Covid-19 impact: Himachal Pradesh's thriving homestay industry hits hotels

The Covid-19 pandemic may have crushed the hospitality industry worldwide. But the halt in international travel has been a blessing in disguise for hospitality in Himachal Pradesh. More specifically, homestays have thrived September onwards even as hotels are barely staying afloat. 

Their fates are contrasting — hoteliers say they are struggling to get bookings, while homestay owners are witnessing record bookings and profits.

Rajni Katoch, owner of Camp Bir Billing resorts in Kangra, says, “We haven’t been able to revive our business. It’s been a year.” Sanjay Sood, president of the Shimla Hoteliers Association, adds that profits are dipping and bookings are far less compared to earlier. “Homestays have ruined our business.”

It is apparent that homestays have snatched away bookings from hotels.

Sandeep Verma, who owns Grande Vista in Theog, 30 km from Shimla town, built the homestay in October 2019. “Post-lockdown, I have had full occupancy of 120 rooms on most months. We attract tourists because our occupancy charges are low, and we provide a genuine experience of living in the mountains,” he says.

Highland Homestay owner Sohan Thakur says that besides hygienic interiors, a slice of hill life including sights and sounds of animals around is what homestays promise.

His four-room homestay in Cheog, 19 km from Shimla, has of late had tourists who earlier stayed at a nearby Taj property, he says.

Some also follow a flexi-fare system. After summer, the occupancy charges dip in the monsoon months and then go up during winter. Ratish Chauhan, owner of Whispering Pines near Kasauli, says, “I have 80-90 per cent occupancy mostly during the peak season (between April and mid-July). This goes down to 60 per cent in August-September and then it picks up again in winter.”

Given the profits, the number of homestays registered with the state tourism department in Himachal is expected to double in another two years. Many small hotels will be forced to convert into homestays.

According to the tourism department, there are 3,679 hotels and 2,305 homestays in the state. But this is changing fast, with nearly 1,000 homestays already under construction.

Tourism department director Yunus Khan attributes the success of homestays to domestic charges of electricity and water. He says the number of homestays could soon surpass that of hotels. Also, homestay owners do not have to pay GST, resulting in a trickle-down effect on customers as well.

Many super-luxury homestays are also a direct competition to five-star facilities.

Sanjay Austa, a former journalist, owns two such homestays — one at Shimla, and another at Ratnari, about 80 km from the capital — called Meena Bagh Homes.

Austa charges Rs 29,000 a day for an entire bungalow. Guests can choose vegetables from an adjoining organic farm. “Post-lockdown, we have been able to attract tourists and offer them almost everything they want — exotic location, tastefully done rooms and good ambience,” he says. A prospective client has to get an RT-PCR test to show she is Covid-negative. But that hasn’t stopped visitors from pouring in.

However, homestays are not free of criticism.

Anup Thakur, president of Manali Hotel Association, says homestays came into being in order to augment rural tourism.

“Homestay means that the owner has to be ever-present. But people are building hotel-like facilities calling them homestays, staying elsewhere and remote operating the facilities. This goes against the original concept,” he says and adds that a hotelier has to get multiple licences before starting operations but homestay owners are exempt from such rules.