A homestay business is an accommodation venture where homeowners rent out a room or part of their house to travelers seeking a warm and personal stay that hotels or guest houses often cannot provide. Unlike hotels or guest houses, homestays are usually located within the owner’s residence, offering a simpler concept and more affordable prices. This is why many travelers choose homestays to experience a more authentic local atmosphere.
The growing number of visitors to various tourist destinations has also reopened opportunities for the homestay business. However, to succeed in this competitive industry, careful planning is essential—from licensing and marketing to facility development.
If you are interested in starting one, here are several tips for starting a homestay business so your venture can grow successfully and generate more profit.
What Is a Homestay?
Simply put, a homestay is a type of accommodation where guests rent a room or a part of a house and stay with the homeowner for a certain period of time. If you are wondering what a homestay is, the answer is a lodging option that feels more welcoming and personal than a hotel because guests can interact directly with the host.
Homestays are commonly found in tourist destinations or areas with strong local cultures. Today, the concept has evolved beyond just a place to stay—it is also part of ecotourism and a way to improve the income of local communities.
Guests can experience everyday local life, from tasting traditional dishes to observing cultural traditions. Homestays are also flexible in form—some offer only one room for rent, while others provide several units located within the same residential area.
Tips for Starting a Homestay Business
Starting a homestay business requires careful preparation. To ensure smooth operations and strong competitiveness, there are several important things you should consider from the beginning. Here are some practical tips.
1. Choose the Right Location
Before starting a homestay business, make sure you select a location with strong tourism potential and frequent visitors. Homestays are typically more attractive when located near tourist attractions because travelers prefer convenient accommodation.
In addition, choose a strategic and easily accessible location to make your property more appealing to potential guests.
2. Prepare the Homestay Setup Budget
Although it is generally more affordable than building a hotel or villa, starting a homestay still requires proper financial planning. At minimum, you may need around IDR 5–10 million, depending on the concept, renovation, and interior design you plan to implement.
The total cost will naturally vary depending on your property condition and the facilities you wish to provide.
3. Obtain the Required Homestay Business Permits
Every accommodation business must have commercial permits and business licenses according to local regulations. While requirements may vary by region, you generally need to prepare several documents, such as:
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Copy of ID card
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Principle approval
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Taxpayer Identification Number (NPWP)
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Building Permit (formerly IMB, now called PBG – Building Approval)
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Disturbance Permit (HO – Hinder Ordonantie)
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Business Identification Number (NIB)
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OSS account (Online Single Submission licensing system)
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Health Eligibility Certificate
After preparing the required documents, you can apply for permits through relevant government offices such as licensing and tourism departments. Homestay owners are also usually required to obtain approval from local neighborhood authorities (RT/RW).
4. Determine a Unique Homestay Concept
To attract tourists, your homestay should have a distinctive concept that sets it apart from competitors. This uniqueness can come from both the facilities and the design theme.
For example, popular styles such as industrial or Scandinavian design can make your homestay more appealing. Conduct market research beforehand to ensure the concept you choose has strong potential to attract guests.
5. Provide Complete Facilities
Running a homestay business means offering more than just a place to sleep—it’s about providing a comfortable experience. Make sure essential facilities are available, including:
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Bathroom or toilet
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Prayer area
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Dining area and utensils
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Other daily necessities
Adequate facilities will help guests feel more comfortable and enjoy their stay.
6. Maintain Cleanliness and Comfort
Cleanliness and comfort should always be top priorities in your homestay. Keep all areas free from trash, clean the rooms regularly after guests check out, and maintain the cleanliness of bathrooms and shared facilities.
Consistent maintenance will ensure guests feel comfortable and satisfied during their stay.
7. Conduct Market Research
Identify your target market before launching your homestay. Your target guests may include families, backpackers, or general tourists.
By understanding your audience, you can adjust your homestay design, rental price, and available facilities accordingly. The target market will also depend heavily on the location of your property.
8. List Your Homestay on Online Platforms
In today’s digital era, online platforms make it easier for travelers to find accommodation based on location, price, and facilities—while also helping you promote your property.
You can register your homestay on various accommodation platforms, whether free or paid, depending on the policies and partnerships offered.
Before choosing a platform, conduct some research. Prepare an attractive description and high-quality photos to showcase the best features of your homestay. When setting prices, remain competitive without drastically lowering them, and strengthen your competitiveness by offering facilities that your competitors do not provide.
9. Create an Effective Marketing Strategy
Promotion plays a crucial role in the success of a homestay business. No matter how comfortable your accommodation is, it will be difficult to attract guests if people are unaware of it.
You can promote your homestay through:
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Social media content
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A dedicated website optimized for search engines
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Seasonal discounts or special offers
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Collaborations with influencers
These strategies can help expand your reach and attract more guests.
10. Provide Excellent Service
In addition to facilities, service quality is equally important. Be friendly when welcoming guests and respond quickly if they encounter any issues during their stay.
Providing a positive and enjoyable experience will leave a lasting impression and encourage guests to recommend your homestay to others.
Those are some useful tips for starting a homestay business successfully and increasing your potential profits. With proper planning and continuous development, a homestay business can become not only a profitable venture but also a valuable long-term asset.
Besides preparing your business strategy, it is also important to plan for financial needs that may arise during development, such as renovations or additional facilities. If your available funds are not sufficient, financing solutions from BFI Finance can help.
Through BFI Finance’s financing services with collateral such as motorcycle BPKB, car BPKB, or house/shop certificates, you can support the development of your homestay business with a transparent process. BFI Finance is licensed and supervised by Indonesia’s Financial Services Authority (OJK), so you can confidently meet your financial needs because #ThereIsAlwaysAWay with BFI Finance.
