02/08/2016 8:28 PM IST | Updated 02/08/2016 9:20 PM IST

Why It's An Ideal Time To Cash In On The Homestay Travel Trend

Homestays promise travellers informal, affordable accommodation yet rich in local flavours

Gary John Norman

Homestays are fast emerging as the trendiest thing for travellers. Their popularity is riding on the increasing demand from tourists looking for an informal, yet relaxing experience, bringing accommodation options in even remote parts of the country that were earlier out of reach of conventional hotels.

But aside from just trying out this unique travel experience that promises rich local flavour, homestays can also provide an alternative investment to people keen on an extra source of income. Here's why it might be an ideal time to turn your home into a homestay:

Growing demand

India has an estimated shortage of about two lakh hotel rooms. A majority of small hotel accommodations are rundown roadside lodges and motels, and only a fraction are listed as homestays. According to the government, India will need an additional 2.5 million rooms across the hospitality industry to meet the increasing demand by 2020.

Additionally, Indian government has recently expanded its e-visa facilities to over 150 countries, meaning the number of foreign tourists into India is only set to increase further. India is expected to further relax the rules on multiple entry and business visas as well, in a bid to boost services exports.

Relaxed Licensing Rules

The Indian government plans to make it easier to convert properties into certified homestays. It's developing a centralised database, working with online aggregators and state governments to list homestay properties and introduce ratings, guest houses and bed-and-breakfast places. Online aggregators such as Airbnb and Stayzilla will be able to use the database, making it easier for tourists to find such accommodation.

Currently, homestays need a license by a regional classification committee, including the central and state government officials as well as travel sector professionals. These licences are valid for two years and have to be renewed every couple of years.

Possible tax savings

The government is also urging state governments to exempt homestays from service tax and levies such as electricity, water charges and commercial property taxes, a senior tourism ministry official recently told the Telegraph. "The entire process of certifying these homestays should also be hassle-free and online and completed within 15 days of application," the official said.

Publicity and marketing

The government has asked states to provide land for homestays at cheaper rates, publicise the benefits of homestays over conventional hotels. Another avenue is tying up with aggregators such as AirBnB and Stayzilla. Stayzilla, for instance, generates the majority of its income from homestay listings. Out of 55,000 listed properties in July, about 15,000 were alternate stays including homestays, Yogendra Vasupal, CEO and founder of Stayzilla told the Hindu.

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