MiStay launched earlier this year to give consumers the flexibility to book a hotel room for a few hours rather than a full-day.
The India-based startup has just expanded the service to an additional eight cities including Chennai, Delhi and Mumbai and joins a number of startups that have sprung up in this space in the past few years in other parts of the world.
Q&A with chief executive Sandeep Jaiswal:
What problem does your business solve?
We are trying to solve two key pain points travellers often face:
- Travellers often require a room for a few hours: in certain scenarios, travellers require room for only few hours. However, the current booking system only allows booking a room for the entire day. Travellers do not want to pay a full-day tariff for only a few hours.
- Travellers need flexibility in check-in and check-out timings: The rigid check-in and check-out timings (12 noon – 11 am) does not suit travellers. They do not want to wait till 12 noon if they reach hotel in the early morning. They do not want to check-out at 12 noon itself if their flight is late in the night.
This model also gives corporates an opportunity to reduce their overall employee travel accommodation expense by partnering with us and paying only for time stayed.
While attempting to solve the problem for travellers, we realised the model also offers lot of opportunity for the hoteliers to increase revenue:
- Increase Occupancy: Average occupancy rate of hotels in India is less than 60%. MiStay is creating a new segment of customers (who might not have otherwise booked a room) which hotels can tap to increase their occupancy and revenue
- Increase RevPAR: Hotels can sell same inventory multiple times in a day (up to three times). If a room is sold twice/thrice in a day, hotel can earn more than the full-day tariff, and hence increase the Revenue per Available Room
- Optimise Inventory: Hotels have complete control on which hours they want to sell on any particular day. They can choose to sell the hours when the room remains unoccupied in order to optimise their inventory
Names of founders, their management roles, and number of full-time paid staff?The founding team consists of Sandeep Jaiswal and Pranav Prabhakar.
Sandeep is the CEO and responsible for operations and business development, while Pranav is the CTO and leads technology and design. Other than the founders, there is an operations manager, a city coordinator and a few interns.
Funding arrangements?
We have been bootstrapping so far with the initial funds from the founders. We are now in the process of raising the first round of external investment.
Revenue model?
We charge a referral commission of 15-20% per transaction done through MiStay.
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
Our potential customers can be broadly classified into two categories.
First, the customers who are already booking a room for the entire day even when they only require it for few hours, and the second, those who are currently not booking a room and instead wait at the airport/spend time in cafes/malls.
In the first case, we are helping the customers reduce their expense by paying only for the time they stay. For the latter, it’s the convenience, flexibility and certainty that we are bringing which is attractive for customers. Instead of waiting long hours at the airport or waiting till noon to check-in to the hotel and compromising with their travel experience, they can book the room for a few hours and pay only for the time stayed.
External validation? (Examples: The incubators/accelerators you have been accepted to, the mentors who are advising you, the number of customers you’ve signed, the marketing partner deals you’ve made, the skills/connections of your founders, etc.)
The nature of the business model is such that the validation has to come more from the supply side than the demand side, as the value proposition for end-users is quite clear. When we started, there was much speculation about whether this model would be acceptable to the hotels.
We did face difficulty initially in making the hotel realise the opportunity, however, it has changed with time and now hotels are very open to trying this.
In a short span of a few months, we have partnered with around 50 hotels across eight cities in India. Some of these hotels already run at almost 100% occupancy, they still partner with us as they want to sell out just the hours when the occupancy is quite low in order to optimize their inventory. We enable them to achieve occupancy greater than 100%.
Moreover, we have received feedback from around 200 hoteliers/industry leaders with decades of experience who resonate our belief that this is going to be the future.
On the demand side, we have received initial customers and also initiated partnerships with a couple of companies to manage their employee travel needs in this model, thereby enabling the firm to reduce overall expense on travel. Going forward, we plan to focus on the business travel segment and organise the highly unorganised corporate travel market in India.
Tnooz view:

MiStay is not a new concept with a number of startups offering hotel room bookings for a few hours that have been around for a while.
Existing European players include Byhours (Startup pitch here) and DayUse and US-based HotelsbyDay (startup pitch here).
There is demand for a more flexible approach from hotels and DayUse recently announced €15 million in Series A funding for its businesses which should go some way to validating the model.
However, hotels have not been sleeping with some, such as Accor, already offering customers the ability to book a room for just a few hours while Yotel continues to offer rooms for a few hours at its airport properties.
MiStay's plan to reach out to the corporate market is a good idea with gains for both the traveller in terms of flexibility and productivity and the travel manager in terms of potential cost savings.
And, if hotels are truly to go down the personalisation route then this is the sort of service they will need to be prepared to offer.
Potential downsides are whether this is a big enough market to tempt existing online accommodation giants.
With only about 50 properties on the books so far, MiStay will also have to build up the supply side of the business quickly in order to be really attractive to users.