Room at the inns

It was a move that had Siddharth Janghu’s family and friends puzzled. Why did the youngster with a promising career at global financial services firm J.P. Morgan want to chuck his job and start a backpacker hostel chain? But Janghu was sure that guests would soon be streaming into his new establishments.

Zostel, the chain of hostels started by Janghu and six other co-founders who are all between the ages of 22 and 27, has certainly moved quickly into the fast track. The first property of the brand was launched on August 15, 2013 in Jodhpur, and it now has seven properties dotted around the country in places like Jaipur, Udaipur, Varanasi, Delhi, Goa and Agra.

“We started in August, and by mid-October we were ranked one in the speciality lodging category on the travel site TripAdvisor. In addition to getting fabulous reviews, we were breaking even operationally within two months of starting,” says Akhil Malik, co-founder and director, Zostel.

Step into The Hosteller in the smart Hauz Khas Enclave neighbourhood where you’ll soon spot the tagline ‘Your perfect pit-stop’. The aim here has been to create a relatively cheap and cheerful establishment, so you’ll find hip and splashy wall art created with stickers picked up from all corners of the globe. The Hosteller has another outpost in Jaipur’s upscale Shyam Nagar.

Youth hostels have been part of the travel landscape in the West for more than half a century. But now backpacker hostels are the new traveller digs checking into the Indian hospitality service space. With a mix of dormitories and private rooms, a raft of new hostels are cropping up in locations as far flung as Kanyakumari and Alleppey.

“The primary reason for these new establishments is that the hostel model has worked very well in the West and some Indian promoters are keen to ape it,” says Achin Khanna, managing director, South Asia, HVS, a global consulting and valuation firm. He adds that Meininger, a fast-growing German hostel chain, is also eyeing the Indian market. 

 

Also helping the sudden boom in hostel accommodation is technology. “In the age of technology, proprietors of hostels are using apps and websites to reach larger audiences,” says Khanna.

Expectedly, the new hostels are making their first moves in the tourist hotspots like Jaipur, Jodhpur, Udaipur, Agra, Goa and Kerala, and metro cities like Delhi.

Look at Vedanta Wake up!, a chain of backpacker hostels that currently has five properties in Kerala (Alleppey, Fort Kochi, Kovalam, Varkala, Thekkady) and one in Tamil Nadu (Kanyakumari). “Budget hotels in India have been taking the design sensibilities of their guests for granted,” says Rishabh Gupta, director, Blanket Hospitality Ventures, which owns Vedanta.

He and his business partner, Aadil Muscatwala, both 31, started Vedanta Wake up! after quitting their jobs at Deloitte Consulting and Bank of America-Merrill Lynch, respectively, and heading off on a long holiday to Australia where they stayed at one youth hostel after another. “We had decided on a budget of 20 Australian dollars per night per person and that’s how our paths crossed with that of hostels,” says Gupta.

The biggest draw of all backpacker hostels is inevitably, their modest tariffs. Vedanta Wake up! charges Rs 500 per bed per night in an AC dormitory at all its properties. On the other hand, hostel group Moustache charges Rs 400 for non-AC dormitory beds and Rs 550 for beds in AC accommodation at its Jaipur establishment.

But the new hostel chains in India are attempting to pull off a difficult balancing act. They’re offering cheap accommodation but also aiming to pick up a relatively smart middle-class crowd. As a result, there’s a big emphasis on being meeting places where likeminded youngsters can hang out.
 

So, you have Wi-Fi zones and people can chill with comics or flip through issues of National Geographic at The Hosteller's library. Alternatively, at Zostel you can pick from city walks, pub crawls, food walks, open mike and karaoke. “You don’t come to a hostel because it’s cheap...  You enter a hostel thinking that you’ll meet 10 new people,” says Sridhar Rajagopal, a partner at The Hosteller.

Similarly, another outfit, Stops, calls itself a social and exploration-oriented chain of travellers’ hostels. Its first property opened in March 2014 in Varanasi and the second in Delhi in May.

The buzzing hub of Stops in Delhi is definitely the bar, which is, of course, a great place to meet. But it goes beyond that to bring people together by organising events of all kinds. One such event is the paint night, when people get together to sketch even if they haven’t laid a finger on a brush before.

“It is more than art; rather, it’s a de-stressing activity,” says Stops co-founder Pankaj Parwanda, who, in an earlier incarnation, was an account manager at Ericsson India. He and his wife Pallavi Agarwal, a qualitative consumer behaviour researcher, started Stops partly because they wanted to work in the travel industry and also since they loved the hostels they had stayed in during a trip to Europe.

Stops has enough activities to keep tourists busy. At its Varanasi hostel, guests can go on a boat ride at the crack of dawn at a subsidised rate. There are also Yoga sessions, cooking classes and massage routines. Evenings are jazzed up with Bollywood movie nights.

There’s another factor that adds to the attractions of staying in hostels. They come with communal kitchens, where guests can rustle up meals.

Interiors too, are a top priority for the hostel brands. So, Moustache, which started operating in Delhi on November 2013, has launched another design-based hostel in Jaipur on March 2015. “Our latest property can be compared to the best European hostels,” says Amber Jalan, founder, Moustache hostel.

So far, the hostels say they’ve got more foreign than Indian guests, The Hosteller, for instance, currently has 85 per cent international guests, but they expect this to change.

A huge number of Indians too are opting for this new budget accommodation. “Indians are giving value to shorter and more frequent vacations now, with youngsters leading the way,” says Khanna. For instance, Vedanta Wake up! has all kinds of guests — students, junior executives, couples and even families — flocking to its smart properties.

Many of the hostel chains seem to be well-funded although they decline to discuss where the money’s coming from. And, interestingly, they’re looking at aggressive expansions. “We’re using the volume of the room; the dormitory facility is vertical as opposed to the area. That’s why the numbers stack up,” says Gupta of Vedanta Wake Up!.

One company that has venture capital funding is Zostel, which has got $1 million from Presha Paragash, a Malaysian angel investor. It has also launched Zo Rooms, which is a budget hotel aggregator, and is also looking at using the franchisee model and opening 30 more properties in the next four months. What’s more, the brand is expanding abroad. “We’ve been invited by the chief minister of Uva province in Sri Lanka for a joint venture,” says Malik. He estimates that there’ll be a Zostel in Thailand, one in Vietnam and three in Sri Lanka this year.
 

Similarly, Stops will open outposts in Calcutta and Jaipur before the year-end. And Vedanta Wake up! aims to build tourism circuits by setting up clusters of hostels. “Guests usually have the tendency to come to a certain location and exhaust that region,” says Gupta. Vedanta Wake up! wants to concentrate on Kerala, Tamil Nadu and Karnataka so guests can move from one property to another.

Can the backpacker hostel model work in India? That’s still a question waiting to be answered. Sure, there could be pitfalls in India’s notoriously difficult tourism industry. And, there’s the question of whether low prices will draw the ‘wrong’ type of guest. In fact, some hostels admit they ‘filter’ guests. “We always have a security guard on the property. Also, the front desk employee can refuse guests. Sometimes families are told at the outset that this is a concept that they may not find appealing,” says Malik of Zostel.

Still the young hostel owners seem confident about the future. Says Malik ebulliently: “We want to create a backpacking revolution in India.”