SaffronStays plots rapid inventory increase in India
India: Mumbai-based vacation rental platform SaffronStays is planning to expand its Indian inventory by up to 1,250 rooms within the next two years, having been forced to scale down its operations and let properties go during the height of the pandemic.
Founded in 2016, the company currently operates 500 rooms in high-end, luxury villas and homestays in India, and in Maharashtra in particular, although it is now seeking to expand in Goa, Karnataka, Himachal Pradesh and Uttarakhand.
The expansion will be funded by internal existing funds, after securing ₹19 crore in pre-Series A funding from venture capital firm Sixth Sense Ventures three years ago, but it will also consider raising another round within the next two or three years to facilitate further growth.
The five-year-old business has 500 rooms in the upscale and high-end villas and homestays on its platform across India as of now. The company had rapidly scaled up its business within Maharashtra in the last year and a half.
SaffronStays founder Devendra Parulekar told Mint: “We touched 1,000 rooms and we consciously came down to almost 150-200 rooms only in 2020. Today we are back to about 500 rooms. We wanted to fix our quality and focused on Maharashtra only.”
Achin Khanna, managing partner, strategic advisory at hospitality consultancy Hotelivate, told the same publication: “The hygiene-sensitive demographic is also loving this alternative. While there is enough and more opportunity for hotels and resorts to continue offering their services to the leisure demand, we do believe that the homestay business model shall meaningfully continue to evolve and grow in months and years ahead.”
Operating two distinct business models, SaffronStays uses both property management contracts and lease contracts; the latter where the company leases the property out for a period of five years and runs it.
However, in a new development, SaffronStays is piloting a new technology project where it will onboard homeowners who have not necessarily given the brand management rights or leases. The owners will be able to list on the platform and the company will take a commission for each booking, but not be involving with the day-to-day operations of the properties themselves.
In 2019, prior to the Covid-19 pandemic, Parulekar revealed that SaffronStays was targeting expansion into destinations such as Bali, Sri Lanka, Dubai and London.