Roomwale helps plan luxury vacations on a shoestring budget

Ashna Ambre

Planning a vacation to an exotic location is exciting. However, it remains an unrealistic option for a large section of people, with hotel stays becoming unaffordable. Himanshu Chadha, and Tanuj Mendiratta, both 27, started RoomWale, which has found a way to make this dream a reality by providing access to a range of affordable, quality-rated guest houses and bed-and-breakfasts across India. “The hospitality industry in India is a big pie. A small share in it is huge for operators like us,” says Chadha, Founder of RoomWale.

Bootstrapped bookings

Chadha and Mendiratta were batch-mates at Delhi College of Engineering, but parted ways after graduating in 2007. Chadha traveled to the UK to pursue a Masters in Computer Science from Oxford University in 2008 and worked at Lord Technical Ltd, a supplier of surveying equipment, for two years. Mendiratta went to IIM Kolkata in 2010. In October 2011, they reunited and started a venture.

Digging into personal savings, Chadha and Mendiratta launched RoomWale, a website to book budget accommodation in India with seed capital of Rs. 7 lakh. They have deliberately avoided venture capitalists or private equity investment as they do not want to succumb to pressures that would alter the flexibility of their work style or the business model, they said. The idea for the venture came from personal experience. Finding affordable accommodation without compromising on quality had not been an easy or a pleasant experience. While choices for top-end accommodation are more accessible, budget stay offers limited options. Most do not live up to basic quality standards either. “We verify properties before listing them on our website and make sure they meet certain benchmarks,” says Chadha. Since the duo had set up base in Gurgaon, they tapped the Delhi-NCR region first. They visited properties and then created software to collate it online. Chadha had to soon run the show himself when Mendiratta opted out in late 2012.

Room with a view

RoomWale currently lists over 1,200 properties totalling 2,400 rooms in 36 cities, which includes smaller towns. These properties are mainly guest houses, cottages and homestays. Owners can sign-up on the site for free. The property is then screened through a vigorous background- and quality check conducted across essential parameters like hygiene, affordability, amenities, service and hospitality, after which it is rated by RoomWale. Chadha mentions that though these ratings are done, customer feedback is a parameter which affects the ratings. “In some cases, we have delisted a few properties on the basis of negative feedback from customers,” he points out. Once listed, the property is put on Google Maps and watermarked to enhance visibility.

As a privacy measure, RoomWale promotes properties without disclosing names or contact details and this information is shared only with confirmed bookings. This practice avoids the hassle of dealing with several callers. An online support team takes care of customer queries and services potential customers on chat. Chadha says nowadays they check ratings for a particular property across multiple sites before verifying it. This process saves time and automatically rules out those that are below standards.

“RoomWale also provides a platform for plausible interaction between customers and property-owner vendors. It creates visibility for vendors located in the interiors of the country and acts as a medium of advertisement for them,” says Sparsh Gupta, mentor to RoomWale. Gupta is also a partner at Wingify Software, a web analytics and optimization company.

A deal for everyone

Property rates on the site are all-inclusive and yet cheaper than what tourists would pay if they did not book through RoomWale. Customers are expected to pay a minimum of 15 percent of the total price as advance booking charges. In some cases this fee could be higher, but either way the balance amount is paid after availing the service. “When it comes to booking accommodations, customers are not too comfortable paying the whole amount upfront. This is usually due to last minute cancellations or concerns over unsatisfactory service,” says Chadha. Each reservation converts to loyalty points which, over time, can be redeemed for a free stay, an established practice in the hospitality sector that RoomWale has incorporated. Shivali Kadian, Assistant Professor at University of Delhi, and frequent customer says, “RoomWale gives each customer individual attention and personalized experience. The concept of a homestay in a different city is an unique experience.”

RoomWale also takes 15-20 percent of total price paid by customers as its commission while the balance amount goes to property owners. Their pricing policy is flexible with varied discounts but cancellation policies are fixed. During off-season, prices are lower and similarly during high occupancy, tariffs could increase.

The average room rates per night are in the range of Rs. 1,500-Rs. 1,800. The startup has booked 3,000 room nights in one year, but Chadha does not disclose revenues. RoomWale’s team of four looks into basic functioning and management of services, and has outsourced technical jobs like photography and property verification.

Chadha is focused about offering quality coupled with affordability and this has created loyal customers like Kadian. She points out that RoomWale’s rates are almost at par with competitors, but periodic discounts as a value addition and the quality of service are what make her a loyal customer.

Opportunities galore

RoomWale undertakes bulk bookings for events, weddings and corporate functions. Chadha says that the tourism sector being seasonal, it usually results in a massive influx of bookings during vacations and wedding periods during May-July and November-February. Gupta feels the startup has tremendous scope due to the globally booming tourism industry. India is a cheap destination for international travelers, he notes, and since resorts and luxury hotels cannot provide a ‘home’ flavor of the country’s rich culture, this provides a big opportunity for RoomWale. Factors like the deepening broadband and credit card penetration also help. Chadha has had his share of challenges largely around physical verification of properties, tracking availability and occupancy of rooms and online marketing. RoomWale’s notable contribution to the tourism industry has been creating visibility for nondescript cities like Ranikhet, Patnitop, Almora, among others. Chadha is looking at covering more such cities with a special focus on north-eastern states and parts of South India. He plans to focus on intelligent search engine optimization and online marketing, both crucial practices for an online business, and pepper his inventory with unique and exclusive properties.

Flying High

Goa witnessed an 8.9 percent increase in average rate in occupancy in FY12

Expected growth of room supply to rise by 138,000 in FY17

Total contribution of Travel and Tourism to India’s GDP expected to rise by 7.8 percent annually by FY’22

The Ministry of Tourism wants India to attain the level of 11.24 million foreign tourist arrivals by FY16

(Hotels in India Trends & Opportunities, 2012)