WudStay and the Houseboat Sector in India

This case deals with the challenges and dilemma faced by WudStay, a start-up engaged in the aggregation of different accommodation options in India. The company wants to evaluate the attractiveness and the challenges facing the houseboat sector and decide whether to enter this sector. The case illustrates the present state of the houseboat sector and captures the direction it is heading. Since its inception, the sector has remained unorganized, resulting in unsatisfactory customer service standards. The short-sighted approach of houseboat owners to maximize profits and refusal to adopt technological solutions has put doubts on the long-term health of this sector with many tourists looking for better alternatives. The sector is concentrated in two states in India: Jammu and Kashmir (J&K) and Kerala. The differences in the external-macro environment has taken the sector in these two states to completely different directions. In Kashmir, the deteriorating security situation has a negative impact on tourist inflows, thus reducing the demand for houseboats. In Kerala, the sector is on an upswing, with the government playing a catalytic role in promoting tourism and incentivizing houseboats through subsidies. In this background, WudStay wants to evaluate its long-term attractiveness and the opportunity of creating a sustainable value proposition in this sector.