Treebo Hotels plans expansion and looks to enter homestay market

Ruptub Solutions, which owns and operates budget hotel chain Treebo Hotels, is planning to enter homestay business as it seeks to tap the nascent but fast-expanding non-hotel accommodation, a popular option among new-generation travellers. 

The Bengaluru-based company will initiate a pilot for the same by the end of this year, said Siddharth Gupta, co-founder of Treebo. 

Encouraged by the potential in the budget hotel segment, the app-based hotel aggregator is also preparing to set its foot in “India-like” markets in a bid to scale up its business and have a diversified customer base, said Gupta. The plans, however, will come to fruition only after the firm achieves the target in its home market. 

Treebo plans to double the number of hotels registered on its platform to 800 by 2019 from the current 400. “The segment (homestay) has the potential to become large and exciting over the next two to three years. It’s very big in the markets outside India,” said Gupta, pointing out with India’s travel and accommodation market getting more professionalised with the technology, homestays are a natural progression in line with the global trend. The trend in India, however, may not be as linear as other markets and it may “leapfrog” a few stages. 

Treebo will not be the first budget hotel chain to enter the homestay segment. Online hotel aggregator OYO, which initiated listing houses under Oyo Homes in 2016, has close to 2,000 homes in leisure destinations. Travel portals such as makemytrip.com and yatra.com have been listing homestays on their sites, too.

Alternative stays or non-hotel accommodations, a concept pioneered in India by San Francisco-based Airbnb, constitute a small portion of the entire Indian hospitality market, but it may touch $3 billion by 2020, according to a July 2017 report by Boston Consulting Group and Google. 

Gupta said hotels would continue to be Treebo's core focus area and homestays would become large over a period of time. “We will launch some pilots by year-end.  Like our hotels, the homestays, too, would be based on the premise of quality,” he said.

Buoyed by the potential of budget hotels in emerging markets, Treebo is studying markets such as South Asia, South East Asia, Eastern Europe, Latin America, and Africa for an entry. This however, will be on the back burner till the firm strengthens its hold in the domestic market. 

Gupta expects this channel to account for 5 per cent of its total sales in a day. Treebo books about 8,000 to 10,000 room nights per day. Ruptub Solutions raised $34 million in fresh round of funding in August 2017. It doesn't plan to go for another round of funding as it is fully capitalised, said Gupta.

 

In the offing

• Treebo to initiate pilot for homestay business by the year end 
• It will compete with Oyo Home and Airbnb 
• The three-year old company exploring markets outside India 
• The firm expects newly launched Hero app to account for 5 per cent of bookings