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Stayzilla

Stayzilla was an Indian hotel aggregator launched in 2005 that pivoted its business model in 2010 to focus on aggregating structured hotels, unstructured hotels and alternative stays like homestays. It struggled with an inability to create a local network effect, expand quickly and efficiently with limited funding, high costs and low revenues. To succeed, it needed to focus on supply, partnerships, efficient collections, understanding customers, triggering network effects through social features and updated payment systems.

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KARUN RAJ K MBA IB 2018-20
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245 views3 pages

Stayzilla

Stayzilla was an Indian hotel aggregator launched in 2005 that pivoted its business model in 2010 to focus on aggregating structured hotels, unstructured hotels and alternative stays like homestays. It struggled with an inability to create a local network effect, expand quickly and efficiently with limited funding, high costs and low revenues. To succeed, it needed to focus on supply, partnerships, efficient collections, understanding customers, triggering network effects through social features and updated payment systems.

Uploaded by

KARUN RAJ K MBA IB 2018-20
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Stayzilla Business model - bucketed into 3categories

• Launched: 2005
• Founders: Yogendra Vasupal, 1 Structured
2, 3 and 4-star hotels – mainly urban areas
Rupal Yogendra, Sachit Singhi
• Category: Hotel aggregator
Unstructured
• Headquarters: Bengaluru
2 1-star or 0-Star hotels, lodges – mainly rural areas

3 Alternative Stay
Homestays, hostels and bed & breakfasts – mainly for leisure

Humble beginnings Share of business Funding in Mn $


200
• Started as Inasra – online travel
agency for hotel bookings
25% Structured 150
• pivoted to hotel aggregator mo
del in 2010 100
• Main investors - Matrix Partners Unstructured
and Nexus Ventures 50
• Major rivals - Makemytrip, Yatra
, Goibibo, Expedia and Cleartrip 57% Alternative 0

18% stay
Sources Stayzilla OYO
• https://hbr.org Not enough capital to sustain a high
Focus was needed on Alternative stays
• https://yourstory.com
• https://blog.stayzilla.com
cost and low revenue model
What went wrong?
Inability to Inability to
create a local expand
network effect quickly and
cost
effectively

Disrupted Excessive Inefficient High cost of


cash flow and focus on GMV collection of operation and
no working - no Plan B receivables(~ low revenue
capital when funding Rs7 crore)
went dry
Ignored Discounting-based growth of Possibly emotional leadership – no change in
competitors failing strategy – unhealthy relationship with
hotel partners
Focus was on marketing ROI than to get Lack of good exit strategy when
in a position of bargain with opportunities things went south
on hand
What was required?
Efficient collection of Know your customers
Cooperation And Specialization receivables – avoid – discounts to capture
Partnerships with competitors (also struggling) cash flow crunch market share
Communities where
room owners can
Focus on supply side network
Options limited in India (rural and tourist
locations) – encourage owners to open up their
idle homes or extra rooms
MoUs with states

MoUs to exploit the high need for unstructured


and alternative stay Stay updated – upi, quick and efficient complaint
collaboration with mobile redressal systems – edge over
Trigger network effect wallets competitors
Owners, customers and Stayzilla benefits
Sources
Make travel Social • https://yourstory.com
Use of Facebook Connect, twitter- users can • https://inc42.com
• https://www.techinasia.com
see friends who stayed and their reviews • https://digit.hbs.org
• https://yourstory.com

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