Hospitality at Home: How to Start a Profitable Homestay Business

Start a Profitable Homestay Business


  • 10 minutes read
  • In recent years, the hospitality industry has witnessed a significant shift in the way travelers prefer to experience their vacations. More and more people are seeking authentic and personalized stays, leading to the rise of the homestay business. A homestay allows travelers to experience the local culture and lifestyle by staying with a host family. If you have a spare room, love meeting new people, and wish to earn some extra income, starting a profitable homestay business could be an excellent venture for you. This article will guide you through the steps to start a successful homestay business that provides a memorable experience to your guests.

    What is a Homestay?

    A homestay is a form of lodging where hosts open their homes to travelers, offering them a room or space to stay during their visit. Unlike hotels, homestays provide a more personal touch, allowing guests to immerse themselves in the local culture and customs.

    Benefits of Homestay

    • Authentic Cultural Experience: Guests get the opportunity to live with locals, experiencing their daily routines, cuisine, and traditions.
    • Personalized Hospitality: Hosts can tailor the experience to suit their guests’ preferences, providing a warm and welcoming environment.
    • Cost-Effective: Homestays often offer more affordable accommodation options compared to hotels, attracting budget-conscious travelers.

    Start a Profitable Homestay Business in 10 Easy Steps

    Here are the 10 steps that will guide you start a profitable homestay business:

    1. Researching the Market and Competition

    Before starting your homestay business, conduct thorough market research. Identify your target audience, analyze competitors, and understand the demand for homestay accommodations in your area. This research will help you make informed decisions and stand out in a competitive market. Additionally, study guest preferences and travel trends to attract and retain guests, boosting your homestay’s reputation and profitability.

    Implement a reliable booking system, respond promptly to inquiries, maintain open communication, and provide clear check-in instructions for a smooth guest experience. Exceptional customer service encourages positive reviews, repeat bookings, and contributes a good help in start of a homestay business.

    2. Creating a Business Plan

    Every successful start a homestay business with a well-thought-out business plan. Outline your business goals, target market, pricing strategy, marketing plan, and financial projections. A comprehensive business plan will serve as a roadmap for your homestay’s growth and success.

    Moreover, regularly revisiting and updating your business plan will allow you to adapt to changing market conditions, identify new opportunities, and stay ahead of the competition in the dynamic hospitality industry. By having a clear vision and direction, you can make strategic decisions that align with your long-term objectives.

    3. Setting Up Your Homestay

    setting up homestay

    Setting up your homestay is a crucial step when starting a homestay business. It involves preparing your home to provide a comfortable and welcoming experience for your guests. Here are some key aspects to consider during this stage:

    • Guest Rooms and Amenities: Assess the available space in your home and designate rooms to accommodate guests. Furnish the rooms with comfortable beds, fresh linens, and ample storage. Consider adding amenities like a coffee maker, mini-fridge, and toiletries to enhance their stay.
    • Cleanliness and Maintenance: Ensure your homestay is impeccably clean and well-maintained. Regularly clean the rooms, bathrooms, and common areas. Address any maintenance issues promptly to provide a hassle-free experience for your guests.
    • Safety Measures: Prioritize the safety of your guests by installing smoke detectors, fire extinguishers, and first-aid kits. Clear escape routes and provide emergency contact information to give guests peace of mind during their stay.
    • House Rules: Establish clear house rules to set expectations for guests. Include rules regarding check-in and check-out times, quiet hours, and any specific policies related to your property.
    • Personal Touch: Consider adding a personal touch to the rooms, such as welcome notes or small gifts, to make guests feel appreciated and valued.
    • Wi-Fi and Connectivity: In today’s digital age, providing reliable Wi-Fi access is essential. Guests often rely on the internet for communication, work, and travel planning.
    • Accessibility: Consider the accessibility of your homestay for guests with various needs. If possible, offer accessible entrances, ramps, or accommodations to ensure inclusivity.
    • Legal Requirements: Check local laws and regulations pertaining to homestay businesses in your area. Obtain any necessary permits or licenses to operate legally.
    • Photography and Marketing: Take high-quality photographs of your homestay and its amenities. Use these images to market your homestay on online platforms and social media.

    Setting up your homestay with attention to detail and a focus on guest comfort and satisfaction will lay the foundation for a successful and enjoyable experience for both you and your guests. It’s important to continuously seek feedback from guests and make improvements based on their suggestions to refine and enhance your offerings over time.

    Also read: Host with the Most: 10 Profitable Homestay Business Ideas

    4. Designing and Decorating Your Homestay

    Decorating homestay

    Designing and decorating your homestay is a crucial aspect of starting a homestay business, as it sets the ambiance and creates a memorable experience for your guests. Here are some key considerations for this step:

    • Theme and Style: Decide on a theme or style that reflects the local culture or the unique aspects of your area. Whether it’s a rustic countryside charm, a modern urban vibe, or a coastal beach retreat, a cohesive theme will leave a lasting impression on your guests.
    • Comfort and Functionality: While aesthetics are important, prioritize comfort and functionality when selecting furniture and decor. Ensure that your guests can relax and feel at home in the spaces you create.
    • Living Areas: Design inviting common areas where guests can socialize, such as a cozy living room with comfortable seating and a fireplace or a spacious dining area for communal meals.
    • Bedrooms: Pay special attention to the design of guest bedrooms. Choose comfortable mattresses, quality bedding, and blackout curtains to ensure a restful night’s sleep for your guests.
    • Local Touches: Incorporate local elements in your decor to give guests a sense of the destination’s culture and heritage. This could be through artwork, crafts, or locally sourced furniture and textiles.
    • Sustainability: Consider eco-friendly and sustainable design practices. Use energy-efficient lighting, opt for eco-conscious materials, and encourage recycling and waste reduction within your homestay.
    • Lighting: Pay attention to lighting, as it can significantly impact the ambiance of your homestay. Use a combination of natural light and warm artificial lighting to create a welcoming and cozy atmosphere.
    • Indoor Plants: Adding indoor plants can liven up the space and provide a fresh and inviting feel to your homestay. Just ensure that the plants are easy to maintain and suitable for indoor environments.
    • Privacy: While designing communal spaces, also consider privacy for your guests. Ensure that each bedroom offers enough privacy and has its own designated amenities.
    • Photography for Marketing: Capture the well-designed spaces through professional photography. Use these images for marketing purposes on your website, social media, and booking platforms.

    Remember that your homestay’s design and decor should align with your target audience’s preferences and the overall experience you wish to provide. Strive to create an environment that fosters a sense of belonging and encourages guests to relax and unwind, making their stay truly memorable and enjoyable.

    5. Legal and Regulatory Considerations

    Legal and regulatory considerations are vital when starting a homestay business. Ensuring compliance with the relevant laws and regulations not only protects you and your guests but also builds trust and credibility for your business. Here’s what you need to address:

    • Local Zoning and Permits: Check your local zoning regulations to ensure that operating a homestay is permitted in your area. Some neighborhoods may have restrictions on short-term rentals. Obtain any required permits or licenses to operate legally.
    • Taxation and Reporting: Understand the tax implications of running a homestay business. You may need to collect and remit occupancy taxes, sales taxes, or other local taxes. Keep accurate financial records and report income appropriately.
    • Safety and Building Codes: Familiarize yourself with building codes and safety standards applicable to accommodations. Install smoke detectors, fire extinguishers, and other safety measures. Comply with accessibility requirements for guests with disabilities.
    • Insurance Coverage: Consider specialized insurance coverage for your homestay. Standard homeowner’s insurance may not provide adequate protection for business-related liabilities. Get advice from an insurance professional to determine the right coverage.
    • Health and Food Safety: If you plan to offer meals or food services, adhere to food safety regulations. Keep your kitchen and food preparation areas clean and in compliance with health standards.
    • Copyright and Intellectual Property: Avoid using copyrighted material without permission. Ensure your marketing materials, website content, and photographs are original or properly licensed.

    Addressing legal and regulatory considerations establishes a solid foundation for your homestay. Staying compliant ensures a positive, safe experience for guests, enhancing your reputation. Consult with experts to navigate complexities effectively.

    6. Marketing Your Homestay

    Effective marketing is crucial for attracting guests to your homestay. Utilize online platforms, social media, and local tourism channels to promote your business. Highlight the unique experiences and amenities you offer to entice potential guests.

    Additionally, consider partnering with local tour operators, travel agencies, and event organizers to expand your reach and tap into their customer base, reaching travelers who might be interested in the personalized experience your homestay provides.

    Furthermore, encourage satisfied guests to leave positive reviews and testimonials, as positive word-of-mouth can be a powerful marketing tool in the hospitality industry.

    Also read: 10 Effective Homestay Business Marketing Strategies

    7. Managing Bookings and Guests

    Implementing a reliable booking system is essential for efficiently managing reservations at your homestay business. Start a homestay business by responding promptly to guest inquiries, maintaining open communication, and providing clear check-in instructions to ensure a smooth and hassle-free experience for your guests.

    By delivering exceptional customer service, you will not only encourage positive reviews but also increase the likelihood of repeat bookings and referrals, contributing to the long-term success of your homestay business.

    8. Providing Exceptional Guest Experiences

    homestay service for guest

    Go the extra mile to create memorable experiences for your guests. Offer personalized recommendations for local attractions and activities, taking into account their interests and preferences. Hosting occasional events or workshops related to the area’s culture, cuisine, or arts can add significant value to your guests’ stay, providing them with unique and enriching experiences that they will fondly remember.

    Additionally, consider partnering with local businesses or tour operators to offer exclusive deals or packages, giving your guests access to special experiences they won’t find elsewhere, further enhancing their stay at your homestay.

    9. Ensuring Safety and Security

    Safety is paramount when you start a homestay business in the hospitality industry. Install security measures, such as surveillance cameras and secure locks, to safeguard your homestay and its guests.

    Provide clear emergency information and contact details, ensuring your guests feel confident and supported in case of any unforeseen situations. Regularly inspect your property to identify and address potential hazards, such as loose handrails or tripping hazards, to maintain a safe environment for everyone staying at your homestay.

    Additionally, consider having a first-aid kit readily available and educate your guests about safety protocols to further promote a secure and worry-free experience.

    10. Managing Finances and Pricing

    Keep track of your homestay’s finances diligently, using accounting software or spreadsheets to monitor expenses and income accurately. Regularly review your financial data to identify areas for cost optimization and revenue growth, ensuring your business remains financially healthy.

    Set competitive pricing by conducting thorough market research, analyzing the rates of similar accommodations in your area, and taking into account seasonal fluctuations in demand. Consider the unique features and amenities your homestay offers and leverage them to justify your pricing strategy to potential guests.

    Offering various pricing packages, such as discounts for longer stays or special deals during off-peak seasons, can attract different types of guests and increase bookings throughout the year.

    How much does it cost to make a Homestay?

    The cost of making a homestay can vary significantly depending on factors such as location, size, amenities, and desired level of comfort and luxury. On average, setting up a basic homestay can cost anywhere from $10,000 to $50,000, while more upscale and elaborate homestays can require investments upwards of $100,000 or more.

    Is Homestay Business Profitable?

    Yes, a homestay business can be profitable. When managed effectively, homestays can generate steady income through guest bookings, especially in popular tourist destinations or areas with high demand for unique accommodations. Providing exceptional experiences and meeting guest expectations can lead to positive reviews and repeat bookings, further enhancing the profitability of the business. However, success may vary depending on factors such as location, market demand, competition, and the quality of services offered.

    What are the Profitable types of Homestays?

    There are various profitable types of homestays that cater to different types of travelers and preferences. Here are five popular and profitable types:

    • City Center Retreat: Homestays located in the heart of bustling cities, close to major attractions, shopping areas, and public transportation, are in high demand among tourists who want easy access to the city’s offerings.
    • Nature Retreat: Homestays situated in scenic locations such as mountains, forests, or near lakes and beaches attract nature-loving travelers seeking a peaceful and rejuvenating escape.
    • Cultural Immersion Homestays: These homestays offer guests an opportunity to immerse themselves in the local culture, traditions, and cuisine, providing a unique and authentic experience.
    • Adventure Homestays: For adventure enthusiasts, homestays near adventure hotspots like trekking trails, diving spots, or skiing destinations can be very appealing.
    • Wellness Retreats: With the growing focus on health and wellness, homestays that offer yoga classes, meditation sessions, and spa facilities can attract wellness-oriented travelers seeking relaxation and rejuvenation.

    These profitable types of homestays capitalize on specific traveler preferences and interests, providing unique experiences that stand out in the competitive tourism industry.


    Starting a homestay business can be a fulfilling journey, allowing you to share your hospitality and culture with travelers from around the world. By following a well-thought-out plan, providing exceptional experiences, and prioritizing guest satisfaction, you can start a homestay business that thrives in the competitive tourism industry.

    FAQs (Frequently Asked Questions)

    Who owns homestay?

    Homestays are typically owned by individual homeowners or hosts who open up part of their residence to accommodate guests. These hosts may live on-site or in close proximity to the homestay and are responsible for managing the property, providing hospitality services, and ensuring the comfort and satisfaction of their guests.

    Is homestay a good investment?

    Homestay can be a good investment depending on factors like location, market demand, initial costs, and consistent guest attraction. Thorough research and a solid business plan are essential for informed decisions.