When OYO was founded a decade ago, it introduced the concept of budget hotels and changed the way the hospitality industry operated. Now, microstays promise another such transformation in the sector, introducing the concepts of pay-per-hour and capsule stays.
According to ResearchGate, microstay hotels are expected to grow at a 14.8% rate by 2024. Hopping on the trend, Noida-based Brevistay has been mastering the pay-per-hour model for a few years.
“We built a marketplace to connect hoteliers with customers, with the USP of anytime check-in and check-out, preferably in slots of 3-, 6- and 12-hour stays,” Prateek Singh, Co-founder and CEO, Brevistay tells YS.
Started in 2016, Brevistay was co-founded by Prateek Singh, Shubham Agarwal, Nikhil Kumar Pathak, Aditya Naithani, and Avnish Kumar. It has onboarded more than 3,000 hotels in 70+ cities across the country, including premium hotels like Hyatt Bengaluru, Hyatt Pune, Pride Bengaluru, Pride Chennai, Ramada by Wyndham Hotels in Bengaluru and Lucknow, Regenta by Orchid, and many more.
“We are creating an additional source of income for hotel partners by selling their unsold rooms for a short duration, thus creating a win-win scenario for both—partner hotels and customers. We provide hotels with our extranet panel with every customisation needed to make this feasible,” he adds.
Brevistay’s app is available for Android and iOS users, and has over eight lakh downloads.
The genesis
Prateek and Aditya knew each other since their college days at Amity University, Noida. They were on the trip to Manali, Himachal Pradesh when they struck upon the idea of Brevistay.
Prateek recalls, “We faced a challenge during our Manali trip. We wanted to get early check-in at the hotel but it was charging for a full day to give check-in at 7 am. We needed the room just to freshen up and had already booked a hotel for the remaining trip.”
They realised that flexibility and affordability were missing in the hospitality industry and thought of starting up.
“We did not want anyone stranded at the airport waiting for their flight or having to wait till noon to check-in. We explored many other use cases, making it convenient for end users to get check-in at any time they want,” he adds.
Aditya introduced Prateek to Shubham, who was good at sales and finances. The three started researching the pay-per-hour model in 2015. “We quit our job in 2016 and started it full-time,” Prateek says.
Avnish also faced a similar situation when he wanted hotel accommodation for a shorter duration. When his previous venture got shut down, he found an opportunity to work with Brevistay. “We offered him equity and he happily accepted and joined us in the venture. I knew Nikhil since 2009 and he was indirectly helping the venture on weekends but was unable to quit the job initially. We offered him a full-time role in 2018 and he joined us as CTO,” he adds.
Currently, Brevistay has a team of 55 employees and the company aims to expand the size to more than 100 by the end of 2022.
Funding and monetisation
While bootstrapped since its founding, the startup announced raising Rs 3 crore from Indian Angel Network (IAN) in a seed round on its sixth anniversary on August 3, 2022. The round was led by IAN Lead investors Uday Chatterjee, Hari Balasubramanian, and Sri Prakash.
“We had invested Rs 2 lakh initially in the business and built a robust and profitable business over six years before raising our first round of funds through IAN,” states Prateek.
“We are breaking the pre-existing and centuries-old pattern of noon check-in and 11 am check-out system, and creating a new way of conducting business. With the investment from IAN, we are looking at expanding so we can take this concept to larger audiences across more cities,” he notes.
Sri Prakash, the lead investor from IAN, believes that the company has the potential to become a category leader in hourly booking for hotel rooms and similar facilities.
“We have a commission-based business model wherein we charge a fixed percentage of commission (based on industry standard) on each booking made through our portal,” Prateek adds.
The startup generated GMV (Gross Merchandise Value) of Rs 18 crore in the financial year 2021-22, growing at a rate of 10% month-on-month in terms of customer acquisition, revenue, and hotel acquisition. It claims to have been profitable in the last four years.
Brevistay has completed eight lakh bookings on its platform. It has a daily active user (DAU) base of 25,000 and 300,000 monthly active users (MAU).
“Currently, we are not offering capsule stays but we have a plan to diversify our portfolio and we’re looking to add capsule hotels on our platform,” the co-founder notes.
The way ahead
According to a report by MarketResearch.com, the hotel industry in India is expected to reach a value of Rs 121,087 crore by the end of 2023, expanding at a compound annual growth rate (CAGR) of around 13% during the 2018-2023 period.
Brevistay is strengthening its operations in metro cities like Delhi-NCR, Kolkata, Bengaluru, Chennai, and Hyderabad, and is also focusing on growing in Tier-II and Tier-III cities like Vijayawada, Kochi, Coimbatore, Mysore, Thrissur, Kannur, Tiruchirappalli, and Madurai.
In India, the startup competes with OYO, Goibibo, and Agoda, as they have also entered the short-duration stay segment. “On the global level, we have platforms like Byhours and Dayuse,” Prateek says. As of now, it has no plans for global expansion.
The pandemic caused the startup to put a pause on expansion. However, the company bounced back with a 1.5X revenue growth in the nine months after the first lockdown and recorded a 250 percent spike in the revenue numbers in the next nine months after the second wave of COVID-19.
