and Royal Orchid, among others.
And to ensure that the brand value of the luxury hotel is not diluted, Icanstay does not disclose the name of the hotel until the booking is confirmed. “To safeguard the interest of the hotel and its brand, the name of the hotel is not revealed until the booking is confirmed. It is a hidden deal for the customer,” Gupta adds.
Luxury hotels operate on 60-65% occupancy on an average and 35% of the inventory lies unused. Icanstay picks up rooms from this pool of vacant rooms for a lesser price. Gupta asserts that the company is not burning cash with this business model. “We have per annum deals with hotels that give them a minimum guarantee of rooms. The minimum guarantee is between 5-10% of the vacant rooms,” he said.
A customer can avail stay in a luxury hotel against a voucher bought on Icanstay’s platform. The user has to create a wishlist with five hotels and dates and gets the confirmation three days ahead of his stay. The voucher is valid for 11 months but the user can extend the validity by additional 11 months for a fee of Rs 100.
Icanstay is recording 60-70 bookings daily which translates into 1,500-1,800 vouchers in a month. For generating revenue, Icanstay makes a commission on every booking but the company declined to share the range of the same. With average value spent on the platform at about Rs 25,000, the company is tracking bookings worth `25 crore for the current financial year and targets annual gross merchandise value of `700 crore by end of FY2020.
Going forward, the promoters of the company continue to explore more travel-focused businesses under the parent company—First Time Travellers. Currently, with a presence in 50 cites with 75 hotels, it seeks to expand to 100 cities with 200 hotels by end of the current financial year. Among existing cities, NCR-Delhi is its top market followed by Mumbai, Ludhiana, Chandigarh and Lucknow. Icanstay also plans to enter markets such as Sri Lanka, Mauritius, Dubai, Nepal and Thailand by the beginning of the next financial year.