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Vikram and Bhawna Atwal
Tej’s Abode, GK II, Delhi We thought it made sense to go the B&B way. We live in a huge old house, so the fittings had to be changed, wiring redone, the bathrooms rebuilt, supplies bought...The total investment was around Rs 8-9 lakh. Occupancy has been 50-55% but we are seeing the inflow grow by 10% every month. |
There are hotels and there are hotels, but there’s really no place like home, is there? Especially if you are the kind that travels frequently or if you want the comfort of home wherever you holiday. The concept of homestays has caught on, not just in places of tourist interest but also in big cities where there’s a high floating population of regular business travellers.The difference between a bed-and-breakfast (B&B) and a homestay is very, very thin. In India it is used interchangeably.
Theoretically, a B&B offers just that—a bed for the night and breakfast the next morning. No frills, no perks, no fancy prices. In other countries, B&Bs are favoured by back-packers, trekkers, students and other holiday-makers on a shoestring budget.
In India, however, B&Bs have gone upmarket. In a typical B&B in Delhi, for instance, you get an air-conditioned room with attached bathroom, cable TV, breakfast, Internet access, free local phone calls and much more. For all this, you pay almost what you’d pay a three-star hotel or less.
The difference is that you are probably getting five-star facilities. Homestay options in tourist destinations are even more luxurious, and offer sightseeing facilities and transport options, as well as all meals and snacks thrown in.Homestays also have a cost advantage, albeit a small one, over hotels. For instance, if you were in Delhi’s Greater Kailash neighbourhood, you would pay about Rs 3,400 for a double room at the Solo Victoria, a business hotel.
For around the same price, you can get a room at Tej’s Abode, a View Your Lodging B&B, where you get near five-star comforts. Says Vikram Atwal, owner of this Ministry of Tourism approved B&B: “We are above the three-star bracket but our rates are much cheaper.”
The earnings |
Average earning from letting out a room is Rs 2,500 a day, assuming realisation post-maintenance and other over-heads is Rs 2,000 a day from this room. If you spend Rs 1 lakh on doing up a room, you need 50 nights of occupancy to recover the initial cost. If you do up two rooms at Rs 1.5 lakh, you need 75 nights of occupancy to recover costs Anything over this is profit |
The other advantage is less tangible. There’s the comfort of staying at home as opposed to an impersonal hotel. Plus, you get home-cooked food, and don’t have to worry about security of your self or belongings. Tej’s Abode has an enviable guest list, including Ulric Haynes, former US Ambassador to Algeria.
“Usually when I visit India, I always stay at five-star hotels such as the Taj or the Imperial as I enjoy the services.
However, on my recent visit, I have stumbled upon a hidden treasure—a new boutique bed-andbreakfast option. Located in a posh residential neighbourhood, it provides almost the same services as a five-star hotel, yet in a home environment,” he wrote at the B&B’s guestbook earlier this year.
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Mohinder Kaur & Didar Singh Chaudhri
Defence Colony, Delhi We spent about Rs 1 lakh to remodel our house to suit the B&B requirement and registered under the Silver category in late 2006. In the past 10 months we have had a mixed outcome; but something that we both are enjoying. The B&B helps us manage the monthly maintenance costs that we incur on our house. |
Easy money. It’s not just good news for travellers. Home owners are delighted to be able to make some money from unused space.
After all, can you think of a better deal than a job that isn’t nine-to-five, where you are the boss and you don’t even have to step out of your home? Given the demand for room in large cities, state governments are promoting the B&B concept.
The Delhi government has passed an ordinance exempting B&B establishments in the entire National Capital Region from luxury tax and valueadded tax. Although few other states have followed suit, B&B owners are not really complaining.
Sensing the potential of this concept, the Directorate General, Resettlement, Ministry of Defence, started the Kerala Veterans Homestays chain last year. Says Major-General Harwant Krishnan, the former head of DGR, who launched the chain: “We did not have to try hard to find takers.
All we said was ‘you’ve retired, and your nest is empty. Instead of going out to look for a second career, why not opt for a home-based occupation? Or your wife or daughter could do with some extra cash’.”
It’s neither expensive nor timeconsuming to get an accreditation certificate from the Ministry of Tourism. House owners interested in the scheme have to register with Indian Association of Tour Operators (IATO). “It’s a fairly simple and painless process—with no palm-greasing involved. But I reckon that this is because the government is so aggressive on it. Once the matter shifts to the hands of the local bodies, things may get more tedious,” says Atwal.
The B&B can be as flexible as you want; you can not only decide how many months you want to be open to guests, but also what profile of people you would like to welcome.
Bed-time secrets |
| Now that you’ve planned a shoe-string budget holiday, look for some B&B options where you can experience the local hospitality and cuisine at affordable rates |
| A complete list of B&Bs certified by the Ministry of Tourism is available at www.incredibleindia.org, although the list is limited to the NCR at the moment |
| www.jaipurpride.com is a branded homestay programme, promoted by the Clarks Group of Hotels. This will shortly be spreading to Mumbai, Delhi and Bengaluru |
| If you’re heading to the Himalayas, there’s a range of homestays in almost every region, from Ladakh to Sikkim. Log on to www.himalayan-homestays.com for details |
| Down south is a chain of B&B’s endorsed by the Ministry of Defence www.keralaveteranshomestay.com |
| For a handy guide to B&B options across the country, check out www.bharathomestay.com |
Most important is the money you make. Apart from the room rent, there are charges for additional meals and optional services. Transport, access to the neighbourhood golf course and sightseeing can all keep the cash tills ringing. You can even have an understanding with the local taxi company—you direct all your guests requiring cabs to that company in exchange for a small cut...the possibilities are endless.
Says Major Prasannan, who runs Pratishtha Homestay in Ernakulam: “The basic infrastructure was already there. I only had to do up three rooms and invest in items like TV sets, mini-fridges and safes for each room. My operating costs are zero; food and laundry are the only additional costs I incur when there are guests.”
Furthermore, the existing house staff can be used to man the B&B operations so there is no additional expense incurred. Little wonder then that Atwal confidently says: “There are big profits to be made—in the next five years, this B&B will become a major cash cow. As of now, for every Rs 100 charged, our operational profit is about Rs 40-45. But we will get more accurate figures only after one year.”
There’s also a strong potential for future earnings, especially in and around Delhi, which will host the 2010 Commonwealth Games.
That’s why most players are concentrating on expansion. Says Krishnan: “We launched in May 2006 and by February 2007, 105 families had registered with us. I won’t say it is a roaring success— that will take time—but we are already expanding. By early next year, we are planning to open around 50-60 B&Bs in Delhi, Rajasthan, Himachal Pradesh and Uttarakhand.”
The B&B business plan |
| The Ministry of Tourism has laid out guidelines for approval and registration of B&B establishments. There are two categories of registration—silver and gold. The following apply to both: |
- You can only let out five rooms (or 10 beds) as a B&B
- Guest rooms must have good quality carpets or tiles or marble flooring, furniture and fittings. They should have comfortable beds with good quality bedding, and en suite bathrooms with toiletries
- The rooms must have 24-hour power and water, television and telephone connections
- In many cases, car parking facilities must be provided
- Security must be maintained, both of the house and the guest rooms
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It’s not all wine and roses, however. Says Prasannan: “Advertising is a problem; people are not aware of homestay options.” A good website is a must since that’s usually the first source of information. That is why he has invested in a professionally done website, over and above the free listing on the Kerala Veterans Homestay website.
Then, there’s the tried and tested word-of-mouth route. “Suddenly we realised everybody on our phone list is somebody who could be looking for a room on their next Delhi visit,” says Atwal, adding, “We also bank on recommendations of those who have stayed with us. We have had more guests coming in by wordof-mouth than those who have found us on the Internet.”
Opening a homestay is a great way to earn additional income, but cannot replace a regular income. “This is not a get-instant-returns-onyour-investment proposition; breaking even will take time,” warns Prasannan, adding, “It’s a great source of supplementary income, but it can’t be your bread and butter.” Factor all this in, and you can be sure of opening your doors to more guests and more cash. In the worst case scenario, even if you don’t have any takers, your own home gets done up so the investment in the B&B is not really wasted.
