In June 2016, the central government of India formulated a revolutionary scheme, in the tourism sector. The lack of ‘Budget’ accommodation was a major factor that drove the government’s decision. Called Bed & Breakfast scheme or the Homestay scheme&coming under Incredible India campaign, the schemeintended to do the following things,

• Extend hospitality in places where there was a shortage, and

• Expand in places where facilities already existed

• Offer a clean and affordable space for domestic & international guests

• Enable foreign nationals to understand Indian culture & customs through their stay in an Indian household

In order to encourage entrepreneurs,the government simplified certain rules,for people willing to set up a homestay business in India

Why is the scheme relevant in today’s context?

Since the 2014, real estate market in the South Indian hill stations has been booming.Post the government’s announcement, as the number of people who bought property increased, so did the number of people wanting to be associated with this scheme.It is estimated that FY 21 will see a considerable hike in property & land purchases; especially in the hill stations that see considerable tourist inflow

Homestay rules and regulations in India - How does this scheme work?

• This scheme applies to states and Union Territories that do not have their own mechanisms for the approval, authorization and classification of Bed & Breakfast or Homestay establishments

• A total of 21 states & Union territories including TamilNadu come under this scheme

• There are two categories of establishments namely Gold & Silver

• Homestays approved by the ministry of tourism will be duly publicised

• Short term training in hospitality trade will be provided to those who opt for it

Who is the governing authority?

The Regional Classification Committee (RCC) will set standards and check the facilities and services available, for homestay scheme in India. The committee members include

1. Regional Director Indiatourism / Director Indiatourism / Assistant Director Indiatourism, - Chairman
2. Representative from Institute of Hotel Management Catering & Nutrition (IHM) at the local Central / State level
3. Representative from State Tourism Department
4. Representative from Indian Association of Tour Operators (IATO)
5. Representative from Travel Agents Association of India (TAAI)

The application processes – How to apply for bed and breakfast license

• Three documents need to be provided by the applicant namely application form, checklist of facilities, and undertaking form

• The classification process for establishments happens in two stages
1.Verification of presence of services & facilities against the submitted checklist
2.Evaluation of services & facilities by the RCC

• When the establishment applies for the original classification or a re-classification, it should be ready for inspection at all times. Inspection will be done by the RCC

• Surprise inspections may also be carried out time to time by the RCC without prior notice

• The application fee for Silver category is Rs. 3000 /- and that for Gold category is Rs. 5000 /-

• The category classification has a validity period of two years, from the date of issuance or from the date of expiry of previous classification

Guidelines for approval and registration of incredible India scheme

• The owner or promoter must stay with his or her family in the same establishment offered for Homestay; there could be a minimum of 1 lettable room to a maximum of 6 rooms

• Each room shall have 2 beds thus the maximum is 12 beds

• In case the owner does not stay, a designated agent or operator must be appointed to service the guests

• The breakfast details must be displayed along with prices and the guests must be informed in advance of the charges collected on Bed & Breakfast basis

• Any change in the facilities must be reported to the Regional Director within 30 days of making the change

• Any modifications or shortcomings as pointed out by the RCC must be rectified in the specified time as discussed with the representatives of the establishment. The maximum stipulated time is 3 months

Hills & Wills are a professional real estate service company, that have a stronghold in South Indian hill stations. If you are keen on making a homestay investment, you are at the right place! Comprehensive services including realty advisory, a unique feature to empower buyers. Drop an enquiry or call us at +91 9500 800 900

Author's Bio: 

Soundarya Anandan is a post graduate in Marketing worked with Market Research Companies and start-ups. Currently working with Hills & Wills creative team and roll out value added contents about hill station real estate by undertaking dedicated research about this niche market.