10 Mistakes First-Time Homestay Owners Make (And How to Avoid Them)

The Romance vs. The Reality

Opening a homestay sounds romantic, right? Morning chai with a view of the mountains, evenings around a bonfire, happy guests sharing stories.I had the same dream when I built my first hostel in Jibhi. And yes, those moments exist. But so do the broken toilets, the empty off-seasons, and the loans that don’t let you sleep at night.

Over the years, I’ve watched dozens of new homestays and retreats open across Himachal, Goa, Uttarakhand, Rajasthan. Some thrived. Many shut within 2–3 years.Why? Because they repeated the same mistakes I made early on mistakes that cost me lakhs.

Here are the 10 biggest ones. If you’re dreaming of building your place, read this carefully.

Mistake 1: Building for Instagram, Not for Guests

Pretty walls and hammocks are great for photos. But if your dorm has no ventilation or your bathrooms are a mess, no one’s coming back. Guests don’t remember the archways — they remember how they felt.

👉 Fix: Focus on comfort, cleanliness, and flow before aesthetics. A property should live well, not just look good online.

Mistake 2: Ignoring Seasonality

In Himachal, you have 5–6 good months. In Goa, the rains can kill business. Too many new owners build as if guests will come all 12 months. Reality? Half the year you’re fighting to cover electricity bills.

👉 Fix: Have a plan for off-season , close smartly, host retreats, or diversify income.

Mistake 3: Overbuilding

I know people who started with 12 rooms when the location could only fill 3. Within 2 years, half the rooms were shut. Remember: empty rooms are not assets , they’re expenses.

👉 Fix: Start small. A cabin, 2 rooms, a café corner. Expand after you prove demand.

Mistake 4: Wrong Pricing

Copying Manali or Airbnb prices in a remote village is suicide. Guests won’t pay ₹5,000/night in a place they haven’t heard of.

👉 Fix: Price for your market, not your ego. Build demand before premium.

Mistake 5: Bad Layout

I’ve seen gorgeous properties where common spaces are too small, or the kitchen is a kilometer from the café. Poor layout makes daily life a nightmare.

👉 Fix: Design for function. Walk through your property as a guest and as staff before

finalizing.

Mistake 6: Ignoring Operations

Everyone wants to design beds. Nobody wants to design booking systems, SOPs, cleaning schedules. But those are what keep you sane.

👉 Fix: Create systems for staff, volunteers, check-ins, and emergencies.

Mistake 7: Depending Only on OTAs

Booking.com and Airbnb feel like saviors, but they eat your margins and control your flow. If they ban your listing tomorrow, you’re gone.

👉 Fix: Build direct bookings through Instagram, WhatsApp, and your own website.

Mistake 8: No Storytelling

If you don’t have a story, you’re just another homestay. Why will anyone choose you over the 20 others? Guests don’t buy rooms, they buy stories.

👉 Share your journey. Talk about the land, the locals, the idea behind your space.

Mistake 9: Not Building Community

A homestay without community is just cheap accommodation. What keeps guests coming back is the vibe- the feeling of home.

👉  Host dinners, events, conversations. Build a space where strangers connect.

Mistake 10: Forgetting Yourself

I’ve seen owners sleep in storerooms, burn out, and quit in frustration. If you don’t take care of yourself, you can’t take care of your guests.

👉  Set boundaries. Have staff or systems that give you space to breathe.

A Story to Remember

When we built Mudhouse, Jibhi wasn’t on the map. We had no clue it would become a destination. What worked wasn’t perfect interiors or luxury beds , it was the community dinners, the chai around the fire, the sense that “you belong here.”That’s what kept people coming back.

On the flip side, I’ve seen Fika’s café sit empty in off-season while salaries kept piling. That pain taught me that romance without numbers is bankruptcy.

These mistakes are common. I’ve made them, I’ve watched others make them, and I’ve helped people fix them. You don’t need to repeat them.

👉 If you’re serious about building a homestay or retreat, let’s talk before you spend your first rupee. One clarity call today can save you lakhs tomorrow.

📩 Check my consultancy packages - let’s make your dream project work, not just look good.