Zostel gets its strategy right

While the top end of Hotel Industry has well established names since long, recently there has been an increase in good names in budget and economy hotels segment as well. With the emergence of Indian domestic players in the market who are recognizing the importance of budget accommodations, the industry is growing at a fast pace. The constant booming industry which is estimated to be of $ 20 billion is gradually gaining ground.

Launched in August 2013, Zostel Hospitality Private Limited (ZHPL) is also one amongst the leading players who have entered the market with the aim of changing the way India travels. ZHPL launched two brands: Zo Rooms and Zostel. ZO Rooms, a chain of premium budget hotels has grown at a neck breaking pace to 500 properties across 35 cities in India.

Zostel which is started by an extremely close knit group of friends, boasts of being the only first ever startup in recent times with seven active co-founders that has been able to raise $30M. The team comprises of Abhishek Bhutra, Akhil Malik, Chetan Singh Chauhan, Dharamveer Singh Chauhan, Paavan Nanda, SiddharthJanghu and Tarun Tiwari.

Speaking to Adgully.com regarding the inspiration to step into the market, Dharamveer Chouhan, CEO and Co-founder,ZO Rooms, said, “We were a close knit group of friends with a common goal of creating something exceptional. We tossed around a million ideas and did thorough market research when we realized the extremely high potential of the Indian hospitality industry. The industry had not seen any path breaking revolution in a long time. With our focused offering at both ZO Rooms and Zostel, we have embarked on our journey to disrupt the budget hospitality space by ensuring 100% customer delight.”

Chouhan believes that there is a wide gap between the demand and availability of budget accommodations in the country. He says, “ZO Rooms will address this gap by providing business travelers with high quality budget accommodations which are safe, affordable, and facilities rich. We are the fastest growing premium budget accommodation network. We aim to revolutionize the space and completely change the way India books rooms.”

Talking about their marketing campaign, he says, “Based on our experience and study of the industry and consumers of budget hotels, we discovered that the main distress point in this space is the experience. There is considerable effort in terms of time, energy and money that is spent on figuring out a place to stay which provides a bang for the buck. This was the seed of the thought 'More Room for You'. Through the customer-first lens of ZO Rooms, the consumers spend less time in searching, haggling and complaining and more time in experiencing different parts of a city, their cuisines or even better, peace of mind.”

They used a mix of Radio, Out of Home, Live Media, Digital and other traditional media to reach out to the consumers.  The basic objective for the campaign was to educate the consumers about their space and as to how they are different from the other players in the industry. They aim at providing the best experiences to the consumer at any and every point in time and to make travel in the budget space pleasurable, convenient and memorable.

Adding further, he says, “We believe we have done a fair job in that aspect (3X jump in traffic). There is a lot more work to do in this avenue but we believe that with the product, services and experience our team has in the hospitality industry, we'll be able to change the way India travels.”
The team has recently closed a round of funding of Rs 192 crore ($30 million) from their existing investors Tiger Global Management and Orios Venture Partners. Speaking about their key USP’s, Chouhan states, “Our USP is definitely the experience we offer our customers at our properties. Our extremely rigorous 150 point quality assurance checklist signifies our dedication towards delivering rich experiences. Our strategic partnerships with Uber and Foodpanda help us deliver the most convenient and easy stay for our travelers.”

They have brought the concept of backpacker’s hostel to India by launching Zostel which provides facilities and security to travelers from across the world for their stay in India. Speaking about the same, he says, “During the extensive market research and business expansion for Zostel, we realized the huge untapped potential that lies in the budget hospitality space. This market needed path breaking innovation to bring the Indian market at par with international players. Hence, we launched ZO Rooms to change the way India travels and books rooms. Zostel gave us a good operational and functional understanding of the hospitality space. This made the journey of ZO Rooms much smoother and well planned out. We are proud to say that we are the fastest growing budget hospitality chain in India today.”