Like any other hospitality organization, homestay owners too need to build trust amongst the guests and ultimately build a brand name for his homestay. The journey from getting the first guest to becoming a name to reckon with takes quite some time. Moreover for those who are looking to buy a plantation homestay or a holiday home, it will probably take years to built the plantation and achieve something considerable. We’re seeing the beginning where for a variety of reasons (age, ill health etc.), some homestays are coming up for sale giving rise to new opportunity for savvy buyers to enter this business – by buying an already running homestay.
However there are two aspects to look into here:
1. There are many categories of homestays in India, based on their size, amenities, etc. For smaller homestay units, homestay owners don’t form a company and are registered with some government body. So buying an already running homestay will here mean buying the property. The existing homestay owner must have been running the homestay with a particular brand name with which travelers relate. With the homestay are associated its personal website, email ids and telephone Nos., so for someone buying an already running homestay, should ideally mean not only the transfer of the property, but also its brand name and the other related components. Once the homestay is bought, one can get it registered with the authorities with the same name.
2. And then there are holiday homes or plantation homes, as alternatives to hotels. These are usually much bigger and buying such a holiday home or plantation home not necessarily means buying the property alone. For instance, a full-fledged plantation home will ideally be located in a huge area with acres of plantation, it will have many employees working on it, etc.
These plantations will in actuality be fully running companies. So for an entrepreneur who is looking to buy an already running plantation homestay he will have to buy the company. Since buying the company will mean not only buying its brand name, but also the immovable property and other assets.
BENEFITS OF BUYING A HOMESTAY AS A COMPANY:
The first and foremost benefit is that you minimize disruption to the business and have very limited paperwork- You will need to purchase the shares and transfer them to your name which can be done very quickly and at limited cost by any competent Chartered Accountant.
Secondly, the employees can continue to work for the company, because here only the ownership has changed.
Thirdly, you get the brand name of the company, which is important as it saves you a lot of time, energy and resources ideally required for brand-building.
Fourthly, you can start your vacation rental business the very next day. Since it is a already running facility, you will not need to made any major changes and any minor improvements can be done in lean seasons.
Do let us know if you come across such opportunities and need any advice or assistance. We’re happy to help.
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