Startup to Scaleup: Spotlight on The Hosteller, the game-changer in backpacking hostel space

Backpacking trips in India provide diverse and immersive experiences for adventure seekers on a budget. From the majestic Himalayas to the serene beaches of Kerala and the vibrant streets of Rajasthan, India offers accessible landscapes to these travelers, courtesy of the growing backpacker hostel sector.

To explore the topic of hostels in India further and to better understand their differences from hotels and homestays, Avni Raja from Editorji interviewed Pranav Dangi, Founder & CEO of The Hosteller.

About The Hostellers

Established in 2014, The Hosteller is a prominent backpacking hostel chain. Currently, it operates approximately 55 properties across India. The majority of its properties, around 45, are located in North India, with an additional 10 to 12 properties situated in South India.

Dangi, Founder & CEO of The Hosteller, revealed that the company has plans to expand the property count to 75 by March. He also emphasised the company's ethos, stating, "We don’t 'burn to earn' money," highlighting a focus on responsible business practices.

The Hosteller's demand picture

Speaking about the demand picture, Dangi said that the Hosteller clocks an average occupancy rate of 72%, which is significantly higher than the industry average. He also said that demand at most of the company's properties in popular destinations like Delhi and Goa don't see any seasonal dip. However, approximately 10% of the properties experience seasonal fluctuations in destinations like Rajasthan.

Homestays versus Hostels

Highlighting key differences between homestays and hostels, Dangi noted that homestay customers tend to be larger groups, while The Hosteller competes directly with hotels. Despite this competition, Dangi emphasised the company's strong strategy to differentiate itself in the market.

The Hosteller’s target group

When it comes to The Hosteller's target group, Dangi said that they have an inclusive approach, welcoming anyone above 18 years old. Remarkably, they have hosted guests ranging from young adults to individuals in their 80s.

Looking ahead, The Hosteller aims to evolve into a "house of brands" and intends to expand into the boutique hotel space, added Dangi.

Hosteller's fundraising plans

Discussing about the company's fundraising plans. Dangi mentioned that they have been actively seeking funds and noted challenges due to a funding slowdown in 2023. However, Dangi expressed optimism, stating that they are now receiving positive responses from investors and anticipate closing funding deals soon.