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Hostel chain The Hosteller plans to add 75 new properties in the next 12 months, said its founder and CEO, Pranav Dangi. It is embarking on a fundraise of around ₹50 crore in the next 3-6 months for the expansion.
On the company’s growth strategy, Dangi said, “We want to be in every 50 km in the country..” He said the company aspires to be the world’s largest backpacker hostel chain, with 130-150 properties in the mid-term. It plans an IPO in the long term.
International venture
The Hosteller eyes Sri Lanka, Nepal, Thailand, Vietnam, and Cambodia for its international launch in late 2025. It seeks to capture backpacker flows in Southeast Asia, leveraging Thailand’s reputation as a backpacker hub.
In FY24, Dangi expects annual revenue of ₹55 crore with a net profit of around ₹4 crore — a reversal from the net margin loss in the previous year. The company has maintained EBITDA positivity for 18 months.
Dangi attributes the turnaround to strategic initiatives in the past year, including adding 18 to 20 properties, optimising revenue channels, and cost reduction. “The introduction of a dedicated tech team streamlined operations, eliminating cost centres and boosting revenue channels,” he said.
The Hosteller also introduced a special app that combines the features of BookMyShow (a ticket booking platform for movies and other events) with those of a travel app. It allows guests to choose and book different activities such as stand-up comedy shows, pub crawls, and so on when they reach the hostel. This approach, according to Dangi, led to increase in revenue by 20-25 per cent within a year.
New markets
The company sees opportunity in the largely unorganised Indian hostel market. Currently, only 15 per cent of the estimated 1,000 hostels in the country are organised under established brands. The company targets the remaining 85 per cent of independent and unbranded hostels.
The Hosteller offers a standardised yet unique hostel experience, Dangi said. Its properties range from “palace hostels” and “opera hostels” to those featuring amenities like pools and gyms. He said this makes his company the “Taj” of the backpacker hostel segment, aiming to deliver a premium experience within the budget-conscious market.
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