When planning a trip, the foremost thing people think about is suitable accommodation, with the popular choices being a hotel, a hostel or a homestay. According to the latest trends in the hospitality industry in India, homestays are gaining popularity due to the evolving preferences of travellers. Homestays, which are private residences, are properties designed to provide a unique experience to tourists with personalised services. For property owners, it is an excellent opportunity to earn additional income by starting a homestay business. Homestays are typically located in tourist destinations amidst a picturesque setting.
Those residing in big cities or metros may consider buying a small property in a tourist location and converting it into a homestay. However, before making the move, it is essential to consider the requirements and key aspects. In this article, we will share a few tips that property owners should follow when starting a homestay in India.
What is a homestay in India?
Homestay refers to a private house where the guests share the property with the residents. Typically, homestays are fully furnished with televisions, refrigerators, washing machines, etc. Some of the homestays may provide personalised services, including meals and local transportation.
How to start a homestay in India?
Consider the location
Make sure to take into account different factors before choosing a location. For instance, think about how far from the city you want to invest. Most homestays are located in quieter, private areas. Easy access to the tourist spots in the region will be an advantage. Moreover, it is also wise to consider the regulations in the state. For example, in Tamil Nadu, a homestay is considered a commercial entity and one must pay taxes.
Plan the budget and invest
Cost is a primary factor to consider when planning a homestay business in India. Once you have decided on the location and setup, estimate the cost and expenses you would have to bear. If you already own a property in the location, it is an advantage. However, when starting a homestay business from scratch, invest in a property that is spacious and accessible. You would have to spend money on furnishing the property – the bedrooms, living room, and kitchen. The average spending can range between Rs 4 lakh and Rs 10 lakh, depending on the property size. Business-related costs, such as staffing, maintenance, license fee, etc., should also be considered.
Set up the rooms
Prepare the room for the guests to stay. Make sure to do the necessary repairs, such as getting the house painted, installing electrical fittings, filling the cracks, checking for pests, etc. Provide essential facilities such as bed, cabinets, toiletries, appliances and accessories. You can also beautify the space with plants to enhance its aesthetic appeal.
Apply for the required permissions
Make sure to check the local regulations in the city. Those planning to convert their property into a homestay must get the required permissions from the relevant authority. Registration of these properties with the tourism department is also mandatory. Each state tourism board grants licenses based on a set of standards for basic amenities, room dimensions, safety protocols, etc., of homestays.
Moreover, to get a license, the homestay’s owner must reside there with family. If the property is rented, the landlord must be notified about the sub-leasing, and approval must be obtained.
Further, these establishments are classified into various categories, such as Gold, Silver and Diamond, and have different registration fees. The applicants are also required to provide supporting documents such as inspection report, undertaking from owner on stamp paper, registration fee, etc.
Promote your homestay
The next step is creating an active marketing plan to attract customers to your homestay. Put a word in your circle regarding the availability of homestay. Word-of-mouth marketing is considered an effective method. However, one should also consider other ways to spread the business, such as social media and traditional advertising. Property owners should also consider going online by uploading good pictures of their properties and getting it listed on popular portals.
Create a page on Facebook or other social media platforms. This will help you build your customer base and keep them updated about your property’s availability. Find your property’s unique aspects and highlight them to attract your guests.
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Running a homestay is a profitable investment. The property also requires regular maintenance, which leads to significance expenses. So, make sure to consider all the aspects, including location, budget, facilities, maintenance costs and approvals before starting a homestay business. The regulations may vary from state to state. Thus, it is also important to be aware of the official procedures.
FAQs
Is homestay profitable in India?
With the growing tourism industry and evolving preferences of travellers, homestays are gaining huge popularity and are an excellent choice for property owners to earn additional income.
Is homestay legal in India?
Homestays that meet the specified criteria are authorised to operate in India.
How much does it cost to set up a homestay?
If you already have a property, it would take around Rs 10 lakh to set up the homestay.
Do you get paid for homestay?
Property owners can charge rent from their guests.
Is GST applicable on homestay?
An 18% tax is applicable on the homestay charges.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
