We’re excited to announce our follow-on investment in StayVista, India’s largest vacation rental brand. StayVista has emerged as the market leader in the segment with 400+ holiday homes across major holiday destinations in the country. Their success can be attributed to the founding team’s strong execution skills and their unwavering commitment to customer delight.

We first invested in StayVista in 2019. Then COVID-19 hit and changed everything we had underwritten in our original investment thesis. Since then, we’ve witnessed the founding team’s extraordinary resilience and grit as they navigated through the toughest period in the hospitality industry. Despite the unpredictable external environment, the team delivered record revenue growth in a capital-efficient manner.

We believe that vacation rentals are a core component in the future of hospitality and will account for a significant share of the hospitality sector. The way Indians vacation is rapidly evolving. Several factors such as the preference for experiential stays in lieu of traditional ‘cookie cutter’ hotels, the desire for intimate setups for family gatherings, the rise of ‘workcations’, ‘escaping’ into nature, and the growing use of social media for discovery are driving the adoption of vacation rentals. Our early investments in OYO Rooms and Hostmaker (vacation rental brand in Europe) gave us deep insights into this market. We believe StayVista is well positioned to dominate this fast-growing segment and become a household name.

Why are we excited about vacation rentals in India?

Vacation rentals will be an important segment in hospitality in the future. The sector has already seen great traction across different geographies driven by unmet consumer needs such as uniqueness of experience, exclusivity, and privacy. Vacation rentals also lend themselves to multiple use cases, which we’ve outlined below.

Apart from Airbnb, this segment has seen multiple brands emerge and achieve significant scale across geographies:

We expect the Indian market to follow suit.

The StayVista Model

StayVista is the market leader in vacation rentals and has been recognised by the likes of Conde Nast Traveller as one of the top villa rental brands in India. The company owns and operates a full-stack online villa aggregator and booking platform. On one side, the company ties up with property owners (“homeowners”), taking over property maintenance and end-to-end guest service. On the other side, they market these homes through their website and booking portals to travelers. These villas are high-end, luxury homes located in weekend escapes like Lonavala, Nashik, Rishikesh, Dehradun, Darjeeling, and Coorg. Amenities include F&B, Wi-Fi, linen, and in-room dining facilities, among other facilities.

StayVista’s integrated technology and operations help optimize vacation home maintenance and income for homeowners while offering guests a seamless vacation experience and providing distribution partners with a highly valuable supply of vacation rentals. The company enables guests to search, discover, and book properties on StayVista.com as well as channel partners, including Airbnb, Booking.com, and MakeMyTrip. StayVista helps homeowners drive significant incremental income by turning their vacation homes into high-performing rentals.

The StayVista business model addresses critical pain points for travelers and homeowners

India has ~200,000 vacation rental homes. However, the market is largely unorganized with inconsistencies in service and asset quality. There are major unmet needsand pain points for both travelers and homeowners. StayVista addresses the following:

For the Traveller

• Consistent service experience and adherence to strict quality standards by creating a layer of trust and transparency for the travelers
  
  
• Best-in-class online platform for end-to-end experience from discovery to checkout
  
  
• A great alternative to owning a holiday home or a club membership. The guests can visit multiple properties across locations which breaks the monotony of going back to the same holiday home or restricted number of similarly designed properties owned by a club.
  
  
• Competitive pricing ensures the price per night per person is in line with the market and comparable to that of a hotel

For the Homeowner

• The owner yield in this model is almost 3-4X of their earnings on pure rental yield.
  
  
• The average utilization is 27%. This is significantly better than comparable villas on other platforms such as Airbnb, which had an occupancy of 10% in 2021 in India.
  
  
• Hassle-free property maintenance.
  
  
• Tech solutions enable frictionless monitoring of property bookings, maintenance, and guest reviews for homeowners

What do we love about StayVista?

The tenacity and execution track record of the founding team: Ankita, Amit, and Pranav have demonstrated tenacity and grit; they have successfully navigated tough situations multiple times in their journey to becoming the market leader. The team has a fantastic execution track record in building Stayvista into the market leader in a capital-efficient manner. The team is focused on building an enduring business sustainably and is on track to becoming a category-defining brand. They have hired a strong n-1 team to help them unlock the next phase of growth.

Dominant position in a fast-growing market segment: At almost 3 times the size of its nearest competitor, StayVista is the market leader in vacation rentals in India. They are well positioned to be the market leader in a segment that is expected to open up dramatically.

Full stack model for travelers and homeowners: StayVista has fully integrated operations including property shortlisting and setup, property maintenance, marketing, customer acquisition, F&B services, guest service, booking and payment, and the homeowner experience. A full stack model is essential to build trust and preference amongst homeowners and travelers alike. We believe that a full stack model is required to deliver customer experience at scale in service businesses. The full stack capabilities make the Stayvista model complementary to Airbnb. Businesses like Airbnb will benefit from partnering with partners like StayVista to enhance the traveler and home-owner experience.

Strong growth with sound fundamental metrics: StayVista has grown rapidly with strong business fundamentals. It is a negative working capital business with very healthy operating margins which could make it an extremely capital efficient and lucrative high RoCE (Return on Capital Employed) business at scale.

Tech-first approach to improving traveler & homeowner experience and scaling: StayVista uses technology extensively to elevate guest & homeowner experience. It also helps improve efficiency and reduce overdependence on manpower.

We’re privileged to deepen our partnership with the StayVista team as they build the category-defining brand in vacation rentals!