Since the start of the year, a sector that has been in the spotlight is the tourism sector. For various reasons, people from across the board have been talking about travel and hospitality.

We caught up with one of the startups that has been in the tourism space for quite some time to talk about the company, its plans and the rise of the sector in the country. Here are the excerpts from our interview with Pranav Dangi, founder and CEO, The Hosteller.

The Hosteller

“The Hosteller is India’s largest operating brand of backpacker hostels. We are building backpacker hostels which is inspired by the European concept of hospitality. And we are one of the first movers to start this segment in the country,” this is how Dangi described his startup.

He added that the company currently operates 55 different properties across India. “We are roughly in around 50 cities spread over 10 states in the country.”

Talking about the idea behind the company Dangi told Benzinga India that it came from his experience of travelling across India. “The need for this product in the country is that there is an absolute dearth of infrastructure within the three-star and below segment which is what we are trying to standardize. In budget hospitality, we want to offer high-quality services and a better hospitality experience for under ₹1000.”

Tourism Sector

While the sector has garnered a lot of attention in the past few months, it was also one of the worst affected when the pandemic hit. So we asked Dangi about the recent developments in the sector and how he sees it growing going ahead.

“The tourism industry after COVID has really picked up. We were the worst affected industry by COVID. However, the support of people in terms of revenge travel, in terms of India gaining more popularity, I would say the entire world has definitely helped the sector in coming up or rebounding at a much faster pace than any other sector. And we are capitalising on it as a company.

If you would see, the majority of our expansion has happened after COVID. And we are very positive and upbeat about the fact that the next few years, I would say the next five years are tremendous for this sector. There are a lot of opportunities that are coming our way, the entire political, financial and social stability in the country is promoting the sector a lot.”

A lot of the comeback in the sector in the past year has been attributed to revenge travel and pent-up demand, but Dangi believes that the pent-up demand is not there anymore. But he says there has been a noticeable shift in the lifestyle where people are willing to take more breaks and enjoy life. “The shift in the psychology of the country has happened where they have started taking breaks from their professional lives and are trying to have a better work-life balance. So people have moved towards improving the quality of life. And that to some extent has increased the demand for travel in the country,” he added.

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Expansion

As mentioned above, the CEO said that most of the expansion for the company happened after COVID-19. So we asked him about the company’s expansion plans going forward in terms of offerings and geographies.

“So, till now our primary audience has been anywhere from 18 to 35 years of age and the demand has always been high in this particular segment. Most of them are Gen Z, Millennials who are experimental people who want to travel every three months, though tight on budget.

However, a new product that we are soon going to launch will cater to the upper middle class plus a little bit of a higher class audience where our prices would range from ₹7500 up to ₹15,000 per night a room. So yes, we are expanding our target audience. We do not want to only cater to the 18 to 35 demographic.”

Talking about the hotspots and geographies that the company has been looking to expand and enter Dangi said, “So at this moment, our primary portfolio is heavily dependent on the northern part of the country. The company is now building itself in the southern part of the country as well.

We are coming up with new destinations like Gokarna in Karnataka, Vagamon and Varkala in Kerala. So, we are focused heavily on the southern part of the country for the next six months. Once we stabilize ourselves over there, then I think our portfolio will be equally divided between North and South. And early next year we plan to move to the northeast part of the country as well.”

The Numbers

The company plans to double its GMV (Gross Merchandise Value) to ₹100 crore and increase its total customers to 1.5 lakh for the year 2024. So we asked Dangi about the company’s plan to achieve this explosive growth.

“We want to by the end of this year become a pan India brand. Right now we are I would say in 10 states itself but by the end of this year, we should be at least in 17 to 18 states of the country. Our expansion is going to come through two brands or I would say three brands. Primarily the business or the reputation has been built from the Hosteller brand, but it is now time to make the entire company a house of brands. So our focus will be over there.”

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