Upscale student hostels & PGs – a big untapped opportunity in India

In India May-June can be horrific months for parents of children who are seeking admissions to professional courses. In my state of Karnataka we had a re-exam for one subject (2nd PUC / XIIth) as  paper had leaked. After that you had a minimum of two exams to attend – CET and ComedK (all other exams are for minority number of students). By the time our children finish these exams they are exhausted.

After exams starts the real tension. If you want a seat in a good college for a good course you have to be amongst the top 100s. Not easy. Many parents would like to wait for the results of CET and ComedK before they pay up for the management seats.

Admission process is a nightmare in most colleges. Students and parents are made to run around pillar to post, room to room to complete the process of admission. Then comes the real trouble for out of station students – accommodation. I went around to see PG (paying guest) accommodation in Koramangala area in Bangalore for a niece of mine.

Paying Guest in Bangalore

Paying Guest in Bangalore. Warning: Photo is DECEPTIVE

We got leads from friends and we used classified sites to get some leads. One name was repeatedly being referred, searched for it on the net and the photos (see above) were very reassuring. I told my niece before leaving the house – If the PG is anything like what we see we are lucky.

The photo was completely misleading to put in a mild way. When we went to that PG it was in tatters. Slowly we saw every PG meant for students was almost in the same state. Most of them charged Rs 5,000-6,000 per month (approx $100/month).

I wasn’t able to find any high end PGs/hostels. There are so many parents who are willing to pay Rs 10,000 to Rs 15,000 a month for something that is clean and decent. Not asking for luxury because they are not entitled for it but why not give our kids something decent?

I strongly believe there is an opportunity for an entrepreneur to start a higher end PGs/hostels. One should not start this to get funding from VCs as they will be asked about scaling the business across the city and country. Not happening.

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