Companies

Start-up Hosteller aims at six operational properties by March

Navadha Pandey New Delhi | Updated on January 22, 2018 Published on October 04, 2015

Targets backpacker travel segment

Do you backpack on a shoestring budget or enjoy mingling with people from across the world? A young start-up, Hosteller, aims to provide you with not just a bunk bed for ₹500 a night, but also serve you some culture curry.

The boutique hostel start-up, started by two 28-year-olds, Pranav Dangi and Amit Bhola, who left their corporate jobs to co-found ‘Hosteller’ in December 2014, also has on board Sridhar Rajagopal, 25, to handle branding and marketing.

The company takes properties on rent and refurbishes them with bunk beds, graffitiand entertainment infrastructure, among others, to cater to backpackers.

“We started with a hostel in Jaipur, since it attracts many tourists, both foreign and Indian. We had set a target of 50 nights in the first month, but we clocked 300,” Dangi said.

This was followed by opening a 31-bed hostel in Delhi in May this year, apart from tie-ups with institutions to attract travellers.

At the two properties combined, “we have clocked 1,500 backpackers and total 4,500 nights,” he added.

While this isn’t the first company to operate in this segment, with companies such as Zostel and Vedanta Wake Up, already present across India, Hosteller believes there is room to grow as the backpacker travel segment has started to pick up.

“This concept is successful abroad and will work in India, as guesthouses don’t have the infrastructure, service quality etc. We have a Whatsapp group with all major hostels in India. We don’t want to compete or fight on prices etc, but grow the category. We want to eliminate the guesthouse culture in India,” Rajagopal said.

Initially, the company believed that foreigners were their target market, since staying at hostels is already a successful concept in the West. “Our data, however, suggests otherwise. Currently, 54 per cent of bookings at Hostellers are from Indians,” he added.

Funding plans

Dangi and Bhola invested ₹35 lakh to start the company. “It will take us 18-24 months to break even,” he said.

The start-up plans to open another 70-bed hostel in Delhi. “We are looking to operate a total of six hostels by March 2016 and take it to 15 by March 2017,” Dangi said.

They are targeting Mumbai, Himachal Pradesh, Bengaluru, Goa and Udaipur.

The company is in talks with investors for a revenue-sharing model for each property. “An investor is already on board for the second Delhi property. We are expecting to close two more investors in a fortnight,” he added.

The company also plans to foray in the studio apartments category.

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Published on October 04, 2015
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