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Image Credit: Chetan Singh

Hotel aggregator MiStay enables people to book hotel rooms for a few hours instead of a full day.

IN AUGUST 2015, Sandeep Jaiswal from Delhi booked a hotel room in Wagah for day’s stay on a visit to the India- Pakistan border with his friends. “I arrived [in the morning] with my friends on an overnight train from Delhi. But the hotel in which we had a booking wouldn’t give us the room because its check-in time was noon,” says Jaiswal. When he checked out the next day, he had spent around eight hours in the room. But he had to pay for a full day’s stay. “It occurred to me that this model had a flaw,” says 25-year-old Jaiswal.

Within weeks, Jaiswal, a Jharkhand native with an M. Tech from IIT Chennai, had quit his job at a consultancy company in South Africa and returned home to set up a short-stay aggregator, which was to be named MiStay. His co-founder in the venture was IIT-Chennai computer science alumnus Pranav Prabhakar, 25, who hails from Kannur in Kerala and became a friend of Jaiswal while working together for the IIT-Chennai cultural fest, Saarang.

On his first day out to persuade hotel owners to join MiStay, he headed for the backpacker district of Paharganj in Delhi. “For most hotel owners, booking a room by the hour implied that the purpose was quick sex. I struggled to convince them otherwise,” says Jaiswal. “They were sceptical. ‘If we can get more money by making people pay for a full day, why should we offer lower rates for shorter periods?’ they would ask.”

That’s when Jaiswal used his numbers pitch. The average hotel room occupancy in India is under 60%. That means most hotels have vacant rooms nearly half the time. “My idea hinges on raising occupancy to 80%,” says Jaiswal. To fight the sexstop perception, he tweaked the model to sell slots rather than go exactly by the hour. MiStay settled on offering three slots—8 a.m. to 11 a.m.; 12 p.m. to 7 p.m.; and 8 p.m. to 7 a.m.

But there was another problem: Most hotels use software that do not support slot-wise bookings. MiStay found a way around it by providing hotels with a separate software to manage inventory. However, some of the big names in the business are still reluctant to use the MiStay software even though they are convinced about the model’s potential.

MiStay has tied up with 50 hotels, from the low-cost Global Radiance in Delhi’s Mahipalpur to five-stars such as Kenilworth in Kolkata and Hablis in Chennai. On bookings made from its platform, MiStay gets 20% of the room rent billed.

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Jaiswal, who has invested Rs 400,000 from his savings in the startup, says all of it has gone into building the product. The team consists of three full-time and four part-time employees.

In the first five months of operations since its launch in April, MiStay got 72 bookings, earning revenues of Rs 65,000. The Apollo International group of companies and IT company M Intergraph Systems are among MiStay’s corporate clients. “Our sales have been [through] word of mouth. Now that we are happy with the product, we are looking to raise $500,000 (Rs 3.1 crore) in the next six months,” says Jaiswal. He acknowledges that building awareness without burning cash will be a huge challenge.

MiStay was recently selected (among 11 from 500 applicant startups) for an accelerator programme by Axilor Ventures, set up by Infosys co-founders Senapathy Gopalakrishnan and S.D. Shibulal. Based on its performance during the programme, it may bag an angel investment of Rs 25 lakh from Axilor.

Hotels, too, are warming up to MiStay. “The model allows us to sell the same room several times in the same day,” says Surjit Singh, manager of Global Radiance. “The higher turnover makes up for the discounted rate for shorter occupancy.

Vikram Berera, the manager of Kenilworth Hotel sees huge potential in the model because “more and more people will prefer slot bookings to save time and money”.

Which was exactly why business executive Sachin Reddy used MiStay to find a good, affordable place near the Delhi airport to rest during a layover. “The flexible check-in and check-out made my travel plans much more convenient and less stressful,” he says.

Jaiswal’s long-term vision for MiStay is to help people fulfil their travel dreams by “triggering three key levers— motivation, time, and money”. As for numbers, he is aiming at 2.4 million customers and Rs 90 crore in revenues by 2018. By 2020, he would like MiStay to have 200 million customers and Rs 650 crore in revenue.

Manav Thadani, chairman, Asia-Pacific, of hospitality consultancy HVS, says the viability of the MiStay model will be put to test as cities get more busy and crowded. The model itself is new even in the rest of the world (New York-based HotelsByDay launched in 2015 with 60 partner hotels around the world, offering day stay at 40% less than an overnight rate). “The focus should be on hotels near [transit points such as] airports, bus stations, and train stations,” says Thadani. “Getting too many properties which do not fulfil that criterion would be a mistake.”