Acquisition project | Spacez

Have you ever been to an urban city and missed the comfort of your home— but also longed for an intimate 5 star experience at the same time ?

At Spacez you get to book handpicked Homestays in the neighbour hood of the most prime locations in Bangalore, Mumbai, Hydrabad & Delhi, paired with unparalleled hospitality, food Just like mom’s home-cooked love, top-tier cleaning & 24/7 concierge service.

1. User

• Affluent families seeking privacy and comfort,

• Couples looking for romantic, tailored experiences,

• Business travelers and corporate groups in need of central, luxurious stays,

• International tourists desiring high-end hospitality with easy city access.

2. Ideal Customer Profile for the product

3. Market Validations

Spacez a New Category in the existing Luxury Homestay & Villa Market.

Homestay and Villas exist in the market but none tailored for corporate stays, private events and getaways and there by gets solved by hotels and grand suites.

• Calculating TAM

  By following the Bottom Up Approach here's an expected TAM.
  Key Factors: Number of properties, average occupancy rates, and average revenue per night.

  Estimate the Number of Luxury Homestay & Villas

  According to reports we need about 2.5 Million additional rooms in a broader Homestay Market.
  
  Link: https://stg.forbesindia.com/article/lifes/the-rise-of-luxury-homestays-in-india/89677/1

  Average Nightly Rate and Occupancy

  Luxury homestays typically charge b/w 7k - 50k (INR.) Where Stayvista has properties upto 60-70k and some villas in Airbnb offer quality service for as low as 5k per night.
  A realistic average for premium properties could be taken as 19,750(INR.) per night.
  Occupancy: Assuming the property stays booked for 60% annually about 219 night/year.

  Calculation

  • Assuming there are 10,000 luxury homestay unit (which are of Spacez Standards).
  • Average Revenue Per Unit ?
    20,000(INR.) * 219 Nights = 4,380,000(INR.) per unit annually.
  • TAM : 10,000 properties * 4,380,000(INR.) which is
    43.8 Billion annually.

SAM

Luxury-focused booking platform can realistically target within the broader market given an upper condition if the market is urban centres.

If we assume that a platform can address around 50% of these properties due to regional availability and brand preference, the SAM would be approximately ₹21.9 billion annually.

SOM

For new players like us capturing 5-10% of the market share is ideal.

• 5% SOM: 1.1 Billion Annually
• 10% SOM: 2.19 Billion Annually

Core Value Proposition

Offering luxury homestay/villa in urban centers, specifically in high-demand areas like Bangalore and Mumbai.

Problem Solved: You address the need for an intimate, personalized, and comfortable living space that provides a home-like atmosphere in bustling urban areas. This meets the demand from travelers who seek more privacy, flexibility, and comfort than standard hotel accommodations can offer.

Key Features:
1. Villas in most prime locations there by facilitating great commute + enhanced experience. 

2. Curated Stays where each and every villa offers one-of-a-kind experience.

3. 5 Star Level Amenities

4. Work Ready with a complete WFH setup with fast wifi and on-demand extra monitor

5. Private Caretaker + Private Chef for personalised experience. 

6. Compete privacy where it's a couple's get away or a social gathering + pet friendly.

To select the best acquisition channel, we can prioritize by comparing each channel against the criteria of cost, flexibility, effort, speed, scale, and budget. 

On the basis of above analysis of each channel

Referral Program (While keeping the CAC flat acquiring more customers)

Experiment: Using Marketplaces for great visibility & speedy adaptation

Hypothesis: While building a zero-to-one product which is in PMF, the primary challenge is to build distribution. And the distribution becomes very easy if there are marketplaces available for the product. And in this case, there are, so we are going to take full advantage of it, as these platforms already attract users searching for premium stays.

This approach maximizes the quick visibility and traffic potential of established platforms, enabling to reach potential guests efficiently and gain valuable feedback to enhance future listings and then later converting them to a personal channel.

Paid Ads (Best channel for quick traction)

This is a 2 Phase Experiment- to maximize property visibility, encourage organic discovery, and drive direct bookings by optimizing both Google Business listings and Google Ads for keywords related to luxury villas and homestays.

The intent is to leverage OTA traffic and increase the chance of direct bookings through improved listings and ad targeting.

Hypothesis: Indian market is a value-for-money market so it is obvious that that the consumer before buying any goods and services does a fundamental DD, Swiggy’s product team discovered that users were briefly exiting the app before checkout to compare prices on Zomato for the same restaurant. This observation highlighted the importance of perceived value in a marketplace, as customers sought the best deal across platforms before committing to an order.

By improving Google listings for each property and running targeted Google Ads for specific keywords, we expect a increase in direct website traffic and in direct bookings. This dual approach allows us to capture high-intent searches from users who have already viewed the properties on OTAs, providing a coherent experience and price advantage that encourages direct bookings.

Feedback Loop and Iterations

1. First Feedback Cycle (After 2 Weeks): Assess the initial impact of Google listing improvements and adjust keywords or descriptions if certain aspects aren’t engaging. Monitor early ad performance and pause low-performing keywords or ads with high CPCs.
2. Second Feedback Cycle (After 4 Weeks): Evaluate listing views, CTR, and direct bookings to determine if the price advantage is driving conversions. Adjust the ad copy or bidding strategy based on high-performing keywords or competitive metrics.
3. Long-Term Iteration:
4. • For listings, consider testing additional promotional text or featured attributes that performed well. For ads, shift focus towards high-converting keywords, and expand geotargeting if the initial experiment indicates a favorable ROI.

Organic (SEO):

Create a blog series focused on luxury travel guides targeting specific urban neighborhoods (e.g., “Top Luxury Villas in Bangalore’s Whitefield” or “Luxury Homestays Near Mumbai’s Best Attractions”). Each post should be keyword-optimized for location and villa amenities, linking back to your property pages. This attracts organic traffic from high-intent searches, positioning your properties as the go-to options in those areas.

Use Case Searches

Paid Ads (Best channel for quick traction)

This is a 2 Phase Experiment- to maximize property visibility, encourage organic discovery, and drive direct bookings by optimizing both Google Business listings and Google Ads for keywords related to luxury villas and homestays.

The intent is to leverage OTA traffic and increase the chance of direct bookings through improved listings and ad targeting.

Hypothesis: Indian market is a value-for-money market so it is obvious that that the consumer before buying any goods and services does a fundamental DD, Swiggy’s product team discovered that users were briefly exiting the app before checkout to compare prices on Zomato for the same restaurant. This observation highlighted the importance of perceived value in a marketplace, as customers sought the best deal across platforms before committing to an order.

By improving Google listings for each property and running targeted Google Ads for specific keywords, we expect a increase in direct website traffic and in direct bookings. This dual approach allows us to capture high-intent searches from users who have already viewed the properties on OTAs, providing a coherent experience and price advantage that encourages direct bookings.

Steps to Execute the Experiment

Phase 1: Google Business Listing Optimization

1. Create or Claim Google Business Profiles for Each Property: Ensure each property has a verified Google Business listing.
2. Optimize Property Descriptions and Add Services: Highlight unique features, location benefits, and luxury amenities.
3. Add High-Quality Visuals: Use professional photos and videos that emphasize key selling points like private pools, scenic views, and modern interiors.
4. Set Custom CTA to book through website: Add a custom button that redirects user to your website.
5. Enable Google’s Pricing Comparison: Allow Google to show pricing comparisons from OTAs and the direct website to maintain transparency while showcasing the custom price advantage if booked directly through the website.

Phase 2: Google Ads Campaign Targeting High-Intent Keywords

1. Identify Target Keywords: Use keyword research tools to find high-intent, niche keywords related to luxury stays (e.g., “villa with jacuzzi Bangalore,” “private villa with chef Mumbai”).
2. Set Up Search and Display Ads: Create ads targeting these keywords, ensuring they highlight luxury features, direct booking benefits, and custom pricing.
3. Geotarget Key Urban Areas: Limit ads to locations with high concentrations of target customers (Bangalore, Mumbai, Delhi) to maximize ad relevance and ROI.
4. Monitor Ad Performance Weekly: Regularly track ad engagement, click-through rates (CTR), and conversion rates to refine targeting and ad copy based on performance data.

Pros:

• Enhanced Visibility: Optimized Google listings increase the chance of users finding your property organically when they search for it after viewing it on OTA platforms.
• Increased Direct Bookings: Google’s price comparison allows users to see the custom price advantage, incentivizing direct bookings.
• Broader Reach via Google Ads: Ads for niche keywords capture a high-intent audience, driving additional traffic from users specifically seeking luxury villa experiences.
• Brand Credibility: Listings on Google create a sense of legitimacy and brand presence, fostering trust with prospective guests.

Cons:

• Potential for Higher Costs: Google Ads, particularly in a competitive space, can result in high CPCs for luxury-oriented keywords.

Tracking and Measurement of Success

1. Direct Booking Volume: Track the number of direct bookings made through Google listings and compare them with bookings from OTA channels.
2. Listing Engagement: Monitor engagement metrics on Google Business listings (views, clicks on booking link, user photos and reviews) to gauge interest.
3. Google Ads Performance Metrics: CTR, CPC, and conversion rates on each targeted keyword should be monitored. Higher CTRs and lower CPCs for certain keywords can indicate effective ad relevance and targeting.
4. Revenue Comparison: Compare revenue from direct bookings vs. OTA bookings to assess the financial impact of reduced fees and custom pricing.
5. Customer Insights: Collect data on booking behaviors and demographics to further understand the audience responding to these channels and adjust targeting accordingly.

Feedback Loop and Iterations

1. First Feedback Cycle (After 2 Weeks): Assess the initial impact of Google listing improvements and adjust keywords or descriptions if certain aspects aren’t engaging. Monitor early ad performance and pause low-performing keywords or ads with high CPCs.
2. Second Feedback Cycle (After 4 Weeks): Evaluate listing views, CTR, and direct bookings to determine if the price advantage is driving conversions. Adjust the ad copy or bidding strategy based on high-performing keywords or competitive metrics.
3. Long-Term Iteration:
4. • For listings, consider testing additional promotional text or featured attributes that performed well. For ads, shift focus towards high-converting keywords, and expand geotargeting if the initial experiment indicates a favorable ROI.

A valuable product integration experiment could be to partner with corporate travel and lifestyle platforms popular among business travelers and high-income professionals in India. Platforms like Cleartrip, TravelPerk, and HR-driven platforms like CVENT are commonly used by large corporations and startups for booking travel and accommodation for executives. Partnering with these platforms could position your luxury homestays as a preferred option for corporate retreats, business travel, or work-from-home-friendly stays.

Experiment: Corporate Travel Integration with Cleartrip Corporate

Hypothesis

Integrating with Cleartrip Corporate will provide visibility among high-value business travelers and corporate clients, in bookings from professional segments seeking premium, work-friendly accommodation in major cities.

Steps to Execute the Experiment

1. Initiate Partnership with Cvent Corporate: Approach Cvent Corporate with a proposal highlighting your luxury features, WFH-ready setups, and private chef options, which are attractive for executives seeking a comfortable, high-end stay.
2. Develop a Unique Corporate Package: Create exclusive packages for corporate bookings, such as “Workcation Packages” or “Executive Retreats,” offering amenities like high-speed Wi-Fi, on-demand office equipment, and meal plans.
3. Optimize Listings for Corporate Requirements: Make sure listings on the platform highlight features relevant to business travelers: private meeting rooms, quiet zones, and proximity to business districts in Bangalore, Mumbai, and other cities.
4. Offer Corporate-Exclusive Discounts or Perks: Provide discounts or added services (e.g., complimentary airport transfers, early check-ins, or late check-outs) specifically for Cleartrip Corporate bookings.
5. Track Corporate Bookings Separately: Use a tracking code or unique booking link to monitor conversions from Cleartrip Corporate, providing data on the effectiveness of the partnership.

Pros and Cons

Pros:

• Direct Access to Target Audience: Corporate platforms connect directly with business travelers and decision-makers, ideal for your high-end homestay offerings.
• Enhanced Brand Credibility: Listing on Cleartrip Corporate or similar platforms builds credibility, associating your properties with premium corporate travel.
• Scalable Channel for Expansion: A successful partnership with Cleartrip Corporate can be scaled to other platforms like MakeMyTrip Corporate and TravelPerk, enhancing reach.

Cons:

• Commission or Fees: Corporate travel platforms often charge fees or take a commission per booking, reducing net revenue.
• Platform Control: Limited control over listing customization and direct customer interaction.

Tracking and Measurement of Success

1. Booking Volume and Conversion Rate: Monitor the number of bookings from the corporate platform each month and calculate the conversion rate to assess initial engagement.
2. Revenue Analysis: Compare corporate booking revenue with standard bookings to evaluate the profitability of corporate packages.
3. Customer Feedback: Collect feedback from corporate clients to refine listings, offerings, and determine if additional features should be added for business travelers.

Feedback Loop and Iterations

1. First Feedback Cycle (1 Month): Assess booking volume and user feedback to identify which features resonate most with corporate clients. Modify package details if necessary.
2. Second Feedback Cycle (3 Months): Evaluate the partnership’s overall performance based on revenue, feedback, and repeat bookings. Adjust marketing messaging on the platform based on high-engagement features.
3. Long-Term Iteration: If the Cleartrip Corporate partnership proves effective, expand to other corporate travel platforms to replicate the success. Add exclusive perks for repeat corporate clients to build long-term loyalty.

This integration experiment leverages corporate travel networks to boost bookings and reach high-value customers seeking premium, business-friendly stays.

Referral Program (While keeping the CAC flat acquiring more customers)

Experiment: Using Marketplaces for great visibility & speedy adaptation

Hypothesis: While building a zero-to-one product which is in PMF, the primary challenge is to build distribution. And the distribution becomes very easy if there are marketplaces available for the product. And in this case, there are, so we are going to take full advantage of it, as these platforms already attract users searching for premium stays.

Expected Outcome: Collection of early feedback from guests on these platforms, allowing for refinement of the listing content, pricing, and highlighted features.

Now with the plethora of available marketplaces also knows as OTA platforms we'll get a ready distribution and great visibility a faster access of consumer.

Analysis of Experiment

• Cost: Low (No direct cost, revenue share b/w 5-15%)
• Flexibility: Low
• Effort: Low
• Speed: High
• Scale: Medium
• Budget: Medium

Steps to List your property on market place.
Select a market place of your choice &

Link to full whimsical: https://whimsical.com/project-x-7mpH6bkXJ2aR6uyJZQWDdk

Pro's of Experiment

• Wide Audience: Access to an existing, actively searching audience without additional marketing.
• Trust Factor: Platforms have established credibility, often reassuring guests about the property’s legitimacy and service quality.
• User Reviews: Collects user reviews, which boost social proof and can later support standalone channels.
• Fast Results: Potentially faster bookings than organic or newly created channels.

Cons's of Experiment

• Platform Fees: Most platforms charge fees per booking, reducing net income.
• Dependence on Platform Algorithms: Visibility and ranking rely on the platform’s algorithms, limiting direct control.
• Limited Brand Building: Guests may associate the stay more with the platform than with your brand.

Tracking & Measuring Success

• Booking Volume: Track the number of bookings generated by each platform in the first 30 days to evaluate which OTA provide the highest yield.
• Revenue Analysis: Compare gross revenue generated with net income after platform fees to assess profitability.
• Customer Insight: Collect demographic data from each platform if available to understand guest preferences and improve targeting for future listings.
• Guest Feedback & Reviews: Analyze guest feedback to refine descriptions, identify any areas for improvement, and highlight the most attractive features.
• Channel Performance: Track the booking pace across platforms to identify which have higher engagement and faster conversion.

Feedback Loops & Iterations

• First Feedback Cycle: After 15 days, review booking volume, conversion rates, and user feedback to refine the listing descriptions, update photos if necessary, and adjust pricing based on competitive listings.
• Second Feedback Cycle: After 30 days, assess the overall performance, especially comparing booking fees across platforms to prioritize the best-performing channels.
• Long-Term Iteration: Build a collection of positive reviews on top-performing platforms, then evaluate if these platforms can provide a consistent customer base. Consider focusing on 1-2 platforms with the best ROI for long-term partnership and explore options for direct booking incentives for repeat guests.

This approach maximizes the quick visibility and traffic potential of established platforms, enabling to reach potential guests efficiently and gain valuable feedback to enhance future listings and then later converting them to a personal channel.