Luxury is getting what you want when you want it. The quality of service has gone up in most consumer-facing sectors in the past few years. Millions of Indians are now used to the luxuries of instant food delivery and on-demand transport, thanks to startups like Swiggy and Ola.
Startups like NestAway and CoLive have made co-living for professionals and students easier than ever before. But the one sector that is up for grabs is premium student housing.
Pune-based startup TribeStays is eyeing this space by offering premium housing, which is not just fancy furniture and air conditioners but high-quality services that the sector has not seen till now.
Founded in 2018 by Yogesh Mehra, 53, a real estate veteran who owns MyTurf Hospitality Pvt. Ltd., TribeStays claims to be India’s only premium student housing brand. The facilities include 24×7 food, laundry, housekeeping, a fully-equipped gym, en-suite bathrooms, entertainment zones, parking space, and study areas.
Although India has more than 34 million students migrating (domestically) for higher education every year, options for accommodation (in cities they move to) are few. Quite often, this is a reason for them not to relocate, or even be distracted from the sole purpose of the relocation – their education. This is the gap that TribeStays wants to fill. TribeStays is piloting in Pune, near Symbiosis University campus, with 550 beds.
Value for money
According to a JLL report on Student Housing in 2017, the total number of beds in campus housing and private hostels available in India was close to 6.1 million. There is not just a shortage of space, but also poor quality services. Students who are migrating for education often come from a background where they are used to certain comforts.
Yogesh says, “They cannot rent a house to get the same standard of life, because running a house will reduce the focus on studying. We take care of all needs, from WiFi to round-the-clock food availability, so that they can study at any time.”
All campuses are CCTV-enabled with access control systems integrated with RFID bands for every student. Female students are housed on separate floors, with female security and housekeeping staff. In addition, emergency and medical services are available at all times too. Alcohol consumption and smoking are banned in TribeStays’ properties.
TribeStays wants to treat its customers as the adults that they are and hence does not have a curfew system. Yogesh maintains that students need not be in a shell when they are away from their home. “When you are away from home you realize that with more freedom comes more responsibility. I would rather these youngsters learn the ways of the world themselves.”
TribeStays, however, does not allow outsiders (including parents) in the rooms. Yogesh adds that this market is not too price sensitive. “The standard of life is rising everywhere in India, so why not for students? They are ready to pay if there is value for money,” he claims.
TribeStays has six-month and 12-month stay packages tailored to the academic year, starting at Rs 1,17,000 and Rs 2,10,000, respectively. Since they are reaching out to students mostly via universities, it is not hard to target the right audience, who can afford it and is willing to pay.
Of the 550 beds in their Pune project, 10 percent rooms are in single category; the rest are equal in numbers between luxury twin and ordinary twin rooms. Their target audience is in the age group of 17 to 25, but TribeStays accepts only students, not tourists or professionals.
Technology as the key
TribeStays follows a completely cashless and keyless system by using tech. Booking and fee payment is automated (except for manual verification of documents), and students can move in easily.
Access to rooms is available only via an RFID band. An online top-up of this band is available at their website and app (to be launched soon). This band can be used for payments for events conducted by TribeStays as well as at the vending machines inside the property.
In case of no-show of the band for 24 hours without prior notification, parents of the student are automatically notified. An online student portal keeps score of student meal intake, attendance, feedback loops, query lists, complaints, etc.
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Managing cash burn
TribeStays follows an asset-light model by leasing out commercial buildings and renovating them as per their own design. But this demands some cash burn, too. Yogesh explains, “If we get a good building in the right location, we will take it even if we have to wait for two-three months (and pay the rent for those months without being able to use it). That’s a cash burn we have to bear with because we are particular about the properties we pick. It has to be near universities (within a two-kilometre radius), not shared (independent building), and with space for all utilities we provide.”
Additionally, he says, in the breakroom area (which is common for all occupants), they are losing out on the space for eight beds. “But it is about giving value to the customer, so we accept it. But we have not had to spend much on marketing, which is mostly done digitally or via universities.”
TribeStays is tying up with educational institutions like the Symbiosis University in Pune, which is promoting them on their brochure and website. “There is no revenue sharing here, as these institutions would otherwise miss out on some students due to shortage of space for accommodating them. They even give us a desk at their office premises during admissions time. We also conduct some events in the property to give a real-life experience.”
TribeStays Pune is part of the Airbnb network till July when the student accommodations officially begin. It took eight months and Rs 7 crore to renovate the 15-year-old building, which they leased out in June 2018. According to Yogesh, the summer vacations will see tie-ups with hostels and IT companies to increase occupancy by adopting a daily charge model.
Future plans
The JLL report mentioned earlier states that top cities for education in India have an unmet demand of 30-60 percent in student housing. Pune being the student city of the country, there are more players in the student accommodation sector. But Yogesh reiterates that there is no other player in the premium category.
“It’s not easy to explain or understand what premium housing is for students. They have to see it to believe that it is not just another expensive option. There is a certain scepticism about internet promises,” he says.
Now a team of 15 (including board members), TribeStays is expanding to Mumbai, Noida, Indore, and Bangalore by June 2019. Yogesh believes that bringing in professional management will help organise the student sector.
Startups like Coho, Zolo, Stanza Living (funded by Sequoia), OxfordCaps (funded by Kalaari Capital), and Campus Ville also function in the same space, but in different price brackets.
TribeStays is aiming to offer at least 1,200 beds by June 2019; 3,000 beds pan-India by December 2020; and 5,000 by December 2021. In Mumbai, they have tied up with NMIMS, Mithibai College, and SP Jain, and DY Patil University in Navi Mumbai.
In Bengaluru, their project is coming up in Yelahanka, near Presidency University campus. TribeStays will also launch in Indore, which is home to IIT and IIM in addition to Symbiosis University; and Kota, which is the largest in terms of coaching centres.
TribeStays will have a different look (not a typical hostel) for their properties in every city, Yogesh says.
The startup will approach VCs in the next few months. It wants to go international in another two-three years with Sri Lanka, the Philippines, the UAE, and Malaysia, and aims to be the number one player in student housing in Asia. The sheer volume of students and slowdown in residential sales have made developers look for alternative asset classes, according to the JLL report.
Better customer service is deciding winners and losers in every consumer-facing business. Even your neighbourhood pani puri seller uses gloves and gives you tissues and water today. It is only a matter of time till more players focus on service in organised student housing, thereby expanding the market.
Courtesy: Yourstory
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