7 Smart Tips To Start A Profitable Homestay Business In India

Last updated 9 Feb 2023 . 1 min read

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Many travellers nowadays prefer homestays to hotels to get a feel of the local culture. It also gives them a feeling of being at home away from home. Hence, the homestay business model is being looked upon as an emerging area of business. Let us know more about what is a homestay business and how you can build your home-based venture.

A homestay business model involves renting out a room or portion of your home to travellers to offer them a unique and personal experience of your local community. In addition to providing a comfortable place to stay, homestays can also serve as a source of additional income. Whether you're a retiree looking to supplement your retirement income or a stay-at-home parent looking for a flexible way to earn extra money, a homestay business can be a great way to achieve your financial goals. 

Homestays also serve as an opportunity to meet new people worldwide and create new lifelong friendships. With the rise of travel and tourism, the demand for homestays has increased, making it an ideal business idea for you to earn from. 

However, starting a homestay business can come with some challenges. Like any other business idea, it requires writing your business plan after research and preparation to ensure the success of your venture. From determining the right pricing strategy to establishing a strong online presence and providing excellent customer service, there are many factors to consider when starting a homestay business.

By implementing the following strategies, you can become a successful entrepreneur and launch a profitable homestay business by offering travellers a homely atmosphere. 

Step 1: Determine The Requirement Of A Homestay Business In Your Area

Before you begin working on this fantastic idea, research the homestay market in your area to understand if there is a demand for this type of accommodation. Some of the factors to be considered in research can be the local economy, the number of tourists visiting the area, and the competition in the market. Reading about the local laws and regulations regarding homestays will help you make your homestay all law-proof!

You can conduct market research by asking questions to potential customers, industry professionals, and the local tourism board, and researching the homestay market online. This will give you a good idea of the demand for homestays in your area, as well as the prices charged by your to-be competitors. The data from these exercises will help build a homestay business proposal that can be beneficial in years to come.

Step 2: Identify Your Niche and Target Market

Every business idea needs a business plan. Your homestay business plan is a route you will walk on. Once your market conditions seem favourable for a homestay business, your next task is to identify your niche and target customers. 

Consider what sets your homestay apart from others in the area. There can be many points like your location, the type of room you offer or the services you provide. 

Identifying your niche will make things clear in respect of which type of travellers your homestay can attract and the marketing strategies you can use to reach them. For example, if you live in a popular tourist destination, your target market may be tourists looking for affordable and unique accommodation options. 

On the other hand, if you live in a rural area, your target market may be nature enthusiasts and outdoor adventure seekers. By understanding your target market, you can tailor your homestay offerings and marketing strategies to best meet their needs.

Step 3: Prepare Your Home for Guests

After identifying your target market, you must prepare your home for guests. This may include creating a private room for guests, upgrading your bathroom and kitchen facilities, and purchasing the necessary furniture and amenities. For the safety and comfort of your guests, you can install smoke detectors and ensure that your home is secure.

To make your homestay more appealing to guests, consider adding special touches such as fresh flowers, a welcoming basket with snacks and toiletries, and a pamphlet filled with information about your local area. These small details can make a big difference in creating a memorable and enjoyable guest experience.

Step 4: Develop Your Marketing Strategy

Any business cannot function without marketing and exist without appropriate marketing strategies. Your marketing strategy will be crucial to the success of your homestay business. How you promote your homestay business talks a lot about how successful your homestay business idea and execution is. 

To begin with, you can consider listing your services on online platforms to reach a large audience. You can also create a website for your homestay and use social media to promote your business. Utilising local tourism boards, travel agencies, and hotels as referral sources can also be an effective marketing strategy.

When developing your marketing strategy, using eye-catching and memorable visuals to showcase your homestay can be effective. You can put up photographs of your home, the offered room, the surrounding area, as well as videos that give potential guests a virtual tour of your homestay. In addition, consider offering special promotions and discounts to attract guests and create buzz about your business.

Step 5: Decide Your Pricing Strategy

Once you have understood your customer market, it becomes easier to move to fix the homestay services' price. Picking the right pricing strategy becomes essential in building your homestay business. 

First, jot down the cost of running your business, including preparing your home for guests, marketing expenses, and other relevant costs. You should also research the prices of similar homestays in your area and set competitive prices.

Your homestay can offer different pricing options for different times of the year, such as higher prices during peak tourist season and lower prices during off-peak season. Offering discounts to loyal customers, customers staying longer, or who have booked a certain number of nights is another marketing strategy you can use. The more you understand what your customer wants, the easier it becomes for you to promote your business.

Step 6: Establish and Maintain a Strong Online Presence

In the world of digital media, digital marketing has made itself prominent in building any kind of business. A strong online presence is crucial to the success of your homestay business. Some ways you can build an online presence are:

     - Encourage guests to leave online reviews on your website and social media. Respond to all positive and negative reviews in a professional and courteous manner.

    - Regularly update your website with new content and information about your local area.

    - Offer incentives for guests who share their experience on social media, such as discounts on future stays.

Small ways like these go a long way in reaching out to people in different parts of the world. To learn more about digital marketing, you can also enrol in online courses. Thus, your homestay’s online presence will attract more customers in the long run.

Step 7: Provide Excellent Customer Service

Finally, providing excellent customer service is key to the success of your homestay business. Be available to answer any questions your customer has and respond to their inquiries in a prompt manner. In addition to your homestay services, take a step ahead and offer guests local recommendations, maps, and information about the area.

Going the extra mile to ensure guests have a memorable and enjoyable stay can significantly attract repeat business and positive online reviews. How your customers feel staying in your homestay is a memory they would keep telling about others. Thus, your customers are not only customers, but they are also your homestay promoters. 

In conclusion, starting a homestay business can be a rewarding and fulfilling experience that offers an opportunity to meet new people and earn income. Put in your hard work, determination, and commitment to providing quality service to make your homestay business a thriving success. 

Also, do not forget to let us experience your homestay once you use the above tips and tricks to build one! 


The Glow Lovely Career Community on SHEROES offers chat consultations with career experts who help you grow professionally. Get on board with a career guidance expert by joining the Glow And Lovely Career Community on the SHEROES App, and use our expert advice to improve your business skills today!


Anuradha Sangeeta Parmar
Anuradha Parmar is a Company Secretary by profession, switching completely towards her love of writing. She is always up for music, mountains, and creativity.

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