IDEA

An online marketplace for hosts and guests who want to rent rooms or properties. The idea
changed the way people travel. People can now rent cheap well-furnished accommodation, for a
short period of time, well situated, and hosted by an individual. A different idea how the Internet
and the sharing economy have revolutionized the hotel industry.

Based on the concept of shared economy.

• Enables owners to list their space on the platform and earn rental money.

• Provides insurance to listed properties.

• Gives cheap options to travelers to stay with local hosts.

• Facilitates the process of booking living space for travelers.

• Rating and review system for hosts and guests.

The 2 customer segments defining Business Model

Host:

• Hosts are the people who own property and want to make some money by renting out
their available space.

• They can create a listing for their property, add property details and set their own rent,
check-in, check-out time etc.

• Hosts can accept or reject a booking after reading the reviews of the traveler or after
going through his social profiles.

Travelers:

• Travelers are the people who book the listed available spaces from local hosts.

• Travelers have the option to search for a property by filtering them according to rent,
amenities provided, location etc.

• Travelers can book a space by paying through the online portal.

MARKET ANALYSIS

Secondary Research
India is a large market for travel and tourism. It offers a diverse portfolio of niche tourism
products - cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and
religious tourism. India has been recognized as a destination for spiritual tourism for domestic
and international tourists.
Total contribution by travel and tourism sector to India’s GDP is expected to increase from US$
136.3 billion in 2015 to US$ 275.2 billion in 2025. Travel and tourism is the third largest foreign
exchange earner for India. A sum of US$ 1.76 billion was earned under foreign exchange
through tourism during the month of September 2016.
The launch of several branding and marketing initiatives by the Government of India such as
Incredible India! and Athiti Devo Bhava have provided a focused impetus to growth. The Indian
government has also released a fresh category of visa - the medical visa or M visa, to encourage
medical tourism in the country.
The Government has also been making serious efforts to boost investments in tourism sector. In
the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-
year tax holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO
World Heritage sites (except Delhi and Mumbai). The investment in tourism sector is expected
to be US$ 12.4 billion in the 12th Five Year Plan; of these, private investments are likely to total
US$ 9.2 billion.
Source: https://www.ibef.org/industry/tourism-hospitality-india.aspx

India Tourism and Hospitality Industry:

The Indian tourism and hospitality industry has emerged as one of the key drivers of growth
among the services sector in India. Tourism in India has significant potential considering the rich
cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread
across the country. Tourism is also a potentially large employment generator besides being a
significant source of foreign exchange for the country.

Market Size
India’s rising middle class and increasing disposable incomes has continued to support the
growth of domestic and outbound tourism.
Domestic Tourist Visits (DTVs) to the States/Union Territories (UTs) grew by 15.5 per cent y-o-
y to 1.65 billion (provisional) during 2016 with the top 10 States/UTs contributing about 84.2 per
cent to the total number of DTVs, as per Ministry of Tourism.
As per Ministry of Tourism, foreign tourist arrivals (FTAs) in India increased 19.5 per cent year-
on-year to 630,000 in May 2017. FTAs on e-tourist visa increased 55.3 per cent year-on-year to
68,000 in May 2017.
India's foreign exchange earnings (FEEs) through tourism increased by 32 per cent year-on-year
to reach US$ 2.278 billion in April 2017, as per data from Ministry of Tourism, Government of
India.
India is expected to move up five spots to be ranked among the top five business travel market
globally by 2030, as business travel spending in the country is expected to treble until 2030 from
US$ 30 billion in 2015. #
International hotel chains will likely increase their expansion and investment plans in India, and
are expected to account for 50 per cent share in the Indian hospitality industry by 2022, from the
current 44 per cent.*
Investments
The tourism and hospitality sector is among the top 10 sectors in India to attract the highest
Foreign Direct Investment (FDI). During the period April 2000-March 2017, the hotel and
tourism sector attracted around US$ 10.14 billion of FDI, according to the data released by
Department of Industrial Policy and Promotion (DIPP).
With the rise in the number of global tourists and realising India’s potential, many companies
have invested in the tourism and hospitality sector. Some of the recent investments in this sector
are as follows:

 MakeMyTrip raised US$ 330 million from Ctrip.com International Ltd, Naspers Ltd and
few undisclosed investors, in a bid to withstand competition in the ticketing segment.
 MakeMyTrip has agreed to buy Ibibo Group’s India travel business at a deal value of
US$ 720 million, thus creating India’s largest online travel firm with a value of US$ 1.8
billion, as estimated by Morgan Stanley.
 Yellow Tie Hospitality Management Llp, specialising in franchise management of food
and beverages firms, plans to invest up to US$ 15-20 million in five restaurant ventures
of celebrity chef Mr Harpal Singh Sokhi, with the aim to have 250 outlets under these
brands by 2020.
 Chaudhary Group (CG) Hotels & Resorts aims to have 200 hotels operational by 2020.
 DineEquity Incorporation has signed a franchisee partnership deal with food services
firm Kwal’s Group, in order to enter the Indian markets with their breakfast chain IHOP.
 As per industry experts, mid-hotel segment in India is expected to receive investments of
Rs 6,600 crore (US$ 990 million) excluding land over next five years, with major hotel
chains like Mariott, Carlson Rezidor and ITC planning to set up upscale, budget hotels in
state capitals and tier-II cities.
 Hyatt Hotels Corporation has outlined plans of bringing its Hyatt Centric brand to India
soon along with three new hotels in Kochi, Rameswaram and Hyderabad by 2017.
 Vatika Hotels Pvt Ltd has raised Rs 495 crore (US$ 74.25 million) in debt from Axis
Bank Ltd to expand its hotels and quick-service restaurant chain besides its business
centres.
  AccorHotels, a French multinational hotel group, plans to expand its footprint in
Guwahati and Kolkata by adding more 550 rooms to its portfolio of hotels in the next
three years.

Road Ahead
India’s travel and tourism industry has huge growth potential. The tourism industry is also
looking forward to the expansion of E-visa scheme which is expected to double the tourist inflow
to India. JW Marriott plans to have 175-200 hotels in India over the next four years.
Accor Hotels India has adopted a ‘born in France, made in India’ approach to increase its
properties in India, which has reached a total of 45 hotels and is expected to increase to 55 hotels
by 2017.
Exchange Rate Used: INR 1 = US$ 0.0155 as of April 17, 2017.

Government Initiatives
The Indian government has realized the country’s potential in the tourism industry and has taken
several steps to make India a global tourism hub.
In the Union Budget 2017-18, the Government of India announced some initiatives to give a
boost to the tourism and hospitality sector such as setting up of five special tourism zones,
special pilgrimage or tourism trains and worldwide launch of Incredible India campaign among
others.
Some of the major initiatives taken by the Government of India to give a boost to the tourism and
hospitality sector of India are as follows:

 The Ministry of Environment, Forest and Climate Change, Government of India, is

planning to revise India's coastal regulation norms aimed at opening up the 7,500 km
long coastline for developmental activities like tourism and real estate.
 The Central Government has taken a number of steps for smooth transitioning to cashless
mode of payment to ensure that no hardship is faced by the tourists and the tourism
industry remains unaffected from government's demonetisation move.
  Maharashtra Tourism Development Corporation (MTDC) has come up with a unique
tourism experience of visiting the open cast coal mine of Gondegaon and underground
coal mine of Saoner, which are near Nagpur and part of Western Coalfields Limited.
 A Tripartite Memorandum of Understanding (MoU) was signed among the Indian
Ministry of Tourism, National Projects Construction Corporation (NPCC), National
Buildings Construction Corporation (NBCC) and Government of Jammu and Kashmir for
the implementation of tourism projects in Jammu and Kashmir.

Competition

1. Tripadvisor
2. Airbnb
3. Expedia
4. Booking.com
5. Stayzilla
Rating of Factors
Average rating by Our Composite
S.No Factors Reasons
industry experts rating Score
For office and for
Financial
1
Resources
5 3.5 17.5 online management
team
2 Technology 3.5 3 10.5 Only system required

Competitors Less no. of players in

3 3.5 4 14 house rental service
Skilled people required
Human
4
Resources
5 4 20 for maintaining the
website and database
Offering cheap
5 Economical 4.5 5 22.5 accommodation

6 Political 4 3.5 14 National laws

Several type of laws
and regulations, taxes,
7 Legal 4.5 5 22.5 safety and health
standards
Facilitate
communications and
8 Social 2.5 3 7.5 create relationship with
people
9 Cultural 2.5 3 7.5 Exchange of culture

Online and Offline

11 Media 3 5 15 promotion required
Only and most
12 Location 5 5 25 important

176
Market Analysis:

Market Description:

 Location:
 Online accommodation sharing service.
Financial:

 Project Cost:
 Initial Cost:
 Borrowed Capital:
 Own Capital:

Particulars One Time Cost Cost/Month

Rent
Website Development
Tax (GST)
Employees

Segmentation:

The business targeted their service to not just customers, but to the suppliers as well. Divided into two
market segmentations.

Demographic Segmentation Gender: Male & Female

Age:18-45
Middle class and Upper middle class
Behavioral Segmentation Hosts:
Travelers:

Target:

To sum up both- hosts and guests need each other in order to follow the marketing concept.

Positioning:

From a host perspective:

 Making money: People get the opportunity to increase their income when renting out their rooms.
By renting a place per night, the monthly average price is two or even three times more of what
the rent actually costs.
 Competition winner: There is not so much competition out there. It should rely on feedback from
users.

From a guest perspective:

 Variety of prices: With a low from high price option in the website, guest get to choose their
favorite match in a wide range of costs.
 Variety of places:
MARKETING PLAN

Business’s Macro environment

1. Political and Legal Trouble:

Home rented apartments are viewed as “illegal hotels” (in some places/country).
This would be mainly because rented apartment owners do not have to pay taxes.
And because of the safety and health standards in rented accommodation.
2. The Economic Factor:
People globally tend to spent less on their money on travel. Regarding the
hospitality industry, they would rather look for cheaper accommodation. By
offering cheap rents, the idea is offering an alternative solution to people and
businesses.
3. Sociological Factor:
The rise of online social network has had a strong impact on people’s lives.
Nowadays, online platforms enable us to exchange information and communicate
with each other more easily. We can share are ideas and past experiences.
4. Technological Factor:
The innovation of electronic devises enables the firm to create a new version of
the platform on Smartphone’s and tablets, which gives access to the service for
its users.

Microenvironment

1. Bargaining Power of Suppliers

Suppliers are those who set the rent’s price on the platform (website), they are constantly
confronted by other competitors in the market. Therefore, their price setting power is quite weak
as they have to adapt their price to that of the market.
2. Bargaining Power of Customer:
Consumer’s power is very strong because the success and the reputation of the company depends
mainly on them. Price, location and quality of the service will be the three main factors that will
determine their satisfaction and any negative reviews will strongly impact the image of the brand.
3. Barriers to entry:
It is quite difficult for a start-up to enter a rent sharing market where there already exists a big
leader like Airbnb.
4. Competitors: