This case is about the hotel aggregator Stayzilla that was founded by Yogendra Vasupal and his partners in 2005. The beginning was encouraging. Inasra, which was the name Stayzilla had started with signed contracts with 300 hotels in a year. By 2007, the number had reached 800 across 150 cities. In 2007, as a part of its re-branding exercise, Inasra was re-named as Stayzilla. By 2010, Stayzilla.com had covered 560 cities and towns in India; by 2012, it had witnessed nimble growth in its network of hotels and boasted a network of about 3,751 hotels. Stayzilla swiftly expanded its formats that ranged anywhere between USD 4 and USD 1000. In an attempt to capture market share, Stayzilla entered the alternative stay segment (home stay aggregating) in 2014, inspired by a model popularized by the US hospitality major, Airbnb. With 25000 hotel stays, 40000 properties and 8000 homestays in over 4500 towns a part of social stay model, Stayzilla depicted a rosy picture. However, not all was rosy with its financials. Extensive investments and not much of a focus on profitability dragged Stayzilla into the red. Eventually, Stayzilla failed to generate the revenue needed to cover costs. In 2016, its revenues tripled while its losses quadrupled, keeping Stayzilla bleeding. Laxity in logistics, lack of tech savvy suppliers, and low internet literacy among the consumers were a few other factors that affected Stayzilla adversely. Owing to these multiple adversities, Stayzilla shut down operations on March 14, 2017.

Leadership and Entrepreneurship Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

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Issues

The case is structured to achieve the following teaching objectives:

	Evaluate the brand equity of Stayzilla. Appraise various factors that affected its brand equity.
	Enumerate the various factors that contributed to Stayzilla’s fall..
	Debate the start-up fraternity’s plea for special treatment for start-ups in case of failure.

Contents

INTRODUCTION

BACKGROUND

TEETHING TROUBLES

COMPETITION IN THE OTA SEGMENT

RE-BRANDING

THE GROWTH YEARS

FUNDING

STRATEGY EXTENTION- ALTERNATIVE STAY

WHAT PULLED IT DOWN?

THE CASH CRUNCH ALARM

THERE WAS WORSE IN WAIT!

INADEQUATE LEGAL PROTECTION?

PROTECTION DESERVED?

EXHIBITS

Keywords

Entrepreneurship; Start-Up; Hotel Aggregator; Hospitality; Growth Challenges; Business Failures; Capital; Failure; Entrepreneurial failure; Entrepreneurial Risks; Entrepreneurial Mindset; Changing Entrepreneurial Landscape; Idea and Opportunity; Airbnb; Makemytrip, GoIbibo; Stayzilla; Online Travel Advisory; Discount Model; Branding; Nexus Ventures; Matrix Partners

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