HVS India – Alternative Accommodation – Threat or Opportunity for the Indian Hospitality Sector? By Mandeep S Lamba and Dipti Mohan


Threat or alternative accommodation opportunity for the Indian hotel sector?

Post-COVID, traveler interest in alternative accommodation products such as homestays and villa rentals has increased, intensifying competition between hotels and alternative accommodations. Keep reading to learn more.


HVS;

The pandemic has accelerated the growth of the alternative accommodation segment, which is disrupting the Indian hospitality sector. Tired of being cooped up at home for months, several domestic leisure travelers have taken road trips to motorized destinations, preferring to stay in vacation rentals, villas or homestays rather than hotels for their first vacation after the pandemic, as they offered more privacy and a private bio-bubble.

Even after all travel restrictions were lifted, many people still preferred alternative accommodation to hotels because it offered them the best of both worlds – the privacy, security, flexibility, personalization and convenience of private accommodation combined with the pleasures and comfort of a hotel, especially for those traveling in small groups or with families and pets. These ever-changing preferences have fueled the growth of alternative accommodation in India over the past couple of years. Additionally, with the advent of the “work from anywhere” environment, alternative accommodations in motorized destinations offering long-stay packages have been able to capture the share of traditional hotel clientele, thereby intensifying the competition between hotels and alternative accommodation. This has encouraged hoteliers to drive change and innovation to up their game by incorporating certain aspects of alternative accommodation that appeal to customers, such as an authentic local experience, highly personalized services and privacy.

Aware that alternative accommodation is not a passing fad but that it is here to stay, new players, including hotel brands, are entering this segment which is still very disorganized in India, with very few branded hotels. IHCL, for example, launched the amã Stays & Trails brand to foray into the country’s growing homestay market; and over the past two years, has grown its portfolio in this segment to 80 properties in 40 destinations. Likewise, major international hotel companies have already branched out into the vacation rental space globally and it is only a matter of time before they do so in India as well. However, the industry has only scratched the tip of the iceberg as the potential is huge – from bed and breakfasts, homestays, villa rentals and hostels to caravans and houseboats, among so many more – this segment has so much more to offer travelers and can help India’s travel industry reach greater heights.

Alternative accommodations can create a new revenue stream for hotel chains, helping them attract new-age travelers looking for unique, highly personalized and authentic travel experiences. Additionally, it provides them with a financially attractive investment model, particularly for expansion into underserved leisure destinations, due to lower overhead and higher profitability than a hotel, which will help also to the holistic development and growth of the destination itself.

Mandeep S.Lamba, President – ​​South Asia, oversees the HVS practice in South Asia. Mandeep has spent over 30 years in the hospitality industry having worked with international hotel companies such as Choice Hotels, IHG and Radisson Hotels before becoming President of ITC Fortune Hotels in 2001. After successfully building the Fortune brand in medium-sized hotel sector in India, Mandeep ventured on an entrepreneurial journey for over 8 years, establishing JV companies with Dawnay Day Group UK and Onyx Hospitality Thailand before joining JLL in 2014, as Managing Director, Hotels & Hospitality Group – South Asia. A recognized industry leader, Mandeep has won several awards and accolades for his accomplishments. Recently, it was featured in the Hotelier India Power List of India’s Most Respected Hoteliers for the second consecutive year. Contact Mandeep at +91 981 1306 161 or [email protected]

Dipti Mohan, Senior Manager – Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in creating research-based content. She has authored several “point of view” papers such as thought leadership reports, expert opinion pieces, white papers, and research reports. Contact Dipti at [email protected]

Christina A. Kroll