Suppose you are planning to go from location A to location B with your family to enjoy some vacations. The motive of the entire trip is to spend as much time together as possible which is not possible on a hectic day. As an intelligent manager, the first thing you are going to do is to list down all the possible situations that could arise and to find the feasible solution for the same. So the sequence of all the activities is as follow – going from home to airport/ railway station, getting into the flight/train/ bus on time to reach to the desired location, get the spot for stay, enjoy your trip and get back to home.

If you look the same problem from perspective of a potential entrepreneur, you are going to analyze the above mentioned activities and try to pick the pain areas for people and provide the best feasible solution to your customers. The possible pain areas could be ticket booking, hotel booking, transportation medium and other services at destination etc. The better you solve the problem; more are the chances of acceptance by customers. Few entrepreneurs have analyzed the same and developed their startups to provide facility to mass – like Oyo Rooms, Zo Room, Ibibo, Makemytrip, Yatra etc.

On Demand Hotel Service Startup – Targeted Problem

Let’s assume you are planning to solve the pain area of offline hotel search by providing a common portal of all the available hotel options – searching and booking facility.

Travelling from one location to another is itself a pain area for people and the search of suitable stay point in an unknown location further add-on in the same. Offline search of hotels in an area is difficult as well as time consuming. So the probability of acceptance of the concept is quite high for the targeted consumers.

On Demand Hotel Service Startup – Basic Business Model

Based on the stakeholders involved, the basic business model of On Demand Hotel Service startup is as follow –

On Demand Hotel Service Startup - Generic analysis & Scope of Improvement

[A] Aggregator – Aggregator is the player that provides the common portal for hotel room service providers. The role of aggregator is to build a robust platform where the gap between service providers and consumers could be bridged and to ensure the quality standards developed for brand name is by deploying service providers’ improvement programs. The revenue generation for aggregator is the commission from service providers based on the type of model – per service use, monthly registration chargers etc. The benefit for aggregator is that it’s making revenue and brand name for consumers as well as service providers.

[B] Hotel / Room Provider– Service provider is the player that owns hotel / rooms. The role of service provider is to ensure the availability of standard service for consumers that are getting directed through aggregator. The revenue generation for service provider is by the extra traffic that he/she is getting by aggregator. The benefit for service provider is the enhanced reach and hence extra revenue.

[C] Consumer–Consumer is the person who is using the hotel / room service via aggregator portal. The benefit to consumer is the convenience in terms of easy search along with the trust of brand name.

Hotel Service Startup – Business Extension

The simple model of On Demand Hotel Service startups can be enhanced in more dimensions as well –

[A] Integrated Cab Service

The very first requirement when a traveler enters a new city is the transportation requirement to reach from desired points in the city. The business model of On Demand Hotel Service startups can be enhanced by integrating the cab service in it. From pick point to hotel travel and within city transportation of consumer can be simplified by incorporating cab service either by self or by third party to enhance the simple business model.

[B] Integrated Food Delivery Service

Though the food is generally provided by the respective hotels, but for the specific requirements food delivery service can also be implemented in the same business model. If traveler is able to get the solution for travel, food and transportation at one place, the acceptance of startup shall be at exponential rate.

[C] Facility of Communication Medium

The other basic requirement is of communication medium. To facilitate the consumer with communication medium, pre-activated Simcards, internet facility like dongle etc can also be incorporated in the business model. For foreign tourist, such kind of combined arrangement of food, cab, hotel, communication shall be very beneficial via single portal.

[D] Travel Guides

For tourist, travel guide can also be incorporated in the same model. A free directory portal of the famous places in the nearby area would be the source of traction where consumers can rate and review the famous spots in the city. Consumers looking for private travel guide can also be entertained by becoming a coordinator between both the parties.

Other scope of improvement could be incorporating all the related services in the business models as per consumers behavior and demand analysis.

Hotel Service Startup – Generic Analysis

FS brings the first cut planning of On Demand Hotel Service startup – the factors that need to be considered at initial stage itself for long term survival.

[A] Business Analysis – Suitable, Sustainable and Scalable

First requirement for any of the startups is an idea that is suitable for mass, sustainable in terms of revenue generation and scalable in long run.

The idea of On Demand Hotel Service startup is suitable for the mass that has rapid travel in their life. So the targeted marketing to reach those consumers to reach the break-even point will make the concept self-sustainable. The scalability of idea is good in terms of geographical presence as well as related business verticals.

[B] Market Analysis – Potential, Competition and Penetration

The next requirement of On Demand Hotel Service startup is to analyze the market of On Demand Hotel Service startup in terms of potential volume, competition level and the expected penetration in the market.

The potential of concept is in those areas where tourists are visiting more frequently. The competition level of existing direct players and indirect players shall be analyzed in advance so that all the marketing strategies can be aligned in terms of desired penetration level.

[C] Resource Analysis – Scope, Cost, Manpower and Risks

The next requirement of On Demand Hotel Service startup is to check end ensure the availability of required resources to execute the project.

The entire scope of work that needs to be done, the cost associated with the activities and the required manpower for same shall be evaluated to avoid the problems during execution. The risks associated with the business plan along with their mitigation plans need to be estimated.

[D] Survival Analysis – Marketing, Revenue and Long Term Vision

Survival of On Demand Hotel Service startup is based on the revenue that it is generating. So the proper marketing strategies needs to be designed aligned with the long term vision of startup – either to become leader or to get acquired.

Wish you luck for your startup. Stay tuned with FS Labs to know more.