When India’s first backpacker hostel opened in Jodhpur in 2013 under the Zostel banner, it seeped a cultural shift in how young Indians thought about travel. Budget accommodation was no longer just about affordability; it became about community, shared spaces, and the possibility of conversations with strangers turning into companions.
Twelve years later, Zostel stands as the country’s largest branded hostel network, with more than 75 hostels and 20 homes across India and Nepal, and a near-term target of crossing 100 properties. That milestone comes as the brand marks its twelfth anniversary, a symbolic moment that underscores both how far it has come and how urgently it is preparing for its next chapter.
The timing is significant because India’s travel economy itself is at an inflection point. Solo trips, women-led journeys, and flexible workcations are no longer niche trends; they are mainstream behaviours fuelling demand for social-first stays and curated local experiences.
India’s youth travel culture is still in its early innings. Despite the explosion of conversations around community stays, hostels form a tiny fraction of the country’s overall accommodation landscape. The paradox is striking that their cultural impact is outsized, yet their market penetration remains small. That gap is precisely what makes Zostel’s next phase so critical, as it aims to turn a subculture into a mainstream movement for millions of Indian travellers.
Zostel is now looking beyond hostels to create a broader travel ecosystem. CEO Aviral Gupta frames the growth with clear targets, “We are looking at an overall annualised Rs 1,500 crore in Gross Booking Value by the end of 18 months. That is the net run rate we are expecting, and honestly, we can go beyond that with the different expansion projects already underway.”
If these numbers are achieved, Zostel would shift from being a hostel-first brand to one of India’s most diversified travel ecosystems, spanning stays, trips, villas, co-living, and even digital discovery.
Community-first expansion
For all the diversification, hostels remain the foundation of Zostel’s identity. The company has grown through an asset-light franchise model, working with local entrepreneurs who share its ethos. Unlike large hotel chains, the focus is not on standardisation but on preserving local character and building community culture. “The reason people come to Zostel is not just the bed,” said Gupta. “It’s the community, the vibe, the connections they make. As we grow, that identity has to remain intact.”
He credits the expansion to careful partnerships, “Every single friend and partner that we have is very carefully selected, who really wants to develop their regions and wants to be a local friend in that region. That sort of organic, simple strategy is something that has enabled Zostel to expand across all of these destinations.”
The cultural impact has been significant, particularly in opening up safer solo travel. “Today 35 to 40% of our travellers are solo female travellers,” Gupta said. “It’s a cultural shift in terms of how you travel, how you experience places, how you interact with people.”
The company also nurtures destinations that were previously off the radar, “That is on Kodaikanal. It’s like 90% of the bookings for Pumbarai come from the hostel channel itself. It was not a very known destination, but then Bala, one of the partners, came up to us and said this is something he’s very confident about and wants to showcase to the world. That trust of the partners, combined with our global knowledge, is how the local stories and the entire ecosystem start to flourish.”
If hostels built the base, trips are emerging as the scale-up play. Indian travellers are seeking structured adventures, particularly in offbeat destinations where safety, logistics, and local knowledge matter. ZoTrips has become a channel to capture that demand, especially from younger travellers whose parents in tier-2 cities feel more comfortable with organised groups.
“We are expanding to Kazakhstan, Georgia, Vietnam, Ireland, Bali, and Japan. We recently launched a trip to Japan,” Gupta said. “This is a segment that we foresee, by the end of 18 to 24 months, would be greater in terms of overall GBV than the current hostel business.”
The brand is also launching a new category in vacation rentals, “We are about to launch ZoVillas in 1.5 to 2 months. The community and infrastructure help create micro-cultures, and around these we are building micro-economies in the digital era, supporting the passion economy and enabling people to build their dreams.”
As Zostel’s core community ages, the brand is adapting. Travellers who first bunked in hostels in their twenties are now entering their thirties, often with partners or young families, seeking private yet social getaways.
“The demographic shift has seen our loyal guests attain the age of 29 to 34 to 35 and have families,” Gupta explained. “There is huge demand for private premium spaces for these people to go to different destinations with their families. We are targeting 300 ZoVillas in the next 18 months at 70 to 80% occupancy.”
ZoHouse experiments with long-term co-living blended with hospitality. Remote work and creator-driven lifestyles have created a new demand for flexible living spaces.
“We plan to expand ZoHouse to 52 global cities in the next five to eight years,” Gupta said. “Three of the cities are already doing wonderfully well, and we have great founders. We call them all the members as founders of ZoWorld directly because they have the initiative and drive to change the world, to build their dreams from blockchain to AI, technology, music, culture, arts, you name it.”
Digital discovery, AI & gamified journeys
Beyond physical stays, Zostel is building experiences that extend before and after a trip. Gamified quests and AI-driven itineraries are in development to keep travellers engaged and loyal.
“We are building quests and gamified journeys,” Gupta said. “Some of the quests can be purely exploratory, some achievement-riveting, and some would help Zo expand its global footprint with the help of the global communities that we have formed in the past 12 years.”
AI also powers operations and customer experience, “With close to 4,000 to 5,000 daily chats, we have our own AI engine categorising, answering, and supporting travellers,” he explained. “It’s a key driving lever for trips and expansion, enabling peer-to-peer exchange of value across our digital ecosystem.”
Financially, Zostel spans stays, trips, activities, and services, but the company has resisted aggressive monetisation. “We don’t charge anything beyond the bookings commission as of now,” Gupta said. “Trips business is part of Zostel, but we try to enable partners to have a larger chunk of this revenue so they can scale their business.”
Marketing too remains largely organic.
“We’ve almost never spent on marketing. Up till now, 95% of everything we do is organic or barter-based,” he said. “It’s about breaking out the stories of destinations, not selling products.” Social media, especially Instagram, and WhatsApp form the backbone of Zostel’s distribution, tailored to each audience segment.
“At the core, we believe everyone is a backpacker. For hostels, it’s youngsters 18 to 30 years old; for families, it’s our homes and ZoVillas,” he said. “AI helps us connect with these different segments in local languages and local culture.”
For Zostel, the challenge now is scale without dilution. It has to grow fast enough to stay ahead of competition, while keeping its cultural identity intact. Gupta frames the goal as combining numbers with authenticity, “Our goal is for ZoTrips to become your trip partner for life from the moment you think about leaving home, to the activities you do, where you stay, what you eat, and how you come back.”
