Vacation rental sites across the globe have lately caught the fancy of the travelling masses. From business travellers to holidayers â€“ more and more people are now seeking alternative accommodations, which are less expensive than generic hotels/resorts and offer more personalised experience.
Quick to track the global trend (after all, HomeAway and Airbnb are doing roaring business in a similar space), Sid Narang set up RatedApartments.com in July 2010 and the site went live in September that year. Owned and operated by Rated Interactive Media Ltd, it is a peer-to-peer marketplace for alternative accommodations and enables travellers to search and book holiday rentals, as well as serviced apartments.
The startup has presence in Delhi and London, and offers listings across Asia, Europe, North America and Oceania. Currently, there are 3,000 listings on the site and India alone accounts for 500 of these listings, covering coveted destinations like Delhi-NCR, Rajasthan, Bangalore, Kerala and Goa. On an average, around 500 listings are added to the site per month, mainly from cities like Delhi, Goa, Singapore, London and Paris.
Although Narang declined to comment on the number of bookings happening on the site, the average transaction size for overseas booking is Rs 32,000 and within India, it is around Rs 15,000.
The company provides a platform for both segments â€“ businesses and individual property owners. Those listing on the site are either businesses/companies letting out serviced apartments and/or holiday properties or individuals, ready to rent their properties (like a beach house in Goa) for short stay. Listing is free, but the company charges commission for each booking done on the site.
For individuals and small operators, RatedApartments charges a flat commission of 15 per cent, but for companies with a large inventory, the fee is 10 per cent. It can come down even further if the booking is for a longer period, say for a couple of months.
Before starting RatedApartments, Narang worked with companies like Citigroup (London), and Morgan Stanley (New York City and Deloitte), among others. He holds an M.Sc. in Finance from London Business School and a bachelor's degree in Computer Science from the College of Wooster, Ohio.
But why has the company focused on alternative accommodations alone and not added hotels to the mix?
"The market size for vacation rentals and service apartments is bigger than pure hotel rooms," said Narang, CEO and founder of the company. "That's because a large number of second homes are available all over the world, which are just waiting to be monetised. So we are only focusing on those," he added. Moreover, the global slowdown has triggered a steady demand for such cost-effective accommodations.
"In the US alone, the market size for vacation rentals is upwards of $24 billion and in total, it is over $50 billion," noted Narang.
In India, however, it is a largely unorganised sector and early movers may hold a certain edge if key destinations across the country are well covered and customer satisfaction is ensured.
On RatedApartments.com, users can search for listings according to region. They can further filter search results according to accommodation type (holiday apartments, serviced apartments and holiday rentals), number of guests, price, neighbourhood, amenities, number of bedrooms and type of booking. Visitors can also use the on-site currency converter for convenience.
Although the company does not promote properties (since it doesn't charge for listing), the site has an in-built system that automatically showcases the best-reviewed properties over a period of time.
Challenges and competition
The biggest challenge is to ensure the authenticity and the quality of the properties listed on the site. Apart from Delhi and London where the company has a physical presence, it is extremely difficult to keep a tab on such properties. In order to tackle this issue, the company puts the payment on hold until the buyer is satisfied with the property in question and refunds the amount in case it is found unsuitable.
Still, that may not be the solution in most cases. What about the initial expenses incurred to reach that particular destination, to say nothing of the disappointment and inconvenience a traveller has to suffer? We feel these things still need to be ironed out.
Companies competing in the vacation rental/serviced apartment space include global bigwigs like Airbnb and HomeAway, as well as startups like Oravel Stays Pvt Ltd and Singapore-based Travelmob Pte Ltd, among others.
What comes next?
The company currently has 15 people on board, but going forward, the team will grow. It is also planning to take the number of Indian listings from 500 to 2,000 across 10 cities within the next 12 months.
Overall, the site has done business worth Rs 10 crore and the founder is now staring at some serious growth ahead. The company is looking to raise $2 million and Narang claims that he is already in advanced talks with some investors.
So what's your take on RatedApartments? Are you willing to skip the convenience of a hotel and opt for a home-grown Airbnb (although it doesn't offer so many categories, ranging from couch to castles and more)? Still, it can be an economic and comfortable alternative that can stretch one's budget and spice up one's stay with local flavour. Share your comments below.
(Edited by Sanghamitra Mandal)