How micro-stay hotel segment has evolved to become most lucrative spaces in hospitality industry

By: |
February 23, 2020 3:40 AM

Some compassionate souls might have felt the urge to ask these helpless lovers to get a room for themselves and safeguard their private moments.

micro stay hotel segment, Lodhi Garden, delhi, Oyo Hotels, StayUncle, BreviStay, MakeMyTrip, clear tripOne of the earliest players in the segment is StayUncle, a Delhi-based hotel aggregator that allows people to book hotels online through its portal.

A late evening walk in and around Lodhi Garden in one of south Delhi’s upscale localities might well turn into a jarring experience laced with discomfiture. Couples sitting in the garden often attract hostile glares from passersby and are subjected to bitter reproaches in hushed tones from the elderly in the habit of taking a walk regularly.

Some compassionate souls might have felt the urge to ask these helpless lovers to get a room for themselves and safeguard their private moments. Now, with changing tides in the Indian hospitality industry, they actually can!

The couple-friendly hotel segment has come a long way from the time when it used to be discussed in hushed tones. We now have players that not only guarantee a safe, secure haven for unmarried couples to spend quality time in, but also provide bookings for as little as three hours. These players are not only challenging societal norms, but are also diversifying their product offerings in an attempt to make the segment extremely competitive.

For the longest time, five-star hotel chains were the only ones to have no discriminatory policies against unmarried or same-sex couples. But their high prices pose significant hurdles for couples seeking privacy and affordability. Some disruption happened in 2013 when Oyo Hotels and Homes started offering a range of properties and stays at differential rates. But for couples looking for privacy for a few hours in their own cities, there wasn’t much on offer. Recognising demand for this untapped segment, hotel aggregators like StayUncle, MiStay, LuvStay and BreviStay have disrupted the space with a variety of services.

With a guarantee of safety, competitive rates, option to make hotel reservations for a few hours instead of an entire 24-hour slot, and absolutely no reservations from hoteliers who accept local identification documents as well, the industry saw a welcome change. Pre-marital sex between consenting adults is now no longer looked down upon by the hospitality industry that has, in the past, received massive flak for harassing unmarried couples and judging their life choices. Besides couples, the micro-stay segment has evolved to target frequent travellers, who have a few hours to kill before they resume their journey for the next destination.

A group of friends looking for a night out can now plan it without any hesitation as they have the option of booking a hotel for a few hours even in the most unwelcoming hours of the night.

One of the earliest players in the segment is StayUncle, a Delhi-based hotel aggregator that allows people to book hotels online through its portal. The idea for StayUncle was conceived in 2013, but the first three years went entirely in making brand-conscious hoteliers and the industry, as a whole, familiar with the concept of micro-stays for couples. They finally pivoted in 2016 and have since partnered with over 1,000 hotels in more than 40 cities in the country. “We originally conceived the micro-stay idea keeping business travellers in mind. But later on, we figured out that Indians were not ready for a thing like that. Then we saw a huge demand coming in from couples. This prompted us to evolve our concept. We changed our target audience from business travellers to young couples,” says Sanchit Sethi, founder and chief executive officer of the company.

But hotel aggregators are not just focusing on couples. BreviStay, a Delhi-based portal that allows people to make bookings for three, six and 12 hours, targets travellers, business clients, couples and people looking for overnight hauls. “Many people need early check-ins mainly to freshen up and get ready for interviews, meetings and various other activities. Couples residing in the same city only need a few hours of private stay as they cannot stay the whole night due to societal and parental pressures. So we combined both segments and now couples have the flexibility to decide their own check-in time and pay only for the hours they stay,” says Prateek Singh, chief executive officer of the portal.

While society’s perceptions towards unmarried couples have changed over the years, there are still instances of people being harassed at the hands of hotel staff. Portals like MakeMyTrip and ClearTrip, in fact, have it mentioned on their websites that unmarried or unrelated couples may not be granted accommodation at some hotels that have such policies. Keeping these factors in mind, Sethi says the filter of perception is the first thing they apply while looking for hotels to collaborate with. “More than the rooms, we focus on the staff, try and see if the staff is understanding and educated enough. If we reach a point where we have to convince the staff to let couples avail their service, it’s a clear red flag for us. Our objective is to find hotels that have been accepting couples at the local level. This particular activity minimises a lot of our problems,” he says. Commenting on the challenges encountered initially, Singh says, “In the first year of operations, we had only 35 hotels who agreed to collaborate with us. Currently, we have more than 800 hotels onboard across 20 cities. The notions related to unmarried couples are subsiding now and hotels are reaching out to get listed on our platform.”

While defying norms remained the numero uno reason for hotel aggregators to enter the segment, it was actually the lucrative business this untapped space had to offer that made them stay. Almost all these ventures—StayUncle, LuvStay and BreviStay—were able to break even within a few months of operations, even after being bootstrapped, and have been profitable ever since. StayUncle, for instance, earns $2 million revenue annually at a rate of 3-40%, while BreviStay completed sales worth Rs 3 crore in the last financial year, achieving a monthly topline growth rate of 15%. Delhi-based LuvStay, another hotel aggregator that promises safe, clean and couple-friendly rooms, expects its returns to multiply in the years ahead. “The profits of hotels partnering with us scaled four times, and this progress was enough to facilitate our process of onboarding other hotels. Now, over 50% hotels approach us on their own because of which we expect our top-line growth to grow consistently,” says Karan Mago, co-founder of LuvStay.

Since product differentiation remains at the helm of all profitable businesses, hotel aggregators for couple-friendly stays aren’t any different. StayUncle, for instance, has introduced Love Kits in their partner hotel rooms that seek to enhance customer experience. It is also looking at expanding their horizon to cater to same-sex couples. “We believe that we have fairly solved the problem of heterosexual couples, so we now need to focus on the homosexual couples’ community, which has largely been ignored and under-served. In the next one year, we will focus much more on this segment. For that, we already have 100 hotels onboard,” says Sethi.

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