As any civilization grows, so do the needs of people. Every industry today is largely consumer driven with products and services meant to cater to people’s smallest needs. Consumers today have more choices than ever before and they want more freedom and flexibility in everything. The same holds true for the travel industry.
There was a time when one had to hire a cab for the entire day if they needed to use it even for a few hours. After the dent made by services like Ola and Uber in the cab industry, it is hard to imagine booking a cab for an entire day when need it only to go to work. Unfortunately, this has not changed when it comes to hotel booking. We are used to booking a room for an entire day even when we need it for just a few hours.
We started MiStay (an abbreviated form of microstay) with the aim of making travel flexible & fair to travellers. However, we soon realized that this is meant to benefit not only travellers, but every stakeholder in the hotel industry ecosystem.
How “Room by Hour” impacts Travellers?
- Travellers in Transit : Any frequent traveller would relate to scenario when they had a long layover before a connecting flight/ train. Travellers struggle to find a corner and just wait 'comfortably'. It becomes a tiring situation in most cases. ‘Room by Hour’ will allow them to freshen-up and relax before catching the next flight.
- Business Travellers: Business travellers often find themselves in a situation where they land early morning in a new city to attend an event, and need a place to freshen up. Or, they have a late night flight but they need to vacate the room by 12 noon, else they’ll be charged for the full day. The full day booking with rigid check-in/ check-out time then becomes a hassle for business travellers and a “day use hotel” will be a much needed relief.
- Backpackers: Backpackers prefer to spend the entire day for sightseeing, meeting the local residents and understanding the local culture & tradition of the new city they have visited. They have very less inclination towards spending the day in a hotel room. All they require the room for is to spend the night and have a good sleep. Having a system where they can book room only for the night and pay only for time stayed would be lot more efficient.
- Leisure Travellers: Experiencing the royal hospitality of 5 star luxury hotels is often dream of many, but affordable to few. The concept of “room by hour” enables people to live this dream.
- Health Travellers: Despite the much hype about tremendous growth in healthcare industry, the best in class services are yet to penetrate in rural areas. The telemedicine market is yet to be proven. A vast population from rural areas and tier 2 cities have to travel to metro cities to access the healthcare service. They require room in the new city for a couple of hours before visiting the hospital. “Day Use” perfectly fits into their needs.
- Religious Travellers: Religious tourists also require a room only for a few hours to freshen-up before heading out to their destination.
- Academic Travellers:Students from villages or Tier 2 cities have to travel to nearest test centres in different cities for writing the test. Students hunting for jobs travel to another city for interviews. All they require is a room for few hours to get ready.
How “Room by Hour” impacts Hotels?
Increase Occupancy: Despite a large travelling population, the average occupancy rate of hotels in India is less than 60%. Hotels cannot significantly bring down their rates to attract more customer as they don’t want to risk diluting the brand value of the hotel.
On the other side, there is a section of travellers that is not booking a hotel due to the rigid full-day booking traditions. Travellers having a layover before a connecting flight wait at the airport rather than paying for a hotel for full day. Business travellers, many-a-times, directly go to the office or freshen up at airport to avoid paying for full day when hotel is needed for only few hours.
By offering room on an hourly basis, hotels can attract this untapped segment of customers to increase occupancy. Moreover, when they sell the room by hour at lower rate, they are advocating fair pricing and do not dilute the brand value of the room as the full day rates remains the same.
Monetize additionally: Majority of the existing customers that the hotels get through various channels (traditional OTAs, direct bookings, corporate tie-ups, etc.) include guests who check-in late in the evening and check-out in the morning. Hence, most of the rooms are occupied in the night but remain vacant in the day time. Offering room by hour for those periods of time enables the hotels to monetize the rooms additionally.
Increase in RevPAR (Revenue per Available Room): By selling the room by pack hours, the hotels have the opportunity to sell same inventory more than once in a day. The total revenue earned from a room in a day by selling them multiple times can add up to lot more than the original full day rate.
While the benefits of offering room by hour look obvious and it is a win-win proposition for every party, it does come with logistical challenges and operational complexities. The technology needs to be evolved and the capacity needs to be built to support this change. Not to forget, the challenge of dealing with the taboo associated with booking of room by hour. MiStay has taken the step in facilitating this change.
At MiStay, we take pride in the fact that we are driving this change in hospitality aimed at benefiting every stakeholder the travel ecosystem – travellers and hotels alike. We are delighted to see more and more hotels joining hands with us in this initiative. Every time a traveller who had a long layover at airport books a hotel through MiStay instead of waiting at the airport, we feel overwhelmed. It gives us a sense of accomplishment every time a customer escapes the hassles of rigid check-in & check-out time because they booked through MiStay. We have just gotten started and there is an extremely long way to go, though we feel excited about the journey that is to unfold.