Zostel Jaipur was Zostel's second pilot property launched in October 2013 with 27 beds. It achieved operational breakeven within 2 months at 34% occupancy. Monthly operating expenses are approximately INR 1.66 lakhs with rent, salaries and utilities as major costs. Revenue averages INR 3-4 lakhs monthly with 40-50% operating margins. Over 75% average occupancy is achieved with bookings mainly from foreign backpackers from UK, USA and Australia aged 18-35. The property provides positive cash flows with a payback period of 7 months.
2. Zostel
Table of Contents
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
3. Backpackers’ Market
Market Definition – Who are backpackers?
Backpackers are low-cost leisure travelers with typically the following
characteristics:
• A preference for budget accommodation
• An emphasis on meeting other travellers
• An independently organized and flexible travel schedule
• Longer, rather than brief, holidays
• An emphasis on informal and participatory holiday activities
Source:
1. beforeyoubackpack.com; www.holidaysafe.co.uk
The concept is pretty popular, especially among young travelers, who
move out of their native places for a few months to explore the world.
Some of the biggest segments among backpackers are:
• Gap year travellers – The ones who take a gap year after college to travel the world
• Career breakers – Travellers who are on sabbatical or those who have taken time off
their careers to travel the world
Backpackers generally rely on internet forums, websites and word of mouth from
the community of fellow backpackers for designing their trip itinerary with limited
influence of travel agents and other package tour providers.
4. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
5. Backpackers’ Accommodation
Market Size and Growth – Global Market
Because of the peculiar requirements, given an option, backpackers prefer to stay at non-traditional and budget-friendly
stay options such as hostels, couch-surfing or Air BnB where they get to stay in a social, casual environment and get a
chance to interact with fellow backpackers.
The backpacker accommodation market is very well developed in Oceana (New Zealand and Australia) and Europe
while Asia is also catching up fast with a number of backpacker hostels coming up in South East Asian countries such as
Thailand, Vietnam and Malaysia
Source:
1. WYSE Travel Confederation, New Horizons III (Sept. 2013)
Backpackers with Avg.
Daily Expense >$33
40%
Average Trip
Duration
58 days
Total Trip Spend
$3,300
1 2 3
Most preferred
Stay option
Hostels (32%)
4
2013
2007 52 days $2,350 Hostels (31%)28%
Key
backpacker
stats1
The total global market size for youth travel stood at around $183 billion as of 20121
6. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
7. There is a
complete
white space
in upcoming
and rapidly
growing
backpacker
destinations
of Asia and
South
America –
target
markets for
Zostel
Backpackers’ Hostel Chains
Competitive Landscape – Global Market
There is a huge untapped potential for backpackers’ hostels in rapidly growing Asian and South American
markets
Source:
1. Zostel Research and Analysis
A&O
Hostels
Loki
Hostels
Plus
Hostels
Meininger
Hostels
HighLow
Low
High
Market Growth
Reach(#ofHostels)
Generator
Hostels
Equity Point
Hostels
Nomads
Hostels
Base
Hostels
USA
Hostels
K’s
Hostels
Lub d
Hostels
Most of big
hostel
chains are
operating in
European
and Oceana
Market – a
market
that’s
getting
saturated
fast
Note: Bubble Size
denotes bed
capacity of particular
hostel chain
Zostel
8. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
9. Indian Leisure Travel Market
Market Size and Growth – India
As per various independent reports such as World Travel and Tourism Council, India is one of the fastest
growing tourism market in the world – making it a tourism powerhouse in the next decade
• At 9% - India’s FTA (foreign tourist arrival) growth rate is already double the global average
Source:
1. World Travel and Tourism Council
Incredible India1
10. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
11. Independent units – no
cross selling
Non-Existent
Quite cheap but still
expensive than hostel
Obscure, off-center
locations – difficult to
find and commute
Major Problem Area
Backpackers’ Accommodation
Competitive Landscape – India
In India, Backpackers have to stay in filthy lodges as that’s the only option fitting their modest budget
• Zostel, being India’s first and only world-class backpacking hostel chain is clear market leader filling
this gap and is the only major brand in Indian backpacking space
ServiceParameters
Accomm. Options
Youthful
Ambience,
Branding &
Engagement
Affordability
Location
Lodges and
Guesthouses
Cross-Selling
Opportunity Possible only in case
of chains
Somewhat possible
because of chain effect
Independent units –
no cross selling
1-3 Star Hotels YHAI Hostels
Standalone Small
Hostels
Zostel Hostel
Chain
Hygiene and
Security
With presence at
various tourist spots,
its highly prevalent
Very formal –
focused on families &
business travelers
Non-Existent – No
innovation in decades
of its existence
Very much there
except lack of brand
Strong branding with
focus on creating fun,
youthful atmosphere
Expensive for
backpackers
Dirt cheap but hardly
any facility
Very affordable Very affordable
Off the center Obscure locations Decent locations but
away from main areas
Bang at center –
amidst the action
Pretty Decent Major Problem Area Pretty Good,
though security
isn’t that great
Full focus on
hygiene and
security of guests
Source: Zostel Research and Analysis
12. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Product and Market Presence
Milestones Achieved
Brand Reach
Team
13. Zostel
Product and Market Presence
Product Description Footprint in March 2015
Nov’14, 120
Oct’14, 60
Oct’13, 25
Aug’13, 25
Jul’14, 56
Nov’14, 70
Legend
(x,y): (Launch Month, # of beds)
Leased
• One line: Hygienic, Secure & Centrally located acco. at
INR 349-499 per bed and INR999 per room
• Facilities: Dormitory with bunk beds, common room with
entertainment facilities, library, community kitchen
• Features: AC, Wi-Fi, Pvt. Lockers, Regular Events
• Model: First 7 properties are leased; now expansion via
partnerships
50 Beds to 450 Beds (9x) in 7 cities in <6months
Sept’14, 75
14. Zostel
Product and Market Presence
The First Chain of Backpacker’s Hostels in India providing hygienic, secure and centrally located
accommodation at affordable prices
15. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Product and Market Presence
Milestones Achieved
Brand Reach
Team
16. Zostel
Milestones Achieved
With presence across 7 cities across 5 states, Zostel Passport programme is used to get
discounts in their multiple stays; significantly improving customer loyalty and repetition
Approx. 60% of bookings made directly through our website; Strategic usage of
Adwords marketing to drive traffic
Partnership with youth organizations such as AIESEC; Brand ambassadors in
50+ colleges
With domestic and International players - India Someday, Kilroy Travels
and travel companies - Virasat, Padharo, Red Panda & Dare the
Himalayas
Best Internship Ever: Partnered with MTV, Redbull to deliver the
biggest campaign for H1 2014; 70K+ applications from pan-India
Best Value Leisure Product Award at the Travel &
Tourism Fair 2015; HOSCAR for best Hostel in India
54K+ Organic Likes with a reach of 9 million
people through FB page; highly active on
Quora, Twitter
Hostelworld rating: 90%+; Listed on
10+ portals
#1 on TripAdvisor for
most properties
within 2 months
Zostel Pan-India
Passport
Website Booking/
Adwords
College Festivals
Travel partners
Best Campaigns
Awards
Social Media
OTA Listings
Tripadvisor
17. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Product and Market Presence
Milestones Achieved
Brand Reach
Team
18. Zostel
Best Internship Ever – Best Campaign for 2014
• Campaign design/Tech/Marketing ensure
virality across social media
• Cool website & Multiple videos to engage
youth
• Reach 3L youth from 550 colleges via social,
email and traditional print media
• Youth centric channels like Times Group,
Hindustan Times, Yourstory, Campus Diaries
Maximum organic reach
80,000 participants for 4
months
Proprietary property of
Zostel
Pre Launch Promotion: Post Launch Traction:
• 80,000 registered Users, 45:55 Women!
• 10,00,000 unique visitors, Significant mobile
users
• 30MM impressions on facebook
• Sponsors and Partners - MTV, Redbull,
American Tourister, Holiday IQ
Best Internship Season 1 – Able to garner sponsorship 15Lakh+
Best Internship Season 2 – to go on Air!
Best Campaign of H1 2014 - http://www.socialsamosa.com/2014/07/social-media-campaigns-half-
yearly-review-2014/
20. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Product and Market Presence
Milestones Achieved
Brand Reach
Team
21. Zostel
The Team
Dharamveer
(IIM Calcutta)
Tarun
(IIM Calcutta)
Akhil
(IIM Calcutta)
Abhishek
(IIT-BHU)
Chetan
(IIT-BHU)
Paavan
(IIM Calcutta)
Siddharth
(MDI, DCE)
Technical Head,
Recruitment
and Marketing
Content &
Digital
Marketing,
Operations
Business
Development,
Operations
Operations &
Property
Management
Operations &
Property
Management
Investor
Relations and
Sales
Recruitment,
Sales and
Finance
Other team
members
• Graphic Designer from NIFTs and Technical Team from IITs
• Core Team from IIMs, IITs and other best Management and technical Institutes; Experience of
working in biggest MNCs of the world
• Interns from best colleges across country (IITs, DU, NIFTs, etc)
Zostel team is winner of 14/14 Business Plan competitions globally including Wharton India Economic Forum, Richard
Ivey Canada, IIT-Bombay Eureka, Launchpad IIM-Calcutta etc.
22. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Zostel Jaipur
Zostel Udaipur
Zostel Varanasi
Zostel Goa
24. Zostel Jaipur
Case Study
Zostel Jaipur – Overview
Property
Description
Zostel Jaipur was launched on 20th Oct 2013 in Civil Lines Jaipur in an empty 4 BHK floor taken on 3
year lease
Jaipur property was Zostel’s 2nd pilot property bootstrapped by founders with an initial budget of INR
12.5 lakhs
The premises has one 8-bed mixed dorm, one 6-bed mixed dorm, one 8 bed female only dorm and
one 3-bed private room – a total of 27 beds along with 5 showers and 5 western toilets
Zostel Jaipur has one huge common room cum reception and two open hangout areas along with a
terrace; the property also houses a community kitchen
Ac, ,Fridge, & Washing Machine Beds, Mattresses & Linen
Painting and Repairing Common Room
Kitchen set-up Front Desk
Capex – Breakup
(INR lakh, %)
Since the property was empty for a long time, painting and
general repair came out to be the biggest expense head at
INR 4 lakh
This also included construction of 2 showers and 2
WCs at around 2.5 lakhs
The cost of a bed, mattress & corresponding linen is
generally around INR 12 thousand per bed
This translates into INR 3.3 lakhs for 27 beds
At one AC per dorm and one refrigerator for community
kitchen, it was our 3rd biggest cost head
4 L
(33%)
3.3 L
(27%)
1.3 L
(11%)2 L
(16%)
1 L
(8%)
0.6 L
(5%)
100% = INR 12.2 lakhs
Note: The financials mentioned are approximate
25. Zostel Jaipur
Case Study
Salary, Utilities (electricity and Internet bill) and property
rent are the biggest monthly operating expense (opex) for
Zostel Jaipur
Zostel Jaipur opex is 1.5-1.7 lakhs/ month
The property employs 1 property manager, 1 front
desk staff, 1 full time house keeping staff & a
security guard
The property operationally breaks-even at an occupancy
of 34% at an avg. revenue/ customer of INR 600/bed
night – accomplished within 2 months of launch date
Miscell.,
24k, (15%) Salary
47k, (28%)
Utilities
30k, (18%)
Rent
27k, (16%)
F&B
30k, (18%)
Maintenance
8k (5%)
Note: Based on Oct 2014 to Feb 2015 Data
100% = INR 1.66 lakhs
Monthly Op-Ex – Breakup
(INR, %)
Zostel Jaipur is one of the most profitable property under
Zostel brand umbrella
The property invariably earns a revenue between
INR 3-4 lakhs with an operating margin of about 40-
50%
Average occupancy of Zostel Jaipur remains at around 75%
– fluctuating between 50% in off-season to over 100% in
peak season
Pay-back period for the property was 7 months
2.8 2.7
3.8
3.0
2.5
1.6 1.7 1.9 1.6 1.4
Oct-14 Nov-14 Dec-14 Jan-15 Feb-15
Revenue Op. Expenses Op. Margin
41%
36%
49% 47% 43%
Financial Snapshot
(INR Lakhs)
Operational and Financial Snapshot
Note: The financials mentioned are averaged out numbers and may vary slightly
26. Zostel Jaipur gets over 40% bookings directly through its website underlining the brand strength of Zostel in backpacking
accommodation market
Over 80% tourists comprise foreign backpackers – UK, USA and Australia being the biggest contributors; most of the tourists
are in 18-35 year age bracket
Zostel
Website
41%
Other
Sources
59%
Zostel Jaipur
Case Study
India
18%
UK
18%
USA
12%
Australia
11%
Germany
4%
Others
37%
Note: Based on Oct 2014 to Feb 2015 Data
• Rank 1 out of 228 properties on
TripAdvisor within 2 months of
launch till date
• 163 reviews out of which 134
excellent and 28 very good with
just 1 average till date
• Awarded HOSCAR 2015 for
‘BEST HOSTEL’ in INDIA
• 185 reviews with an overall
rating above 90%
Awards and
Customer
Reviews
Customer Demographics & Booking Source
Customer – By Booking Portal Customer – By Country of Origin
Note: The numbers mentioned are averaged out over the period of operation of the property
27. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Zostel Jaipur
Zostel Udaipur
Zostel Varanasi
Zostel Goa
29. Zostel Udaipur
Case Study
Property
Description
Zostel Udaipur was launched on 27th June 2014 at Nav Ghat – located right over lake Pichola and
sharing one wall with Udaipur City Palace
Udaipur property was Zostel’s 3rd property (1st post funding) started out at an investment of INR 22.5
lakhs
The premises has one 8-bed mixed dorm , four 6-bed mixed dorms, one 6-bed female only dorm and
five 2-bed private room with total capacity of 48 beds
Zostel Udaipur has a huge rooftop restaurant cum common room and a terrace area with arguably the
best lake view possible in Udaipur
Ac, ,Fridge, & Washing Machine Beds, Mattresses & Linen
Painting and Repairing Common Room
Kitchen set-up Front Desk
Capex – Breakup
(INR lakh, %)
The property, although new, had some major issues with
plumbing and electrical work, hence, painting and general
repair came out to be the biggest expense head at INR 8 lakh
Property already had restaurant furniture and most of
the equipment needed for running a restaurant
The cost of a bed, mattress & corresponding linen is generally
around INR 12-14 thousand per bed
This translates into INR 7.3 lakhs for 48 beds
Restaurant Kitchen and common room were the other biggest
cost heads
8 L
(36%)
7.3 L
(33%)
0.5 L
(2%)
2 L
(9%)
3.7 L
(16%)
1 L,
(4%)
Zostel Udaipur – Overview
100% = INR 22.5 lakhs
Note: The financials mentioned are approximate
30. Financial Snapshot
(INR Lakhs)
Zostel Udaipur
Case Study
Salary, F&B (because of restaurant) and property rent are
the biggest monthly operating expense (opex) for Zostel
Udaipur
Property’s opex is INR 4.3 lakhs/ month
Property employs 1 property manager, 1 front desk
staff, 3 house keeping staff, 4 restaurant staff & a
security guard
The property operationally breaks-even at an occupancy
of 38% at avg. revenue/ customer of INR 850/bed night
(due to more private rooms and full fledged rooftop
restaurant) – accomplished within 1 month of launch date
Miscell.,
15k, (4%)
Salary
77k, (18%)
Utilities
30k, (7%)
Rent
150k, (35%)
F&B
135k, (32%)
Maint.
20k, (5%)
Note: Based on Sept. 2014 to Feb 2015 Data
100% = INR 4.3 lakhs
Monthly Op-Ex – Breakup
(INR , %)
Zostel Udaipur was the first bigger Zostel after Jodhpur and
Jaipur pilot projects
The property generally earns a revenue between
INR 5-11 lakhs depending on the season with an
operating margin of about 40-50%
Average occupancy of Zostel Udaipur remains at around
60% – fluctuating between 50% in off-season to over 100%
in peak season
The pay-back period for the property was 7-8 months
3.4 8.2 5.6
10.8 8.0
7.1
3.7 4.4 4.5 4.7 4.4 3.9
Sep/14 Oct/14 Nov/14 Dec/14 Jan/15 Feb/15
Revenue Op. Expenses Op. Margin
-14%
48%
55%
45%
48%
20%
Operational and Financial Snapshot
Note: The financials mentioned are averaged out numbers and may vary slightly
31. Zostel Udaipur gets around 50% bookings directly through Zostel website followed by other portals
About 65% guests are foreign backpackers – UK, Australia and USA being the biggest contributors; Zostel Udaipur hosts
highest percentage of Indian backpackers among all Zostels
Zostel
Website
48%
Other
Sources
52%
Zostel Udaipur
Case Study
India
36%
UK
16%Australia
9%
USA
6%
Germany
4%
Others
29%
Note: Based on Oct 2014 to Feb 2015 Data
• Broke to #1 within 2 months of
launch; Currently ranked 4 out of
95 properties on TripAdvisor
• 110 reviews out of which 97 are
excellent or very good
• 100% rating on Hostelbookers
• 78 reviews with an overall rating
of 88% on HostelWorld
Awards and
Customer
Reviews
Customer Demographics & Booking Source
Customer – By Booking Portal Customer – By Country of Origin
Note: The numbers mentioned are averaged out over the period of operation of the property
32. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Zostel Jaipur
Zostel Udaipur
Zostel Varanasi
Zostel Goa
34. Zostel Varanasi
Case Study
Property
Description
Zostel Varanasi was launched on 15th Oct 2014 at Luxa Road in Varanasi – 10 minutes walk away
from Dashwamedh Ghat – the main ghat of Varanasi
Varanasi property was Zostel’s 6th hostel – started out at an investment of around INR 25 lakhs and a
set-up period of 2 months
The premises has three 8-bed mixed dorms , four 4-bed mixed dorms, one 4-bed female only dorm
and four 2-bed private room with total capacity of 52 beds
Zostel Varanasi has the biggest common room among all Zostels and a huge covered rooftop
hangout area with a kitchen
Ac, ,Fridge, & Washing Machine Beds, Mattresses & Linen
Painting and Repairing Common Room
Kitchen set-up Front Desk
Capex – Breakup
(INR lakh, %)
The property, was an old running hotel and hence had to be
majorly worked upon including adding an additional floor and
altering some construction
As part of the deal, most of the civil work was done by
the owner before handing over the property on lease
(9 year)
The cost of a bed, mattress & corresponding linen is
generally around INR 12-15 thousand per bed
This translates into INR 7.5 lakhs for 52 beds
Common room (because of construction involved) was the
other biggest cost heads for Zostel
8 L
(33%)
7.5 L
(31%)
0.4 L
(2%)
6 L
(24%)
2 L
(8%)
0.6 L,
(2%)
Zostel Varanasi – Overview
100% = INR 24.5 lakhs
Note: The financials mentioned are approximate
35. Zostel Varanasi
Case Study
Again Salary & Rent constitute nearly two-thirds of the
total operating expenditure
Property’s opex is INR 2.8 lakhs/ month
Property employs 1 property manager, 2 front desk
staff, 3 house keeping staff & a security guard
The property operationally breaks-even at an occupancy
of 30% at an avg. bed price of INR 600/bed (averaged out
for private rooms) – accomplished within 2 month of
launch date
Miscell.,
21k, (7%)
Salary
92k, (33%)
Utilities
23k, (8%)Rent
90k, (32%)
F&B
36k, (13%)
Maint.
20k, (7%)
Note: Based on Nov. 2014 to Feb 2015 Data
100% = INR 2.8 lakhs
Monthly Op-Ex – Breakup
(INR , %)
Zostel Varanasi was the first Zostel outside our stronghold
of North India & Rajasthan
Being a very competitive market with another hostel
already holding the top spot, Zostel took 2 months
to capture the market and grab the top spot in
Varanasi
Average occupancy of Zostel Varanasi has remained at
around 65% in last 3 months
Pay-back period for the property is expected to be 12-15
months
1.4 2.6 5.0 3.7
2.8 2.8 2.8 2.6
Nov-14 Dec-14 Jan-15 Feb-15
Revenue Op. Expenses Op. Margin
-96%
Financial Snapshot
(INR Lakhs)
Operational and Financial Snapshot
-9.7%
44%
26%
Note: The financials mentioned are averaged out numbers over last 10 months
36. Zostel Varanasi gets 45% bookings directly through our website followed by HostelWorld and other sources
About 85% guests are foreign backpackers – mostly from UK, USA, Australia & China
Zostel
Website
45%
Other
Sources
55%
Zostel Varanasi
Case Study
India
15%
UK
26%
USA
17%
Australia
9%
China
8%
Others
25%
Note: Based on Nov 2014 to Feb 2015 Data
• Broke into top 3 within 2 months of
launch; currently ranked 1 out of 78
properties on TripAdvisor
• 115 reviews out of which a
whopping 101 are ‘Excellent’ and
rest being ‘Very Good’
• 98.7% rating on Hostelbookers
• 49 reviews with an exceptional
overall rating of 92% on
HostelWorld
Awards and
Customer
Reviews
Customer Demographics & Booking Source
Customer – By Booking Portal Customer – By Country of Origin
Note: The numbers mentioned are averaged out over the period of operation of the property
37. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Case Studies
Zostel Entrepreneurship Development Program
Appendix
Zostel Jaipur
Zostel Udaipur
Zostel Varanasi
Zostel Goa
39. Zostel Goa
Case Study
Property
Description
Zostel Goa was launched on 25th Oct 2014 at Candolim Beach – just 2 minutes walk from the beach
itself
Goa property was Zostel’s 7th hostel – started out at an investment of around INR 16 lakhs and a had
a set-up period of 3 months
The premises has two 8-bed mixed dorms , one 8-bed female only dorm, four 6-bed mixed dorms, one
10 bed non-ac mixed dorm and one 3-bed private room with total capacity of 61 beds
Beds, Mattresses & Linen Painting and Repairing
Common Room Front Desk
Capex – Breakup
(INR lakh, %) The property was built in Portugese Villa-style with open
area in front; however, it required addition of a few more
bathrooms and WCs
The property was taken on long term lease of 9 years
and has scope for adding one more floor
The cost of a bed, mattress & corresponding linen is
generally around INR 12-15 thousand per bed
This translates into INR 7.7 lakhs for 61 beds
Since the property was slightly old, painting and repairing
formed the another major chunk of initial Capex
5.8L
(35%)
7.7 L
(47%)
2.5 L
(15%)
0.6 L,
(4%)
Zostel Goa – Overview
100% = INR 16.6 lakhs
Note: The financials mentioned are approximate
40. 3.9
8.0 7.3
5.7
3.3 3.5 3.5 3.3
Nov/14 Dec/14 Jan/15 Feb/15
Revenue Op. Expenses Op. Margin
Zostel Goa
Case Study
Zostel Goa was supposed to be bigger with an extra floor.
However, due to some delays, the construction was pushed
to June 2015
Hence, the number of beds decreased but the rent
didn’t decrease proportionately – making rent a
whopping 44% of Op-Ex
Property employs 1 property manager, 1 front desk
staff, 2 house keeping staff & a security guard
Zostel Goa operationally breaks-even at an occupancy of
31% at an avg. bed price of INR 600/bed– accomplished
within 1st month of launch
Miscell.,
10k, (3%) Salary
97k, (29%)
Utilities
36k, (11%)
Rent
150k, (44%)
F&B
18k, (5%)
Maint.
28k, (8%)
Note: Based on Nov. 2014 to Feb 2015 Data
100% = INR 3.4 lakhs
Monthly Op-Ex – Breakup
(INR thousand, %)
Goa, being the party capital of India was an obvious choice
to start Zostel and to carry on expansion further South
Goa already had a few standalone hostels making it
a very tough market to get into
We started Zostel in Goa after great demand from our loyal
Zosteler community
Hence, within a month, we were profitable
Expected pay-back period for the property is 10-12 months
Financial Snapshot
(INR Lakhs)
Operational & Financial Snapshot
53%
41%
57%
15%
Note: The financials mentioned are averaged out numbers
41. Zostel Goa is a unique Zostel being the only one where Indian backpacker influx in more than foreigners
Another major highlight is the fact that more than 50% of the bookings for Zostel Goa are done directly through our website –
reducing dependency on other OTAs
Zostel
Website
56%
Other
Sources
44%
Zostel Goa
Case Study
India
62%
UK
10%
USA
6%
Australia
3%
Others
19%
Note: Based on Nov 2014 to Feb 2015 Data
• Currently ranked 2 out of 142
properties despite presence of
various well established Hostels in
the same area
• 52 reviews out of which a whopping
48 are ‘Excellent’ and rest 4 being
‘Very Good’
• 94.3% rating on Hostelbookers
• 39 reviews with an exceptional
overall rating of 93% on
HostelWorld
Awards and
Customer
Reviews
Customer Demographics & Booking Source
Customer – By Booking Portal Customer – By Country of Origin
Note: The numbers mentioned are averaged out over the period of operation of the property
42. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Zostel Entrepreneurship Development Program
Case Studies
Appendix
Zostel Offerings
Deliverables
Review Policy
43. Zostel Offerings
Bookey of Benefits
Property management
software
Channel manager
Direct booking portal on
website and mobile app
Virtual Front Desk
Accounting Tools and
Support
Upto INR 10 lakhs of
direct financial support
The exact quantum
will be based on
achieving review
targets on
TripAdvisor,
HostelWorld and our
mobile app; details
to be discussed in
advanced stages
Seamless integration on all
online and offline Zostel
marketing channels
Listing on over 10 Online
Booking Portals
Complete OTA (Online
Travel Agents)
management by central
sales team
Organization level tie-ups
with International travel
agents and other
travel/backpacking focused
organizations
Training for Front Desk
Staff and property
manager
On-site training at
existing Zostel properties
On-boarding guidance
and supervision
Brand specifications and
Zostel vendor list
Financial OperationsTechnology Marketing & Sales
44. Zostel Offerings
Core Strengths
Market Leaders in Indian Budget Leisure Traveller Market
Dynamic & Young Management Team
Extremely Quick Implementation
Vast Hospitality Knowledge of > 30 years
Robust Marketing & Sales
Entrepreneurial Zeal
1
2
3
4
5
6
45. Zostel Offerings
Support to Partners
1
2
3
4
5
6
Market Study & Site Evaluation
Property Setup Assistance
Vendor Sourcing
IT & Financial Audit
Central/Local Sales/Marketing
Hiring/Training 24x7 support
46. Zostel Offerings
The Process
1
2
3
4
5
6
Registration through #beyou campaign
Brief Telephonic Conversation with the Prospective Partners
Detailed Telephonic Conversation with Shortlisted Prospects
Face-to-Face meeting in Delhi & Contract signing
Property Selection & On-Boarding
On-Going Governance
47. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Zostel Entrepreneurship Development Program
Case Studies
Appendix
Zostel Offerings
Partner Deliverables
FAQs
48. Partner Deliverables
Terms and Conditions Overview
Periodic Review System
Zostel is proud to be one of the finest hostel
chains – a fact testified by our online reviews
and various awards
To maintain the customer trust and high
service standards we are associated with, we
would be periodically reviewing the customer
feedback
Ancillary Service Approval
Zostel was set-up with a vision to change
the way India is experienced – making
travel an affordable, enjoyable and scam
free exercise
To ensure that the ancillary services
(such as taxi service, ticketing, city tours
etc.) offered are genuine and not
overpriced, we would want Zostel’s
approval before rolling out such a service
and continuous review thereafter
Zostel Website Booking Fees
Our central team will offer support for all
technical, marketing, sales and branding
needs
For direct bookings from Zostel website
or mobile app, we would charge a 15%
commission
However, till the point property
operationally breaks-even for first time,
the commission is waved off
Lock-in – 3 years
We expect a lock-in period of 3 years in
lieu of the knowledge transfer and on-
going support on various fronts
49. Zostel
Market Overview
Global Market – Size and Growth
Global Market – Competitive Landscape
Indian Market – Competitive Landscape
Indian Market – Size and Growth
Zostel – Product Description
Zostel Entrepreneurship Development Program
Case Studies
Appendix
Zostel Offerings
Partner Deliverables
FAQs
50. Zostel
FAQs
Thank You
What is the likely pay back period for the capital invested?
Is there any Security Deposit that Zostel will take?
Do you currently have detailed operating manuals?
Where is the staff training provided?
Will someone from Head Office provides assistance to the partner
in opening the property?
Would IT systems that you presently have be included in the
agreement? Do you have a standard agreement?
How long is the partnership term for? And is the term renewable?
Is there any lock-in period?
7- 15 months
No
Yes
At current
Zostels
Yes
Yes
3 years & Yes
Yes , 3 years
1
2
3
4
5
6
7
8
51. “Twenty years from now you will be more
disappointed by the things that you didn't
do than by the ones you did do. So throw
off the bowlines. Sail away from the safe
harbor. Catch the trade winds in your
sails. Explore. Dream. Discover.”
Interested in getting on-board ?
For further details, please contact:
Akhil Malik
akhil@zostel.com
PH: 07728897593