Hospitality & Coliving: How Urbanisation Shapes Business Models.

Urbanisation is changing not just where people live, but how they live, work, and spend and that’s reshaping hospitality and coliving businesses. Below is a human-friendly explanation of the forces at work, real-world examples (India + global), figures you can quote, and clear suggestions for infographics to add to the post or slide deck.

The big picture: cities are getting bigger and faster

More people are moving to cities worldwide, and the trend is set to continue: the UN projects ~68% of the global population will live in urban areas by 2050. India is in the middle of this shift too: urban population has been rising steadily (World Bank urban population data). Rapid urban growth means huge, concentrated demand for housing, short-stay hospitality, workplace adjacent lodging and flexible living solutions.

Why this matters for hospitality and coliving:

• Cities face housing shortages, unaffordable rents, and stressed infrastructure all of which create demand for flexible, integrated living (short leases, shared amenities, managed services).

• Hospitality firms that can flex supply (short stay rooms, managed apartments, contactless services) and coliving operators that offer affordability + community are well positioned.

“Urbanisation by the numbers” UN projection (68% by 2050)

How urbanisation changes the customer and the product mix

Urban populations skew younger, more mobile, and more likely to rent or adopt flexible living. This changes customer needs:

• Hospitality (hotels + short-stay): business travel and leisure still matter, but a large chunk of urban demand is now bleisure, corporate travelers on long projects, and digital nomads who want hotel like convenience with longer stay pricing and local neighbourhood experiences. Hotel chains respond with serviced apartments, subscription stays, and co-branded experiences.

• Coliving: targets young professionals and students who value lower cost, convenience, and community. Coliving bundles rent + utilities + services + common spaces and often offers flexible lease terms (month to month or short windows). This directly addresses the two pain points of urban living: affordability and social isolation.

• Hybrid plays: hospitality operators (and some proptechs) now run both hotel inventory and managed coliving units to capture demand across short and medium stays.

Real-world examples (India + global):

• Zolostays (India): one of India’s largest coliving brands; aggressive bed-rollout plans demonstrate investor and tenant appetite for managed shared housing across cities.

• OYO Life / OYO’s coliving offers: OYO expanded into managed rooms/coliving to capture long-stay urban demand alongside its hotel inventory. This is an example of a hospitality brand extending into coliving to capture broader urban demand.

Market size & economics why investors and operators care

Coliving is a fast growing niche within real-estate and hospitality. Estimates vary by source and definition, but recent market research shows a multi billion dollar global opportunity:

• A widely cited report estimates the global coliving market at ~USD 7.8 billion in 2024, with projections to ~USD 16+ billion by 2030 (high teens CAGR). (Other forecasts using different assumptions produce higher totals, but they agree on strong, double-digit growth.)

Why the economics can work:

• Higher yield per unit: Managed, furnished units rented by bed or by room often command higher yield per square foot than traditional long term rentals.

• Lower upfront cost for tenants: Everything included and shorter commitment attracts tenants who cannot afford large deposits or long leases.

• Scale & tech: Proptech based operators use centralized booking, revenue management, and digital onboarding to lower operating cost per unit and increase occupancy turnover.

But: operators must manage capex (furnishing), churn (tenant turnover), and compliance (local housing laws). Market winners combine asset light models (management contracts) with strong operations to control cost and quality.

Coliving economics at a glance

City	Co-living rent (₹/month)	1 BHK rent (₹/month)	Cost Advantage
Bengaluru	11,700–23,700	15,500–36,500	25–35%
Mumbai	15,200–27,500	19,000–42,000	20–35%
Delhi-NCR	11,300–24,000	15,000–37,000	25–35%
Hyderabad	10,500–17,300	14,000–26,500	25–35%
Chennai	9,000–14,000	12,000–21,500	25–35%
Pune	9,500–15,700	12,700–22,500	25–30%

The chart uses midpoint values from published rental ranges for visual comparison only. Actual rents vary by location, amenities, and operator.

Urbanisation forces that reshape business models (5 practical impacts)

1. Demand density enables variable pricing & yield management. Operators price dynamically by neighborhood and length of stay (hotels use this; coliving can, too).

2. Flexibility as a product: Month-to-month leases, plug-and-play furniture and subscription services become a selling point. Hospitality firms offer “stay packages” and coliving platforms offer membership models.

3. Technology first operations: Digital onboarding, IoT for utilities, and centralized maintenance reduce cost per bed/room. AI-driven matching and churn prediction help keep occupancy high.

4. Asset-light scaling: Many brands choose management contracts instead of buying real estate faster scale, lower balance-sheet risk. Zolostays, for example, grew via asset management models across cities.

5. Sustainability and infrastructure pressure: Rapid urban growth means cities need huge infrastructure investments (World Bank estimates India will require trillions by 2050). Operators that are energy-efficient or partner on resilient infrastructure will face fewer headwinds.

Risks & what operators must get right

• Regulation & local zoning: short-term rentals and shared housing face different rules in different cities. Compliance is essential.

• Unit economics sensitivity: high furnishing costs and turnover can erode margins. Scale and tech lower these risks.

• Community & safety: coliving succeeds when resident experience is good poor community management equals bad retention.

• Macro shocks: urban job slowdowns reduce demand quickly flexible contract design and diversified customer mix mitigate this.

Quick, case studies

Zolostays (India) scaled quickly across 19+ cities by managing and standardizing shared units, focusing on affordability and student/young professional segments. Plans to add tens of thousands of beds signal strong investor and consumer interest in managed coliving.

OYO Life (India) / OYO’s coliving experiments OYO leveraged hotel operations expertise to provide furnished long-stay rooms and coliving options, showing how hospitality firms can extend into urban housing by re-using systems for housekeeping, revenue management and distribution.

Key Takeaway: Understanding Urban Hospitality & Coliving Models

Urban hospitality and coliving models work best when they respond to core city challenges such as affordability, mobility, and flexible living needs. Business designs that offer adaptable pricing, short-term commitments, and bundled services are better aligned with how people live and work in cities today.

Operational efficiency is equally important, as high density urban settings require technology led systems to manage turnover, costs, and customer experience. Regulatory fit, sustainability, and a diversified user base students, young professionals, and long stay residents also play a critical role in explaining why some models scale more effectively than others in rapidly urbanising environments.